|25-05-23, 05:48 PM||#1|
Join Date: May 2001
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Peer-To-Peer News - The Week In Review - May 27th, ’23
May 27th, 2023
‘Movie Theaters Are the Marketplace of Free Ideas’
John Fithian spent nearly three decades as the top lobbyist for movie theaters. He says their future is bright, despite the power of streaming.
John Fithian saw a lot during his nearly three decades as the president and chief executive of the National Association of Theater Owners, the top lobbyist for movie theaters, a tenure that ended on May 1.
He grappled with the transition from film projection to digital cinema and engaged in multiple battles over the studios’ desire to shorten the amount of time newly released movies can exclusively be shown in theaters amid the rise of streaming services. Yet it wasn’t until spring 2020, at the start of the pandemic, when Mr. Fithian actually wondered whether his business was going to survive.
Mr. Fithian said he was receiving calls “multiple times a day, from people saying, my third-, fourth-generation family business will be gone in a couple of months if you don’t get something for us,” he said with a nervous laugh. “That was when the crisis was very, very real to us.”
He helped secure more than $2 billion in tax relief for the industry, allowing most of the country’s theater chains to stay afloat. In the end, only 2,000 screens were closed down.
Mr. Fithian, 61, was raised in Washington, D.C., the son of former Representative Floyd Fithian of Indiana. He began his career as an outside counsel for clients that included the Major League Baseball players’ union and the theater owners’ association.
“Hearing theater owners talk about why they went into business or why their grandparents went into the business was completely inspiring,” he said. “It sounds silly, but movie theaters are the marketplace of free ideas.”
This interview, which was condensed and edited for clarity, was conducted during CinemaCon, an annual industry trade event, in Las Vegas.
When was the moment when you felt like the movie theater business was going to be OK?
About a month ago. (Laughs.) In 2022, we knew that people were coming back on a per-film basis at prepandemic rates so that kind of gave us the inkling that everything would be fine if the movies kept coming back. But, to be completely confident that this business will now grow to higher levels, that was only within the last few months, with pronouncements from the leaders of the major studios about their release slates going forward, by Amazon and Apple jumping into the theatrical business.
Do you now see some silver linings to the pandemic?
The so-called streaming wars that had started before the pandemic had the companies who owned streaming services, and Wall Street and its financial backers, believe that the only thing that mattered as a competitive business model was the number of subscribers to streaming services. We had heard from several studio leaders prepandemic that they really wanted to experiment with the elimination of a theatrical window.
Eliminate it completely?
“Some executives thought that. Others thought it should be dramatically shorter. There was a lot of pressure coming into the pandemic and during the pandemic. And release models totally changed. A lot of movies went only to streaming services. A lot of movies went simultaneously to theaters and streaming services. At the time, these were thought of as crisis moments for the creative community and for theater owners.
But what happened is that a whole bunch of data came out of the pandemic about these theories of the theatrical window. One, it was quite clear when you compare the movies during the pandemic, the ones that had an exclusive theatrical window did much better theatrically, but then also did better when it got to the home. Two, we learned that piracy is exacerbated by shrinking the theatrical window. If movies are only in cinemas, the only way you can pirate a movie is with a recording device. And the quality level is not great. When a movie gets released to the home, a pristine digital, easily replicable, easy-to-distribute-around-the-world copy becomes available. So you’re literally cannibalizing movie theater sales from the very first day.
Netflix is the last holdout when it comes to the theatrical space. Now that you have Amazon and Apple demonstrating a much greater interest in theatrical, does Netflix’s position matter as much?
I’m just stoked that one of my goals before retirement was to get two out of three of the streamers to go theatrical. We got two out of three. I just didn’t think those would be the two.
Do you believe you’ve permanently lost moviegoers because of changing habits developed during the pandemic?
We don’t think so. We were very nervous about that right when we started coming out of the pandemic, and there was data early in the reopening that suggested that two demographics, seniors and families with small children, weren’t prepared to come back to cinemas. Then it became a bit of a self-fulfilling prophecy, because studios wouldn’t theatrically distribute movies that appealed primarily to seniors, or to families with young children. Now the data is clear that movies released targeting those demographics are performing similar or better than they did in 2019, just like the movies targeted to other demographics. It was not a big surprise to us that the “Super Mario Bros. Movie” was going to do an extraordinary amount of business.
People love to criticize the moviegoing experience: It’s too loud, and people talk, use their phones, and you have to sit through 30 minutes of ads before the movie starts. Is there an awareness that there are issues with going to the movie theater?
We surveyed lots of theater owners about their plans coming out of the pandemic about adding premium large format screens, about replacing their sound systems, about adding alcohol service, about continuing to replace their seats. And the numbers are really strong. Now that the business is coming back, the theater owners have already started to continue to innovate and improve the experience so that it’s always better than the home.
In both Los Angeles and New York, quite a few prime theaters that catered to independent film have shut down. Do you think independent film is struggling for a home nowadays?
There’s a fascinating thing to me that I’ve noticed throughout my 30 years of representing theater owners, and that is what happens in Los Angeles or New York suggest to the creative community, the moviemakers, the reporters who cover our business, and the financial community, that is the movie experience. There’s a lot more out there. One company, Pacific Theaters, which ran the ArcLight, is the only company in the country who filed Chapter Seven bankruptcy. They went out of business entirely. There were a couple Chapter 11 reorganizations, but the only one that said, “Eh, I’m done” was Pacific. It does not mean that the art houses across the country closed down.
What is a misconception people have about the movie theater business that you’ve tried to correct but didn’t succeed?
Ticket prices. Even through all the innovations and improvements in the technology, and the sound systems and the premium screens — all the ways that we’ve improved the cinema experience over the last decade or two, it’s still the case that the average price of a ticket today on a cost-of-living basis is less than it was in the 1970s. And yet people always say movie tickets are too expensive.
What are the biggest challenges facing the theatrical exhibition business going forward?
I think the existential challenges — the pandemic, the streaming wars — are gone. I’m really the most optimistic I’ve been in 30 years about the future of the business. The biggest immediate challenge is it’s going to take a while to fix the balance sheets.
Long term, it’s still about two things: the creation and distribution of really good movies that appeal to all demographics in all different genres, with diverse casts and diverse themes, and really good operational experiences at theaters that also offer diversity and different value-based judgments. If the studio partners keep making really good movies that appeal to diverse audiences, and we keep innovating and upgrading cinema experiences, I’m very bullish on the long-term health of the industry.
Were you a movie lover before you took this job?
I like movies. But I was principally a First Amendment lover, and a First Amendment lawyer in Washington. Our members will play everything: the most radical, left-wing anarchist film, the most conservative religious film, and we get protests on both sides. To me it was always like, “Bring it on.” Movie theaters are the town halls of modern society. It’s where people go to experience something collectively, and then debate the issues of the day.
What is the thing you are going to miss the least?
I don’t know who I’m going to miss the least, the really aggressive know-it-alls in Hollywood or the really aggressive know-it-alls in Washington, D.C. A lot of these people are my really good friends, and I’ll have some lasting relationships with both creatives and studio executives, but, you know, sometimes just because you run a big studio or you’re a United States senator doesn’t mean you know everything. I will not miss that.
Leaked Government Document Shows Spain Wants to Ban End-to-End Encryption
In response to an EU proposal to scan private messages for illegal material, the country's officials said it is “imperative that we have access to the data.”
Lilly May Newman, Morgan Meaker, Matt Burgess
Spain has advocated banning encryption for hundreds of millions of people within the European Union, according to a leaked document obtained by WIRED that reveals strong support among EU member states for proposals to scan private messages for illegal content.
The document, a European Council survey of member countries’ views on encryption regulation, offered officials’ behind-the-scenes opinions on how to craft a highly controversial law to stop the spread of child sexual abuse material (CSAM) in Europe. The proposed law would require tech companies to scan their platforms, including users’ private messages, to find illegal material. However, the proposal from Ylva Johansson, the EU commissioner in charge of home affairs, has drawn ire from cryptographers, technologists, and privacy advocates for its potential impact on end-to-end encryption.
For years, EU states have debated whether end-to-end encrypted communication platforms, such as WhatsApp and Signal, should be protected as a way for Europeans to exercise a fundamental right to privacy—or weakened to keep criminals from being able to communicate outside the reach of law enforcement. Experts who reviewed the document at WIRED’s request say it provides important insight into which EU countries plan to support a proposal that threatens to reshape encryption and the future of online privacy.
Of the 20 EU countries represented in the document leaked to WIRED, the majority said they are in favor of some form of scanning of encrypted messages, with Spain’s position emerging as the most extreme. “Ideally, in our view, it would be desirable to legislatively prevent EU-based service providers from implementing end-to-end encryption,” Spanish representatives said in the document.
The source of the document declined to comment and requested anonymity because they were not authorized to share it.
“It is shocking to me to see Spain state outright that there should be legislation prohibiting EU-based service providers from implementing end-to-end encryption,” says Riana Pfefferkorn, a research scholar at Stanford University’s Internet Observatory in California who reviewed the document at WIRED’s request. “This document has many of the hallmarks of the eternal debate over encryption.”
End-to-end encryption is designed so only the sender and receiver of communications like messages can see their contents. This boxes out all other parties, from scammers to police and even the company providing the digital platform. Law enforcement advocates often propose creating technical mechanisms through which end-to-end encryption can be bypassed for investigations, but cryptographers and other technologists have long argued that this would introduce weaknesses that inherently undermine end-to-end encryption, putting users’ privacy at risk. Furthermore, they have repeatedly concluded that this expanded exposure would ultimately hurt the digital safety and security of vulnerable groups, including children, rather than defend them.
"Breaking end-to-end encryption for everyone would not only be disproportionate, it would be ineffective of achieving the goal to protect children,” says Iverna McGowan, the secretary general of the European branch of the Centre for Democracy and Technology, a digital rights nonprofit organization, who reviewed the document at WIRED’s request.
The leaked document contains the position of members of the police Law Enforcement Working Party, a group of the Council of the European Union that deals with law enforcement views on legislation. Dated April 12, 2023, the document contains 20 countries’ views on a series of questions, including whether they see end-to-end encryption as a hindrance to their work dealing with child sexual abuse and whether they would favor adding wording to the law to stipulate that encryption shouldn’t be weakened. The questions were first posed in January.
WIRED asked all 20 member states whose views are included in the document for comment. None denied its veracity, and Estonia confirmed that its position was compiled by experts working within related fields and at various ministries.
The document reveals strong support for Johansson’s proposal to scan private end-to-end encrypted communications for illegal content. Of the 20 countries included in the document, 15 expressed support for the idea of scanning end-to-end encrypted communications for CSAM. Many framed this type of scanning as a vital tool that would enable authorities to win the fight against child abuse.
“It is of utmost importance to provide clear wording in the CSA Regulation that end-to-end encryption is not a reason not to report CSA material,” Croatia’s representatives said in the document. “Detection orders must necessarily also apply to encrypted networks,” Slovenia said. “We don’t want E2EE encryption to become a ‘safe haven’ for malicious actors,” Romania added.
Denmark and Ireland expressed support for scanning encrypted messengers for child sexual abuse material while also endorsing the inclusion of wording in the law that protects end-to-end encryption from being weakened. The ability to do this would rely on the invention of technology that can scan encrypted messages for illegal content without altering or breaking the security features offered by encryption—a feat cryptographers and cybersecurity experts have said is technically impossible.
The Netherlands, however, stated that this would be possible through “on-device” scanning before the illegal material is encrypted and sent to its recipient. “There are … technologies which may allow for automatic detection of CSAM while at the same time leaving end-to-end encryption intact,” the country’s representatives stated in the document.
“They want to keep the security of encryption whilst being able to circumvent it,” says Ella Jakubowska, a senior policy advisor at European Digital Rights (EDRI). Jakubowska says she is “unsurprised but nevertheless shocked” to see that European countries have a “really shallow understanding” of encryption. “They want privacy but they also want to indiscriminately scan encrypted communications,” Jakubowska says.
In its response, Spain said it is “imperative that we have access to the data” and suggests that it should be possible for encrypted communications to be decrypted. Spain’s interior minister, Fernando Grande-Marlaska, has been outspoken about what he considers the threat posted by encryption. When reached for comment about the leaked document, Daniel Campos de Diego, a spokesperson for Spain’s Ministry of Interior, says the country’s position on this matter is widely known and has been publicly disseminated on several occasions. Edging close to Spain, Poland advocated in the leaked document for mechanisms through which encryption could be lifted by court order and for parents to have the power to decrypt children’s communications.
Jakubowska, who reviewed the document, says that several countries appear to say they would give police access to people’s encrypted messages and communications. Comments from Cyprus, for example, say it is “necessary” that law enforcement authorities have the ability to access encrypted communications to investigate online sexual abuse crimes and that the “impact of this regulation is significant because it will set a precedent for other sectors in the future.” Similarly, officials in Hungary say “new methods of data interception and access are needed” to help law enforcement.
“Cyprus, Hungary, and Spain very clearly see this law as their opportunity to get inside encryption to undermine encrypted communications, and that to me is huge,” Jakubowska says. “They are seeing this law is going far beyond what DG home is claiming that it’s there for.”
Officials in Belgium said in the document that they believe in the motto “security through encryption and despite encryption.” When approached by WIRED, a spokesperson from Belgium’s Ministry of Foreign Affairs initially shared a statement from the country’s federal police saying its position has evolved since it submitted comments for the document and that Belgium is adopting a position, alongside other “like-minded states,” that it wants encryption weakened. However, half an hour later, the spokesperson attempted to retract the statement, saying the country declined to comment.
Security experts have long said that any potential backdoors into encrypted communications or ways to decrypt services would undermine the overall security of the encryption. If law enforcement officials have a way to decipher messages, criminal hackers or those working on behalf of governments could exploit the same capabilities.
Despite the potential attack on encryption from some countries, many nations also appeared to strongly support end-to-end encryption and the protections it provides. Italy described the proposal for a new system as disproportionate. “It would represent a generalized control on all the encrypted correspondence sent through the web,” the country’s representatives said. Estonia cautioned that if the EU mandates the scanning of end-to-end encrypted messages, companies are likely to either redesign their systems so they can decrypt data or shut down in the EU. Triin Oppi, a spokesperson for Estonia’s Ministry of Foreign Affairs, says the country’s position had not changed.
Finland urged the EU Commission to provide more information about the technologies that can fight child sexual abuse without jeopardizing online security and warned that the proposal could conflict with the Finnish constitution.
Representatives from Germany—a country that has staunchly opposed the proposal—said the draft law needs to explicitly state that no technologies will be used that disrupt, circumvent, or modify encryption. “This means that the draft text must be revised before Germany can accept it,” the country said. Member states need to agree on the text for the draft bill before the negotiations can move forward.
“The responses from countries such as Finland, Estonia, and Germany demonstrate a more comprehensive understanding of the stakes in the CSA regulation discussions,” Stanford’s Pfefferkorn says. “The regulation will not only affect criminal investigations for a specific set of offenses; it affects governments’ own data security, national security, and the privacy and data protection rights of their citizens, as well as innovation and economic development.”
Google Bans Downloader App after TV Firms Complain it can Load a Pirate Website
"It's a ridiculous claim and abuse of the DMCA," Downloader app developer says.
The Google Play Store suspended an app that combines a web browser with a file manager after a Digital Millennium Copyright Act (DMCA) complaint pointed out that the app is capable of loading a piracy website—even though that same pirate website can be loaded on any standard browser, including Google Chrome.
The free app, which is designed for Android TV devices and is called Downloader, had been installed from Google Play over 5 million times before its suspension on Friday, an Internet Archive capture shows. The suspension notice that Google sent to Downloader app developer Elias Saba cites a complaint from several Israeli TV companies that said the app "allows users to view the infamous copyright infringing website known as SDAROT."
Saba provided us with a copy of the suspension notice.
"You can see in the DMCA description portion that the only reason given is the app being able to load a website," Saba told Ars. "My app is a utility app that combines a basic file manager and a basic web browser. There is no way to view content in the app other than to use the web browser to navigate to a website. The app also doesn't present or direct users to any website, other than my blog at www.aftvnews.com, which loads as the default homepage in the web browser."
Saba also detailed his frustrations with the takedown in a blog post and a series of tweets. "Any rational person would agree that you can't possibly blame a web browser for the pirated content that exists on the Internet, but that is exactly what has happened to my app," he wrote on his blog.
Downloader is still available on the Amazon app store for devices such as Fire TVs, or from the Downloader app's website as an APK file.
It’s a “standard web browser,” developer says
Before being pulled from Google Play, the app's description said that Downloader "allows Android TV owners to easily download files from the Internet onto their device. You can enter a URL which directly points to a file, or you can sideload the web browser plugin to download files from websites."
"If loading a website with infringing content in a standard web browser is enough to violate DMCA, then every browser in the Google Play Store including @googlechrome should also be removed. It's a ridiculous claim and an abuse of the DMCA," Saba wrote on Twitter.
According to the app suspension notice, the DMCA complaint was submitted to Google by a law firm representing HOT Telecommunications Systems, DBS Satellite Services, United King Video, and Charlton. The complaint says an "Isareli [sic] court" and a US federal court issued permanent injunctions against the site, though the Sdarot website is still online at the URL cited in the DMCA complaint.
In April 2022, a US District Court judge in New York ordered all Internet service providers in the United States to block Sdarot and two other pirate services. The blocking order issued to ISPs was later stayed, but a permanent injunction was issued against the website operator.
App maker’s appeal rejected
Google's notice to Saba said that his "app contains content that doesn't comply with the Unauthorized Use of Copyrighted Content policy... Your app has been suspended and removed due to alleged copyright infringement (according to the terms of the Digital Millennium Copyright Act)."
Saba said he filed appeals on Friday through the Google Play Console and Google's DMCA counter notification form. Saba's Google Play Console appeal was rejected within about an hour, but he's still waiting for a response to the appeal filed via Google's DMCA counter notification form, he told Ars today.
"We've reviewed your appeal request but we're still unable to reinstate your app," the Google Play appeal rejection notice said on Friday.
We contacted Google about the app suspension today and will update this article if we get a response. The suspension of Downloader was previously reported by TorrentFreak.
Saba is hoping public attention will cause Google to change course. "I appealed the app suspension with Google and was rejected within minutes. Please retweet this and reach out to Google anyway you can because I don't know what else to do at this point," he wrote.
Netflix's Password Sharing Crackdown Officially Hits US Users
Netflix's (NFLX) controversial password sharing crackdown just hit the US.
On Tuesday, the company released a blog post with the news. In addition to the US, Netflix confirmed it will also be rolling out the crackdown across all regions around the world such as the UK, France, Germany, Mexico, Brazil, Singapore, Australia, among others.
[Your investor instinct's favorite app]
"Netflix account is for use by one household," the company wrote in the post. "Everyone living in that household can use Netflix wherever they are — at home, on the go, on holiday — and take advantage of new features like Transfer Profile and Manage Access and Devices."
Netflix broadened its crackdown in early February to include countries like Canada, New Zealand, Portugal, and Spain, in addition to the test countries of Chile, Costa Rica, and Peru. It previously said "a broad rollout" of the policy would hit this quarter.
Netflix said it has listened to member feedback to develop the following features that give people who share Netflix beyond their household more choice and control:
• Manage Devices: Visit Manage Account Access page to review which devices are signed in to your account and sign out those you don’t want to have access.
• Transfer a profile. Anyone on your account can transfer a profile to a new membership that they pay for.
• Buy an extra member. You can share your Netflix account with someone who doesn’t live with you for $7.99/month more.
Netflix stock rose on the heels of the announcement before sinking 2%. Investors have questioned to what degree a password sharing crackdown may turn off users.
Despite many users expressing their concerns, Wall Street analysts have remained upbeat about the initiative, emphasizing its role as a longer-term growth driver, along with the platform's recently launched ad-supported tier.
"We expect a lot of noise in 2Q23, and are being very conservative in our own modeling of churn in response to password crackdown," Jefferies wrote in a note to clients late last month.
"However, we believe most of that churn will be somewhat impulsive, as it has minimal impact on the existing subscriber, and those members will return to the service over the course of 2023."
Jefferies recommends "buying any dip associated with a conservative 2Q23 guide," adding Netflix is poised to be the number one distributor in video content amid those longer-term revenue drivers while discipline around content spend will "jumpstart" margin and free cash flow expansion efforts.
Tape Storage Trundles On, Increases Yearly Volume to 128 Exabytes
"Tape storage is dead" is one of those prophecies that has never seemed to actualize itself: demand for slow yet cost-effective and reliable storage solutions hasn't gone the way of the dodo. On the contrary; the LTO (Linear Tape-Open) Program group (a collective of tape specialist companies made up of HPE, IBM and Quantum Corporation) just announced a 5% YoY increase in shipments compared to the same period last year.
That may not seem like much, but the bigger context is that that 0.5% growth rests atop a staggering 40% volume increase seen last year. In a market that's seen contractions, layoffs, and lowering sales volumes, that has to count as a win (a number of well-known hardware companies would have loved to show these results in their latest earnings report, after all).
The LTO shipments report also demonstrate the speedy adoption of the latest technology, LTO-9, compared to other technological leaps. LTO-8 continues to be a great seller for value-conscious buyers — its 30 TB of compressed capacity and up to 750 MB/s data transfer rates are nothing to scoff at. But LTO-8 has been superseded by the 9th iteration, which has increased compressed data density (up to 45 TB) and transfer rates of up to 900 MB/s.
And while total number of tapes shipped has been declining, it's important to remember that a tape of today can offer the same storage capacity as many tapes of yesterday. If you wanted 45TB of compressed storage on an LTO-5 product stack, you'd be looking at buying 30 1.5 TB LTO-5 tapes — volume lies in capacity, not on number of units.
No, tape isn't dead, and contrary to what you may have read, HDDs aren't going to be extinct by 2028, either. But while HDD shipments cratered by around 35% this year, tape still found room to grow. Technologies last much longer than we give them credit for, and the AI boom for unstructured data means increased demand for cheap, reliable, and capacious storage. The LTO Program's growth being mostly fuelled by hyperscalers and enterprises is a testament to that.
Until next week,
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