04 February 2007

Intellectual Property Values

Marjorie Kelly's book, The Divine Right of Capital, proposes an interesting premise. The prevailing capitalist market system is essentially an anti-republican oligarchy, although it is highly touted in a (nominally) democratic republic. Those who "own" and have first rights to the wealth of companies are typically not those who actually generate the wealth. The classic argument is that the shareholders are the ones who take the (financial) risk; yet there are almost no shareholders of public companies who actually invested the risk capital; most invest in the stock market almost as one "invests" in a blackjack game, risking their capital for purely personal financial gain, but not providing one iota of value to the creation of wealth in the company. Kelly calls for a democratization of wealth, in which all substantive contributors to wealth - including the investors - share in the wealth they create. In other words, take a more republican and democratic approach.

I was reminded of Kelly's book when I read an article in the Star this weekend about the problems Brian Froud is having with Fox Broadcasting over his popular Fringe Festival show, Swiss Family Guy Robinson. "Froud's amazing virtuoso turn as he wove the characters from the cult Fox animated series around the structure of the 1812 novel by Johann Rudolf Wyss had the crowd on their feet and cheering."

Fox, which broadcasts Family Guy and owns the rights to Seth McFarlane's creation, isn't exactly on their feet cheering. In fact, their response to Froud was a tad more terse: ""When we learned that this production had made unauthorized use of the Family Guy characters and material, we asked that the producers cease and desist and they have complied. Protecting our intellectual property and copyrights is something we take very seriously at Twentieth Century Fox Television."" Of course, they didn't give the same hard time to Rick Miller's portrayal of MacHomer - now in its 10th successful, not to mention hysterical, year. To be sure, the two actors took opposite approaches to approaching Fox about their respective endeavours. Miller provided Fox with an early video of his performance and sought permission early on, although it wasn't until Simpson's creator, Matt Groening, saw the performance that the blessing was bestowed. (We should also take note of the fact that Groening likely has a great deal more influence at Fox than does MacFarlane.) Froud, on the other hand, was fairly late at requesting permission - after quite a long successful run - and their first approach (of necessity, apparently) was to Fox lawyers, whose response was predictable: "The Family Guy is the property of Fox and you are using our property without permission." Case closed, it seems.

But there are all sorts of "properties" of this sort that have no value. Characters from failed pilots and shows cancelled after only a couple of episodes are pretty much valueless. From where does the value in such so-called intellectual property accrue? It comes from us - you and me - and the millions of other fans that make shows successful, and create the revenue streams from advertising, merchandising spin-offs, DVD sales, and feature-length movies. In the case of Family Guy, Fox tried to kill the show - twice! It was only resurrected through an intensive lobbying campaign by loyal fans (not to mention massive purchases of DVD boxed sets of the first few seasons) that has allowed it to survive to the current sixth season.

Who created the wealth of the Family Guy "property?" Although Fox had a hand in it, the value and wealth was created collaboratively and collectively by Family Guy fans, who, according to Marjorie Kelly's argument, have every right to participate in the fruits of that wealth. Were it not for the fans, there would be no revenue accruing to Fox, and no popular show about which to send cease and desist orders to someone who is, after all is said and done, promoting their brand. The person who coined the phrase, "smart as a fox," must have never met the broadcasting executives.

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