If Congress wants jobs, it can’t want SOPA

Although the Stop Online Piracy Act and Protect IP Act have been shelved, their staunchest congressional supporters are still criticizing the opposition, claiming the bills would save thousands of jobs. However, these claims look like little more than empty rhetoric.
The entertainment industry — profit-hungry and change-averse — is already its own worst enemy. Meanwhile, the Internet economy that bills such as SOPA and PIPA threaten to derail is a potential job creator the likes of which Hollywood could never be.

The movie industry is dooming itself

It’s true that movie studios, often cited as the driving force behind the two controversial bills, are losing money to online pirates, but that doesn’t tell the whole story. As my colleague Ryan Lawler explained in a Thursday post, the movie industry’s determination to maintain its existing distribution methods are driving consumers to seek out pirated content. We live in an increasingly Internet-centric (read “on-demand”) world, but not an anarchical one. Many consumers would gladly pay for the movies they want to see, but forcing them to watch those movies either in the theater or on DVD forces their hands.
When consumers choose to watch pirated content or to not watch at all, studios lose money; when they lose money, they cut production and cut jobs. But this downward revenue trend seems entirely reversible if movie studios get creative and figure out a way to leverage consumers’ appetites for video on-demand. Just look at the shift in Internet traffic volume from BitTorrent to Netflix (s nflx) once the latter started streaming movies. If Hollywood really wants to save jobs, it needs to step into the 21st century.

In TV, reality is king but benefits aren’t

It’s difficult to take any complaints about job losses in the television industry too seriously, either. Sure, networks have been better about embracing the Internet than have movie studios, but many also cling to archaic notions such as primetime programming and ever-more-expensive delivery models such as cable and satellite providers.
And when television networks spotted an opportunity to cut costs with reality television, they pounced on it. According to Media Life, reality television went from practically zero percent of the big five networks’ primetime programming in 1996 to 20 percent entering the fall 2011 season (although it peaked in 2006-07).
The result of the reality overload wasn’t necessarily a lack of jobs, but a lower class of jobs. Interchangeable reality television participants make far less than do cast members on scripted programs, and despite its decade of saturating the airwaves, reality television writers are still fighting to unionize like their Writers Guild of America brethren. As is, many are without standard benefits such as overtime pay and health care.
Given all that, it’s not hard to make the argument that it’s profits, not jobs, driving Hollywood and a handful of congresspeople to support bills such as SOPA and PIPA.

The Internet: Big, growing and hiring

On the contrary, the Internet is spawning scores of startups to go along with behemoths such as Google (s goog) and Yahoo (s yhoo). And, by and large, they’re hiring. What’s more, the Internet economy is growing like mad and spurs economic activity from servers to data centers to iPads (s aapl).
According to research from McKinsey & Company, “The Internet accounted for 21 percent of the GDP growth in mature economies over the past 5 years. … If Internet were a sector, it would have a greater weight in GDP than agriculture or utilities.” The report’s authors cite a McKinsey survey finding the Internet creates 2.6 jobs for every job it destroys, as well as “a detailed analysis of the French economy” finding the Internet added 2.4 jobs for every job it made obsolete.

Legislation such as SOPA and PIPA not only threatens content-based companies such as Google, (s goog) Reddit, Dropbox or Wikipedia, but, theoretically, anyone who deals with copyrighted content in any form. The recent cases such of Veoh (which was innocent) and MegaUpload (which looks guilty) illustrate what’s capable in terms of shuttering companies under existing law. Do we really want to give rights-holders even more power to chill innovation across the web under the threat of even swifter, but still potentially ungrounded, retaliation?
Not even all copyright holders are on board with SOPA and PIPA. During a panel discussion at CES, Casey Rae-Hunter of the Future of Music Coalition made a great point about how many musicians and independent artists rely on file-sharing sites to access files when they need them or to share works with possible collaborators or partners. That’s why, he said Fractured Atlas, the Writers Guild of America West, and other organizations representing the opera and theatre industries also opposed the bills.
Protecting intellectual property and saving jobs are laudable goals, and if Congress is serious about achieving them, SOPA and PIPA will look far different when they eventually re-emerge. That’s because padding the entertainment industry’s bottom line at the expense of the growing Internet industry is not the way to achieve either.
Image courtesy of Flickr user Charleston’s TheDigitel.