Michael Ovitz, Cultural Rebel?

Michael Ovitz, Cultural Rebel?

Michael Ovitz, Cultural Rebel?

Moneybox
Commentary about business and finance.
May 22 2000 4:15 PM

Michael Ovitz, Cultural Rebel?

In the brouhaha over how new technologies will undermine the entertainment industry--with Napster being the most obvious recent flashpoint--it's getting increasingly difficult to keep straight not just who's the establishment and who's a rebel, but who's greedy, who's a thief, and even who's accusing whom of being flat-out immoral. Consider the latest giants to wade in: consummate Hollywood dealmaker Michael Ovitz and Linus Torvalds, best known as the creator of Linux and a high priest of the so-called open-source software movement.

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The open-source crowd, which relentlessly peddles an image of itself as rabble-rousing, paradigm-toppling rebels, is generally all for Napster or other technologies that allow consumers access to lots of copyrighted stuff for free. The general theory seems to be that anything bad for big entertainment companies must somehow be good for everyone else. This stance has been undercut a bit by the fact that some recording artists--previously portrayed as enslaved victims of conglomerates--are no happier about being ripped off than their parent companies are. Thus a fair number of subscribers to the open-source "ethic" have simply turned on the artists, dismissing Metallica, which has sued Napster, as a bunch of stupid greedheads.

Perhaps they will do the same thing to Torvalds, for saying in today's Wall Street Journal that "piracy is bad." He's all for Metallica's lawsuit, he says: "While it's probably motivated mostly by money, I can still at least hope that there is a strong feeling of morals there, too." Another open-source hero, Perl language developer Larry Wall, adds that it is  "persons of leisurely moral growth [who] often confuse giving with taking."

That brings us to Ovitz, a man invariably described as a "superagent." The function of Ovitz's talent agency, Artists Management Group, is to wring money out of huge entertainment companies on behalf of his clients. (Of course, those clients aren't exactly struggling avant-garde types, and besides, the entertainment companies simply pass along their costs to the rest of us, but put all that aside for now.) Anyway, Ovitz seems to be casting his lot with the tech rebel crowd: He and a partner own 51 percent of a music site called Scour.com, which recently introduced a Napster-like feature that makes it easy for users to trade copyrighted music and other files.

So those bold pioneers advocating the junking of the whole copyright notion find themselves opposed by Torvalds, who is obviously brilliant and almost certainly well-meaning. But they seem to have an ally in Ovitz, a notorious player in one of the most slithery businesses in the world. Perhaps this turn of events will be enough to inspire the software geniuses trying to ram Napster and its various knockoffs down the world's throat to rein themselves in and come up with a strategy for spreading their own ideas without trampling the rights of everyone else.

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A final note on this: Torvalds, importantly, came down on the side of recording artists, not the recording industry, which in fact he referred to as "immoral." The record companies continue to argue an essentially reactionary line that is tone-deaf to interests of consumers. When they finally do get around to releasing significant material online, supposedly later this year, it's likely that they will do so at the same bloated prices currently charged for CDs. The argument is that by now the cost of producing CDs is negligible, and what record companies really contribute is marketing muscle.

Obviously, this is not an argument consumers are going to have much interest in--basically, they're saying that you have to pay $18 for your favorite artist's new release, because that's the only way the record companies can afford to create the next 'N Sync. Why should any consumer care about that? Now, plenty of artists care about it, and if you pay much attention to pop music, you will be familiar with artists' complaining that their label isn't doing enough to "push" their latest release. This is why, despite all the hype over MP3, the big labels still aren't exactly having trouble signing up the talent they want.

What seems to be happening as this battle lurches forward is that no one is particularly interested in giving some ground and working out a compromise that would benefit all parties. Maybe the feeling is that such a compromise is impossible, so scorched-earth tactics--renegade software releases followed by lawsuits followed by even trickier software--are the only way to go. This is hard to believe. It's also a line of thinking that seems likely to end up victimizing one of the two groups in the fray who least deserve to victimized, recording artists and their fans. Suffice it to say: Show me a revolution that ends up with Michael Ovitz as a prime beneficiary, and I'll show you a revolution that failed.