Fall 2012


A Democrat's Point of View

California Congressman Howard Berman talks about issues facing the entertainment industry.

1. You’ve been a longtime supporter of issues affecting the film and television industry. How is the industry important to the economy of the country?

It has a massive impact on the economy, both nationally and in terms of Southern California and my district. First of all, American film and television production has a hugely favorable balance of trade. At a time when many other areas are importing more than they’re exporting, American films and television shows still show a dramatic advantage for us in exports. But the economic impact can be quantified. One way to measure it is by the cost of piracy and digital theft. It is estimated that that the annual cost to our economy is $58 billion, and 370,000 jobs, some full-time, some part-time; $16 billion in wage earnings, and, at a time when we’re under tremendous fiscal constraints, probably $3 billion in tax revenue at the federal, state, and local level. The people employed in this industry are working at skilled, middle-class jobs, the kind that we are losing in too many other sectors. So the impact is a very strong one. And this is an environmentally clean industry.

2. What role do you think film and television play in American culture, and in communicating that to the rest of the world?

Well, I don’t think it is subject to much debate. It has a dominant influence on American culture. I’ve been the chairman, and I’m now the ranking Democrat on the House Foreign Affairs Committee, so I see it all over the world. In Iran, the regime tries to suppress it, but the people have a real hunger for American films and American music. The authoritarian regime in Iran tries to suppress those films and music because they think it perpetuates notions of freedom and liberty that they do not want to take hold among the people. But I see it in Asia, Europe and Latin America. These films show every emotion; they show our political life, our social life, the education system, aging in America, youth in America. And, most importantly, it’s not propaganda. It creates a picture of America with all of its warts and blemishes, but also its greatness. And it tells stories that inspire people. So it has enormous influence and is one of our best weapons in diplomacy.

3. The Stop Online Piracy Act (SOPA) was defeated after some elements of the Internet community rose up in an unprecedented way to oppose it.

There was an unbelievable level of erroneous beliefs about that legislation. It was stunning. I had a community meeting, and one guy said, ‘I won’t be able to get Netflix if SOPA passes.’ That’s crazy. Nothing could have been further from the truth. The irony is, in the SOPA debate, the opponents quite outrageously claimed it was an effort at censorship. This is an industry that has given everything to fighting censorship. And there was nothing in that bill that censored based on content. The only point of SOPA was you couldn’t steal the property. That’s not censorship, that’s enforcement of property rights.

4. What lessons can be drawn from the public’s reaction?

In this fight, we were out-organized. Our message wasn’t clear enough. We have to do a better job of making the case for the legislation. In the end, I think the creators of these wonderful new technologies and the creators of the content need each other. Consumers—domestic and foreign—want to see product in many different ways. A world that limits it to a theater or just sitting in front of your TV is a world that gives incentive to digital theft. So the owners of content have to adapt to the new technologies. And they are; it started slowly, but they are. Without that content, the innovators of the technology are going to ultimately fail. Without the content people want to see, they are not going to use the new technologies in a way that makes it profitable for the technology industry. So they really are partners, and we have to persuade them of the critical nature of protecting content, and we have to adapt to the new technologies. What will ultimately make this effort successful is when we understand that.

5. With the defeat of SOPA and the Protect IP Act (PIPA) in the Senate, do you think that legislation will remain a path to protecting intellectual property?

I do. I think there has to be a lot of inter-industry discussions before the next major legislative push. But we can’t tolerate the status quo. It’s the death knell of the industry if we do. You have to codify protection through federal law to provide remedies when those agreements are violated. So in the end, there’s going to have to be a legislative solution.

6. Given the overall political climate these days, how difficult is it to find bipartisan support for cyber security and intellectual property enforcement in Congress?

I think it’s just about how much time we are willing to spend to try and educate people. And to build a partnership between the technology industry and the entertainment industry so they can come together with a joint message to my colleagues in Congress. I think there are certain members of Congress who can help facilitate that outside conversation. I’ve already had conversations with congressmen who opposed SOPA, saying, ‘let’s try again, let’s see if we can work together, let’s see if we can get these outside forces talking to each other.’ And I think there are some private conversations already going on within the two industries.

7. You’re one of the three original authors of the Federal Runaway Production legislation in 2001. Why is that an issue that goes beyond the entertainment industry?

For two reasons. Firstly, while the industry is centered in Los Angeles—and I want it to remain centered there—the fact is films are shot and people are employed all over the country. So the economic impact is not just in one region of the nation. Secondly, we’re dealing with very unfair trade practices in some of these other countries. When the government of Canada tells a producer, ‘If you shoot your movie in Canada we will give you back 30 to 40 cents of every dollar you spend on below-the-line labor costs,’ that’s a classic unfair trade practice. There are many industries where this would not be tolerated; it shouldn’t be tolerated in this industry. Our trade agreements have to do two things: They have to get countries to enforce their intellectual property laws, and they have to challenge the subsidies. The federal expensing and tax credit legislation is at least some effort by the federal government and by Congress to compensate for those subsidies that other countries are offering. If we don’t respond with similar tax provisions that I’ve been involved with, it’s like disarming in a battle for jobs.

8. China is clearly an expanding and attractive market for American entertainment. What needs to be done there in regard to protecting our intellectual property?

We have to spend more time and resources on pushing the Chinese to enforce their own laws. They made a bargain at the time they were admitted to the World Trade Organization that they would enact intellectual property laws. But having laws on the books means nothing if they’re not enforced, or if they’re enforced only selectively. It’s in their long-term interests to enact and enforce them because creative people in China are going to want their patents and creations protected in other markets, as well as their own. As chairman of the House Foreign Affairs Committee, I went to China and it was always a major focus of my pitch that our relationships could never be as harmonious or as close as we want them to be, as long as the government of China doesn’t crack down on counterfeit goods. And in some cases they facilitate it. When a huge percentage of the Chinese government’s own computer software is stolen, it’s an indication that they’re not serious.

9. We noticed you have a Twitter account. How has the world of social networking changed the nature of being a politician?

Unbelievably. And I legislate in these areas better than I utilize them. But I’m being dragged into the 21st century for my own political survival. A campaign that ignores social media will be a failed campaign.

10. Do you have a favorite political film?

I start out thinking of the one that had me rolling over in laughter but may not be politically correct—Borat. I grew up with movies like Advise & Consent and [later I saw] The Candidate. Erin Brockovich was a story in a sense about arousing a community to achieve a political goal. The recent HBO film on the Sarah Palin candidacy for vice president was quite interesting and enjoyable. Dr. Strangelove had a comedic aspect to it, but in its own way it was really a fascinating message about deterrence and the failure of systems to avoid conflict. The one thing about political films—whether it’s about the Cold War or toxic waste in the local community—they all touch on a certain reality of the political process and a range of issues. Some of them have a message that’s maybe more to the right of center, and some of them have a message that’s more to the left of center, but I enjoy them. They show the political system at its best and its worst.

10 Questions

Question and answer sessions with prominent figures outside the Guild about current creative and business issues.

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