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Peter Csathy Of Creative Media - The Highly Customized And Connected Media, Music, Entertainment, Tech And Legal Business Advisory Services

Peter Csathy Of Creative Media - The Highly Customized And Connected Media, Music, Entertainment, Tech And Legal Business Advisory Services

With the rapid growth of technology, media has long since evolved from what it used to be. These days, it rarely suffices to view media from one perspective; you need to be multidimensional or even beyond. This episode’s guest does that. Peter Csathy is the creative force behind Creative Media, where they are revolutionizing tech, legal, and business with their unique 360-degree approach. With his diverse background in entertainment, law, and technology, Peter dives into the world of Web3 and NFTs and their impact on the creative industry. In particular, he highlights how NFTs engender disintermediation between artists and their audiences. He also talks about the challenges these technologies present from a legal and regulatory standpoint, citing high-profile cases like the Warhol-Prince dispute and the Birkin bag. What is more, Peter joins our hosts in a discussion about the latest stories happening in Web3—from FC Barcelona partnering with World of Women for an NFT auction to the German intelligence agency using NFTs. Tune in to this jam-packed episode and learn more about Creative Media and the intersection between entertainment, legal, and the tech world.

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Peter Csathy Of CreativeMedia - The Highly Customized And Connected Media, Music, Entertainment, TechAnd Legal Business Advisory Services

This is Peter Csathy of Creative Media, the venture where we’re revolutionizing tech, legal, and business with our unique 360-degree approach. I’m thrilled to be on the show that is equally trailblazing and showcasing top-notch Web3 projects with its 360 audio goodness. Keep tuning in.

Stay tuned for this episode to learn how NFTs engender disintermediation between artists and their audiences, and how our super smart guest can throw around cool vocab words like that.

Plus, hear how skydiving inspires one leader in Web3 to explore new terrains on the outer edge of this planet’s atmosphere.

Finally, German intelligence is spying on Web3 through the intriguing world of the Dogs of BND NFT collection. All this and more on this episode. Before we move on, don’t forget that our Outer Edge LA event returned to LA from March 20th to the 23rd, 2023. You can catch up on all the discussions, presentations, and more by heading over to Watch.OuterEdge.live and registering. If it’s your email address, then you’ll have access to over 60 captivating conversations and performances. Binge watchers are welcome. Netflix, watch out. We’ll see you inside.

This episode’s sponsored episode is part of a media partnership with our guest, and that’s Peter Csathy, the creative force behind Creative Media, a novel venture pioneering in media, music, entertainment, and tech advisory services. Navigating the crossroads of traditional and tech-driven media, Peter’s global reputation is anchored in his unique expertise and his ability to fuse these two worlds seamlessly.

His illustrious three-decade-long career is studded with high-stakes deals, leadership roles in trailblazing media tech companies, and strategic tenures in major studios. Spearheaded by Peter, Creative Media is not just another advisory firm. It’s an innovative venture shaping the landscape of legal and business services in the media and tech spaces.

Peter, welcome to the show.

It is great to be here. Thanks for having me. What an introduction. I got to live up to it.

That’s what a lot of our guests say. It’s like, “I’m feeling competitive now.” For the reader at home, it’s always fun to give them a sneak peek if we have an interesting background visually. You’ve got some guitars out there. It looks like you’re a very musical person. That’s a fun reason to check out the YouTube video and see where you’re hanging out.

There’s a lot of music in my world. That’s for sure.

It sounds like it.

I know a little bit about your background, Peter. We’ve known each other for a little while. I was excited to have you on the show. You look at the world of Web3 through an interesting filter with your music background but also your legal background. You take a 360-degree approach through Creative Media to how you view the world. I don’t have a deep legal background. Eathan doesn’t either, but you do. Let’s go into that, but first, share with us how your unique venture was conceived and how you go about looking at this space that we call Web3.

Thanks for having me. Three decades is insane at this point to even think about it that way. I’ve worn about every hat in the world of entertainment. I started off as an entertainment IP lawyer back in the day. One of my early clients was NWA, which, in an interesting twist of fate, led me to my wife. That’s pretty wild that NWA led me to love.

I then went into the studios where I became more of a business guy. I was at Universal and other places. I negotiated deals from $1 to multi-billion dollar joint ventures around the globe. I was then a serial entrepreneur that was running tech-forward media companies as a CEO for a number of different companies, including one that was Spotify before Spotify. We were acquired by Yahoo! back in the day. It was a company called MusicMatch. We were on the cutting edge of streaming. We were amongst the first to create on-demand streaming, and then a couple of other companies.

For the past years on my own with Creative Media, I’m a deal maker, connector, external general counsel, advisor, and board member. I wear a lot of different hats. The reason why and what Creative Media really came out of was the fact that I have worn all these hats. I understand technology pretty deeply because I ran technology companies that were always in the content world.

I’m not a lawyer in the sense of being a non-operational guy. I’ve found that from Creative Media, the help for clients and those who I advise is the fact that I can bring this 360-degree background together. I understand how entrepreneurs are when they’re building companies. I’ve been there trying to raise capital. I’ve been there on the M&A side, so I know what the ride is like. Hopefully, I can help them be a problem-solver.

360 is great. We have a little bit of that at Edge of Company as well, but it might take three people to get the 360 view. You got me, Jeff, and Josh at the helm here.

You guys don’t have three decades. You’re younger than I am.

At that point, we might have some beyond 360 multidimensional things going on because there are even more domains at play. I get that and the value of that. It’s so rare for people to be cross-disciplinary. It’s hard to calculate the value because it’s so easy to get siloed within a specific domain. It’s even hard to succeed within a specific domain if you don’t go too deep. You’re doing things in NFTs, which is its own domain. It may benefit from the diversity of your experience as you’re navigating this and doing this with the people that you consult with and work with. What are the most significant legal developments and general developments you’re observing?

First of all, I’m going to step back a second. The whole idea for what you mentioned is staying on top of everything. No matter what role you play, it is so critical to stay on top of where technology is taking the business. I’m in media, entertainment, content, creators, and audiences. NFT is, to me, naturally the ability to, for the first time, have a direct connection between the creator and their audience, create communities that way, take out the middleman, and have a mechanism to be able to do that.

No matter what role you play, it is so critical to stay on top of where technology is taking the business. Click To Tweet

Before even the name NFTs, I believed in that idea. I am seeing it come to fruition through NFTs or whatever you call them. They may be digital tokens. NFTs have almost gotten, in the entertainment community, a bad name because they’ve been mixed in with crypto, crypto winter, and all that, which is fundamentally not the same. There is that high level where the idea of direct connection is something that is obvious.

The changes that I’ve seen since NFTs and what they represent on the legal side or on the business side, because business and legal go directly together, is that everything is happening in real-time. This was coming to light in the last couple of years in terms of content creators generating NFT opportunities. There were few rules of the game and few people who understood them. It was the Wild West.

With any new technology, AI or whatever, you see the evolution of it where people are trying to figure it out. You have the early cases where there’s a problem that comes up, and then there’s a janky solution that courts or the litigation system come up with. Ultimately, there is a call for regulation. Regulation is created by those who don’t understand what’s happening, but they do their best, which creates more problems and disputes.

NFT Peter Csathy | Creative Media

Creative Media: Regulation is created by those who don’t understand what’s happening, but they do their best, which creates more problems and disputes.

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I’ve seen that evolution in the Web3 space, with NFTs, and the media business. They are all happening very fast. No matter what role you play in this world, you need to stay on top of this stuff because it impacts everything, how you create, market, and sell. In the last several months, there’s been a hell of a lot of activity from the calls to regulation where regulation is beginning to pick up steam, but also some resolutions of some highly watched cases in the NFT space.

Andy Warhol will talk about that and how it impacts some of the other cases that I’ve been tracking. That’s the high level of this natural evolution of a new technology where people are trying to figure it out, so the courts end up doing the best they can. Everybody who’s in the ecosystem looks at the clues that have been created and tries to mitigate the risks that they have as they go about it.

It’s a mantra. It’s a good one to have. We’re all doing the best we can with the resources that we have and compassion.

It’s gotten a lot more difficult to keep pace legally and from a regulatory perspective with the pace of technology. Look at what’s happening with AI in terms of folks saying, “Stop the presses. Hold for it here.” If you’ve listened to any of the congressional testimony on AI, you realize there’s a major educational gap when it comes to folks that are making these decisions and their relative knowledge of the domain. That is the case with Web3 as well. You have folks like Yat Siu that spoke at our event, the Chairman of Animoca Brands. He is all about the right regulation at the right time. Is that what folks want on the regulatory side? Some of them don’t want regulation because then, it legitimizes this industry.

First of all, you’re so right about those who are trying to create the regulations. You look at the Senate and Congress and the median age. It makes me look like a young man. There is very little understanding and depth of that understanding for the world of Web3 and NFTs or AI. It does move too fast. It’s the typical conflict where there’s a new technology that butts up against people trying to figure it out and being afraid of it. It tries to work itself out the best it can by creating some general guardrails and then bobbing and weaving.

In the Web3 space, there have been some real pronouncements though in the last few months that are significant. Some significant cases have come down that have made conclusions that weren’t there before. If you guys are interested, I can mention a couple of them. Certainly, then, there is also the Supreme Court case that does impact the way that artists and creators in the Web3 world are on either side. It is those who are content owners and creators and those who are creating other works that may be derived from or somehow built on top of them.

You mentioned that court Warhol case previously. I’m looking over it. You’ve got a photo of Prince, which appears to be taken by someone else besides Andy Warhol, and then an Andy Warhol print there, which is pretty much clearly a few strokes different than the photo. If you have to translate something from photo to image, you can tell one thing came from the other. Tell us about this and how this is related to NFTs. Tell the audience about it a little bit more so they understand what’s going on.

In the Warhol case, there was an original photograph. Andy Warhol did use that as the basis of creating a series of works based on prints. Although it’s a couple of brush strokes, it’s very Warholian in its style. It’s like if Andy Warhol did the Campbell’s soup cans, which were very literal depictions of it. Here, you have Prince. One would typically say it was a transformed piece of work going from the photograph to the artwork.

What happened was that Warhol’s work was put on the cover of Vanity Fair Magazine after Prince’s death because it was a collector’s issue. In that particular case, there was no permission sought by the underlying photographer of the work, only from the foundation that owned and retained the rights to Andy Warhol. The photographer was not happy about that. The photographer felt like it was stealing an opportunity for her, a commercial opportunity. It was where if Warhol’s work wasn’t there, then maybe Vanity Fair would’ve licensed her and paid her to use her photograph, but Warhol’s work disrupted that chain.

To clarify, is this something where it’s very openly clear that these two things are connected and maybe Vanity Fair should have known that they should have cited the photo and they didn’t happen to, or did it come out in this whole thing that it came from the photo?

It was very clear. What’s interesting is that Vanity Fair or one of the publications in Condé Nast several years before that did license and did pay the photographer. In this case, fast forward several years, it didn’t happen. It was probably a slip-up, but whatever. It didn’t happen. When the photographer then went to seek some compensation, Vanity Fair said and the Foundation for Warhol said it was fair use. This work that Warhol created was a transformational use.

In the world of copyright, typically, if you create something on top of somebody else’s and transform it, it’s transformational. That’s a term of art in the legal world. Typically, it’s found to be non-infringing as fair use because you’ve created it into something different. In this particular case, many were surprised that the Supreme Court came down and said no.

NFT Peter Csathy | Creative Media

Creative Media: In the world of copyright, typically, if you create something on top of somebody else’s and transform it, it’s transformational.

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Even though this is Andy Warhol and he is famous for doing these kinds of works where they’re built on top of things like the Campbell’s soup can and things like that, what you did hear is, “You took this business opportunity for this photographer. You competed with this photographer directly to be on a magazine cover. You weren’t paid and Warhol was paid.” It was found to be an infringing use. That was a very seminal case.

I would disagree. Looking at it, having something that says Warhol-Prince is way different than having a photo of Prince. That’s my opinion. I’m not in the Supreme Court.

You hit the nail on the head. It is everybody’s opinion. You can be on one side of the fence. What’s interesting about that Supreme Court case is that you have two of the most liberal justices who were on opposite sides of that decision. Sotomayor and Kagan were on opposite sides. Sotomayor wrote for the majority. Kagan was on the opposite side. They’re never separate from each other.

What was so fascinating here was that Kagan had the same reaction. She said, “Are you kidding me? What are you doing here?” They were coming at each other in a way that was very surprising because of that. The reason why it ties into NFTs is that there are a number of cases, and I alluded to them, where there is an NFT that’s created that is based on something else that’s owned or created by somebody else. There’s an infringement case that was brought against the person who created this work on this NFT that was on top of this other person’s work. There was a fair use defense.

I’ll give you an example if you want one. You may have heard of the Birkin bag case with Hermès and Mason Rothschild. I’m not a Birkin bag guy, but for Hermès, the fashion brand, Birkin bags are a big deal. Apparently, they are very expensive. There’s an artist, Mason Rothchild, who created what he called MetaBirkin. They were these little digital bags that were in the metaverse and he sold them. He created them where they looked like physical Birkin bags, but they were little depictions of them.

Hermès sued Mason Rothschild saying, “You can’t do that. We’re the creators of the Birkin bag. If we want to create NFTs on that, that should be up to us. That shouldn’t be up to you.” Rothschild said, “That’s fair use. I created something that was a commentary on your Birkin bags. Your Birkin bags are meant to be only for the privileged. My commentary is that it’s available to everybody now, so it’s fair use.”

Interestingly, there was finally a jury verdict against Mason Rothschild in Hermès’ favor a couple of months ago. That was kicked out. There was another one that was analogous to that that was against the NFT creator for similar reasons. It was where there was a fair use that was claimed, and the court had found that it was bogus. All they were doing was trying to monetize the IP or the creativity of somebody else.

It doesn’t help that he called them MetaBirkin.

It is so interesting when you break it down like that with how complex these things are and nuanced. I remember early in this Web3 boom moderating a panel with four different lawyers on the metaverse. I don’t think there was actual consensus on any one question that I asked the group around, “What happens when a company based in one country sells an item to someone in another country? It is co-created by people in three other countries and it’s a mashup of some other items, and AI was used to create that mashup.” You get chaos on wheels at that point in time.

If you add the geographic elements of it, the different territories around the world, and there are over 200 of them, all have different rules of the game, then you’ve opened up something completely different. Everybody thinks that the law as being black and white, but it isn’t. There is subjectivity in all of these kinds of things. That’s why, ultimately, it’s critical for everybody to follow this stuff closely. Otherwise, you’re opening yourself up to a lot of risks. You want to be able to at least understand what the legal landscape and business landscape is shaping into. You can then make your decisions where you are like, “If I do this, maybe it’s a little bit more risky. If I do this, it’s a little bit less risky.” That’s such a critical part of being in any business.

Let’s switch gears a little bit and talk about the intersection of Web3 NFTs in the entertainment industry, which has created a lot of promise for these new artists. By artists, we don’t just mean digital artists or painters or mixed-use materials like musicians, you name it. Could you elaborate on what you think the opportunity is there that this intersection presents and maybe how that opportunity has evolved as you’ve been looking at it?

I mentioned a little bit earlier that I believed in the idea of NFTs for years. I wrote an article in Variety several years ago about the concept of the beautiful thing about streaming is that it allows a direct connection between the audience and the musician. It opens up a world where it expands the audience, and it’s up to the artist to then take that expanded audience and find new ways to monetize. I believed in that concept.

Don’t say that, Peter.

You got to keep it real.

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I am ready.

What is the most recent thing you purchased?

I won’t be joining you on that adventure.

I’ll join you.

That’s not a very close relationship.

It’s pretty funny.

It’s creative.

Let’s hope.

You’re a little bit too close to home here.

He plays in the Wisdome.

I do not know him.

We’ll have to make an introduction.

Maybe some could call it manic. I don’t know.

AI has produced a definitive answer. Zeal.

What does your wife do to cool down the engine?

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It’s bragging rights.

Good for you. NYU owns a ton of property.