How the MPAA Can Become Great Again

How does one of the most famous and important American trade groups reinvent itself? For 30-plus years, I fought against and occasionally worked with the Motion Picture Association of America (MPAA). Its longtime head Jack Valenti, who served as president of the MPAA from 1966 to 2004, was both my debating and lobbying nemesis. But in later years, our relationship shifted from adversarial to respectful and affectionate.

Jack was masterful as a leader and an advocate. During his tenure, the MPAA fought for two basic principles: protecting the First Amendment and expanding copyright. The MPAA sought to broaden copyright protection by lengthening the copyright term, adding to infringement penalties and spreading U.S. legal protections abroad. Jack cajoled, befriended and led the motion picture industry. With only a few big studios headed by executives with even bigger egos, Jack told me the MPAA moved forward by never having board meetings. Instead, he used one-on-one calls to convince each of his members on a course of action.

But seven years after Jack's death, the MPAA is floundering. In 2012, its centerpiece legislative proposal – a poorly drafted bill aimed at curbing piracy on the Internet – suddenly died when millions of Americans contacted members of Congress in opposition. MPAA Head Chris Dodd, a former Senator, took flak for whining in response that politicians receiving motion picture industry money did not stay loyal to the MPAA.

Since then, the MPAA has faced an unclear path. It sought special industry tax benefits and attacked search engine Google (one of CEA’s more-than-2,000 member companies). Yet when North Korea threatened and then cyberattacked MPAA member Sony Pictures, the association was quiet. Although Dodd later said he regretted this silence, on Feb. 5, The New York Times reported Sony considered dropping out of the MPAA. More, according to the Times story, the MPAA is now considering how to change to become more effective.

What the Times did not say is how leaked emails from Sony revealed that the MPAA funded a campaign to convince state Attorneys General to sue Google. The emails revealed that even though Google had done nearly everything the MPAA had asked, the association withheld any strong, positive comment so as not to deter the Mississippi attorney general from bringing a lawsuit (whose complaint the MPAA lawyer drafted) against Google. The emails certainly embarrassed the MPAA, revealing a rather ethically-challenged and dubious strategy. Their disclosure also helped prompt news that Google no longer deals with the MPAA, and catalyzed a lawsuit by Google against the Mississippi AG (which CEA is supporting).

As a "frenemy" of the MPAA, leader of a successful technology trade group and student of association governance, I have specific ideas on how the MPAA can reclaim the greatness its industry deserves.

First, the governing board must take responsibility for the ethics of the association. Ethical principles should be stated and clear. Given that a big part of copyright compliance relies on ethical behavior of consumers, it behooves MPAA leadership to set and require staff to follow the highest possible ethical tone.

Second, the board must act as a governing board. This means focusing only on high-level strategy, hiring, supporting and evaluating the CEO, and empowering staff to make decisions consistent with organizational goals. For example, if protecting the First Amendment is an MPAA bedrock principle, the CEO should not have to obtain permission to speak on any First Amendment-related issue from every board member. Reportedly, the MPAA failed to issue a strong statement supporting Sony Pictures because Dodd could not get unanimous approval from every MPAA board member. In over 20 years heading an industry trade association, I cannot recall one time when I ran a press release by our board members for approval. This type of board micromanagement prevents timely reactions and hampers effectiveness.

Third, the CEO must be a CEO. An effective CEO is ethical, takes risks and proposes strategies effective for the organization. The MPAA board and its CEO need to have a frank discussion about their appropriate roles and responsibilities. As a CEO and board member of various groups, I have regularly relied on a simple chart laying out the clear roles of the chairman, the board and the CEO for advising, recommending or approving strategy and policies. Whether it is a hiring decision, investment, strategy, capital purchase or policy position, every role is clear. The organization then operates with accountability for decision-making and execution.

Of course, a CEO should not confuse the right to make decisions with good judgment. For example, although I have the authority to hire and fire employees, I would not ordinarily terminate a top employee without discussions with leading board members.

Fourth, the MPAA could do a better job promoting public policy in the United States by emphasizing not only the jobs its industry creates, but its huge global cultural and language impact. Hollywood is magic, its stars are alluring assets and its story-telling ability is unrivaled – truly a great, American industry. As the world looks to America not only for ideas but culture and language as diffused through Hollywood, the MPAA has a strong case on Capitol Hill. Sadly, the American public and Congress also know Hollywood through its ominous FBI warnings preceding every movie. They also know a history of mistakenly opposing technology and lobbying for laws which could cripple the Internet.

The MPAA has an opportunity to press the reset button and start fresh. Its strategy of opposing innovation, funding unreasonable behavior by politicians and attorneys general, and its general untrustworthiness in dealing with companies like Google needs to change.

Change starts with the MPAA Board of Directors. Simply continuing in the same direction and expecting different results is the very definition of stupidity. It's time for the leadership of the magnificent motion picture industry to be magnificent.

Gary Shapiro is president and CEO of the Consumer Electronics Association (CEA)?, the U.S. trade association representing more than 2,000 consumer electronics companies, and author of the New York Times best-selling books, Ninja Innovation: The Ten Killer Strategies of the World's Most Successful Businesses and The Comeback: How Innovation Will Restore the American Dream. His views are his own. Connect with him on Twitter: @GaryShapiro.