March 29, 2005

Mark Cuban on Grokster

A Q&A with the Internet billionaire and Dallas Mavericks owner about the Supreme Court online-piracy case, movie studios' reaction to his public opposition to them, and the future of digital content.

Carl Bialik

"Most of the problems I have are with copyright law and the politicians who get paid to pimp for the studios and labels," Mark Cuban tells Gelf Magazine, in explaining why he's waded into the legal battle over online file sharing.

Cuban is the owner of the Dallas Mavericks, co-founder of the high-definition television network HDNet, Internet billionaire, and no stranger to controversy. On his blog,—where he's previously written critically about the media, NBA refereeing, and the stigma surrounding the shorting of stocks—Cuban revealed Saturday that he's supporting the legal effort on behalf of Grokster, the online file-sharing network being sued by MGM Studios for allegedly infringing copyrights. "If Grokster loses, technological innovation might not die, but it will have such a significant price tag associated with it, it will be the domain of the big corporations only," Cuban wrote. (Supreme Court arguments in MGM vs. Grokster began Tuesday; see related Gelf commentary.)

A spokeswoman for the Electronic Frontier Foundation, the online civil-liberties group that is aiding Grokster in its legal defense, wouldn't tell Gelf how much Cuban is paying, but she did say his funds covered the hiring of D.C. lawyer Richard Taranto, a former clerk for Justice Sandra Day O'Connor.

In a series of emails Monday and Tuesday, Cuban spoke to Gelf about the case, movie studios' reaction to his public opposition to them, and the future of digital content. Here's the exchange, edited for readability:

Gelf Magazine: Interesting that you've taken an active role in the case. Are there other controversies in technology or otherwise that you want to get involved with, or have gotten involved with, in terms of funding the side you believe is right?

Mark Cuban: I just try to pay attention. I don't have a to-do list. Most of the problems I have are with copyright law and the politicians who get paid to pimp for the studios and labels.

GM: You refer in several places in your blog post to big companies, seemingly pejoratively. Is there something inherent about big companies in the content space that is bad, or is the issue more the strategy of the specific companies involved, individually and through trade groups like the RIAA?

MC: The people who are making the decisions regarding how they will pursue these issues don't own copyrights themselves. They are CEOs who get paid a boatload of money to be the CEO. Its their job to protect their jobs, not to do what might make their companies the most amount of money.

I have a huge problem with the fact that they are paying for our politicians to make decisions on copyright issues based on self-interest.

GM: You mentioned "the politicians who get paid to pimp for the studios and labels." Any specific politicians you're referring to?

MC: Orrin Hatch comes to mind. [Gelf didn't hear back from the office of Hatch, a Republican Senator from Utah, by press time. Many techies oppose the Induce Act, a bill co-sponsored by Hatch that would "hold tech companies responsible for creating devices that could be used to pirate digital content," as Wired News put it last year. Hatch received $179,928 in donations from the TV/movies/music sector in the last election cycle, according to]

GM: You say that software doesn't steal content, people steal content. So what do you think of the RIAA's strategy of suing individual file-sharers?

MC: I have no problem with it at all. If you steal, you are wrong. You should have to deal with the consequences. We have plenty of laws on the book to make sure that happens.

GM: At the intersection of your thoughts on content, and your ownership of the Mavs: Should the NBA be streaming video of more games online, like the NCAA has been doing during the tournament? Is this a major missed opportunity?

MC: Streaming video isn't really a big deal for the NBA because we never have weekday games during the day. For the NCAA it was important because the only way people in an office can watch a game starting at 2 p.m. during the week without playing hooky from work is to watch a stream at their desk.

At we did research that showed that only 7% of office workers have TVs on their desk. The PC is the primary in-office media device, so streaming for the NCAA makes perfect sense. It doesn't really make a difference for the NBA.

GM: I saw the Dallas Morning News article on your lack of worry about movie studios' reaction. Have any representatives of the MPAA or studios contacted you to complain about your public position against MGM? Do Landmark, Magnolia or HDNet have a direct business relationship with MGM?

MC: No. I have heard from employees of studios who are supportive. And yes. We will spend tens of millions of dollars with Sony over the coming years.

GM: Does the Betamax precedent apply to the Grokster case, even though people are using digital technology like Grokster to amass libraries, not just to tape shows and enhance viewing convenience?

MC: Yes. People amassed libraries on tape as well. You can pick up any movie-collector mag and see the ads to buy a VHS or DVD of any TV show ever made. That's a big library, and those ads have been there for at least 10 years. The industry doesn't care.

GM: Have you used Grokster? What do you think of the technology?

MC: Have not used Grokster. Have no plans to.

GM: How should innovators monetize this sort of technology? Need they rely on donations?

MC: That's up to them. Peer-to-peer has been around for about 20 years. I remember selling Artisoft software on LANs way back when and offering various applications that allowed for sharing of files and content of all types across those networks. Peer-to-peer isn't new. It's just that the music industry recently decided to be litigious about it. Just because the RIAA doesn't like an application and its uses 20 years later doesn't mean they should be able to stop any and all implementations of it.

GM: How much funding are you supplying to the EFF?

MC: Not for publication.

GM: Lastly and unrelatedly, does IU make the tournament next year?

MC: I hope so.

-- David Goldenberg contributed to this article./

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- Law
- posted on Mar 31, 05
Matt Livingstone

I agree with Mark and he is SO RIGHT to question the donations and payments made to politicians who are supposed to be representing the people NOT just the interests of BIG MONEY. Be it money from record companies, movies studios or BILL GATES!

If the BETAmax law is reversed or altered in such a way as to make it mute then ultimately consumers will pay and pay dearly.

- Law
- posted on Mar 31, 05
El Mariachi

I am glad that someone like Mark Cuban is supporting Grokster and other such software developers. Although I am not familiar with the "betamax law", I imagine it has something to do with the ability of the consumer to copy media for the purposes of archiving.
I don't think that law applies here, but as far as my stance is concerned, Cuban has it right on the money when he mentions the payoffs some of these politicians are getting. It's ridiculous, I mean, essentially by passing laws such as these, we are discouraging creativity within the software community. Another example of a society riddled with fear-mongers. All in the name of a few extra bucks in a civil servant's pockets. Remember folks, the first objective on any politicians mind isn't whether or not you get a tax break, it's whether or not they will be elected for another term.

As far as "stealing" from the music/movie industry, I think they are going after the wrong people. They should be going after the people who created the internet(including Al Gore!). That way no one can send anything without paying some corporation directly. Lets screw everyone while we're at it! What makes me laugh the most is that these guys still don't realize that for every P2P company they take down, 20 pop up to take their place.
I'll pay for music when the recording industry actually can eke out a record that has more than 2 hit songs on it. until then, i'd rather spend my music dollars on an iPod.


- Law
- posted on Mar 31, 05
Bill Strosberg

Mark Cuban seems to have a rational and sensible view of the issues. It is refreshing to see someone willing to take a stand for common sense, backed by enough topical knowledge to make their opinion worthwhile. Unfortunately, most of the opinions we hear on media are purchased or severely uninformed.

- Law
- posted on Mar 31, 05

Cuban makes the most interesting point when he complains that politicians are bought by trade groups to represent interests in conflict with the groups' own members' interests. Cuban, a huge content owner, wants the politicians that his trade groups are buying to get out of the way of the growing, lucrative P2P market. But he can't - he's got to resort to funding EFF lawsuits like Grokster to keep his freedom to do business on an innovating Internet.

His problem illustrates the real power, and its abuse, by the layer of American politics controlled by trade organizations. Even when their own members' interests are threatened, the groups' own perpetuation and enrichment is of course the only consideration in how the laws are made and enforced.

- Law
- posted on Mar 31, 05
Luke M

"Although I am not familiar with the "betamax law", I imagine it has something to do with the ability of the consumer to copy media for the purposes of archiving. "

The betamax law has nothing to do with archiving, its a law that says that makers of equipment which allow the copying of media is not responsible for the use of their equipment. Sony was part of a lawsuit (ironically enough on the other side of the table) in which they were sued because they made video cassette recorders and people were using them to tape tv shows. Sony won the case and the law says that the company cant be held responsible if someone uses their equipment for illegal purposes. That is what this is all about, P2P can be used for lots of legal purposes but they want to shut it down because of the illegal purposes which the betamax law currently doesn't allow.

- Law
- posted on Mar 31, 05

Cheers to you Mr. Cuban! No one fights for the good of the people anymore, not even a majority of the people. They're either misinformed or don't know how to act, or just don't care about politics. The issue is powerful industries trying to control innovation, but what they don't understand is that just because we, the populace, endured their pillaging our wallets in the past doesn't mean the government's job is to protect their "right" to pillage. The market changes and so must they. Lawrence Lessig wrote a poignant book called "Free Culture" about this very topic. It was released under a Creative Commons license, but also released in book form from Penguin books, meaning that you can download it for free or purchase it (like I have). And if you see this problem as there being too much corporate money in politics, as I do, just look at the 2004 election. Only one of the three major candidates promised to crack down on corporate money in politics. Ironically Ralph got the least votes out of all the candidates. This is what happens when the public is uniformed and inactive in politics.

- Law
- posted on Mar 31, 05

Following all these articles with interest... keep us informed on /. :)

- Law
- posted on Apr 01, 05

what is IU?

i wonder if Mark Cuban hasn't, indeed, used Grokster (and perhaps says he hasn't at the advice of his legal team). regardless, i applaud him for supporting the case.

here's the address to Mark Cuban's own comments, "let the truth be told," at his weblog:

- Law
- posted on Apr 05, 05

IU = Indiana University

Mark Cuban graduated from here (I'm a student :P)