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Weekly Column

Never Trust a Pirate: How Bad TV Movies and Misrepresented Business Deals Prove Once Again That Nothing is As It Seems

Status: [CLOSED]
By Robert X. Cringely
bob@cringely.com

If you were scanning cable TV channels on the night of June 20, it would have been nearly impossible to miss Turner Network Television's "Pirates of Silicon Valley," a movie nominally about Steve Jobs and Bill Gates. TNT ran the show over and over again that night so you could, with very little effort, see it in almost any order. Many people saw a similarity between "Pirates of Silicon Valley" and my own "Triumph of the Nerds." Me too.

"Pirates of Silicon Valley" is about people who, for the most part, didn't live in Silicon Valley. Perhaps a better title might have been "Triumph of the Geeks," and that WAS the title until my rabid lawyer, Claude Stern, went into action. "Pirates of Silicon Valley" was based, instead, on a very good book called "A Fire in the Valley" written by Paul Freiberger. Alas, Freiberger's book was published before at least half of the events in the movie even took place.

The movie producers said in published interviews that they deliberately chose not to do interviews with any of the actual characters. Noah Wyle, star of "ER" and the actor who played Steve Jobs in the movie, said he was convinced to take the role when the producers played for him the "Triumph of the Nerds" video. Certainly "Pirates of Silicon Valley" looks a lot like my show. Some words seem to have been taken verbatim. Certain camera shots are almost identical. If imitation is the sincerest form of flattery, then I should feel very flattered, but I don't.

If, like me, you grew up on Superman comic books, then you know the difference between green, red, and gold kryptonite. You also know about Bizarro Superman, a jaggy copy-of-a-copy of the man of steel who kinda sorta looked like Superman but did everything in a backward, dorky kind of way. "Pirates of Silicon Valley" seemed to me to be a bizarro version of "Triumph of the Nerds." The characters were all there, but they didn't look quite right. The facts were there, some of them, but a lot of it was backward (IBM, for example, came to Microsoft for an operating system, not the other way around).

The problem with bizarro reality is that it's simply wrong. People will look at this movie and think it portrays history when it doesn't. "Triumph of the Nerds" portrays history. At best, it is an impressionistic view of the life many of us have led for the past two decades. I only wish the impressionist had a better eye.

They could have called me, these "Pirates" producers. They could have called almost anyone who was actually near these events and done a better job. Noah Wyle was a good Steve Jobs, but the rest of the show was seriously flawed and a great disappointment to me. The other characters were more caricatures, especially Bill Gates.

And here's why I am disappointed. Certainly it's not because Paul Freiberger was paid something and I wasn't. I am disappointed because most people who see this movie will think it represents actual events rather than some screenwriter's attempt to be entertaining. People will think this is history when it's not.

Going further, there is the risk that Hollywood will think this very interesting story has been "done" and might never look at it again. There is in this story far more than the producers of "Pirates of Silicon Valley" could ever know — a story of such depth and texture that it has epic status. Not only is this the story of the greatest fortune in modern history, but a story of such complex and dark relationships that are almost beyond belief. This could have been — this could be — a great subject for a film, but now it might not ever happen. The theatrical possibilities of this subject go far beyond "Pirates of Silicon Valley" and even beyond "Triumph of the Nerds."

And I'm the guy who knows it all. If you happen to be a friend of Oliver Stone, please give him my number.

That's enough about movies. There is so much happening in the news of late that I can hardly contain myself. Did you see the item about America Online investing $1.5 billion in Hughes, the division of General Motors behind Direct TV, the satellite TV company. What the heck is going on there? I think this is a fascinating item.

Direct TV has satellites capable of carrying about 200 video channels, though this number keeps increasing with improving technology. At least 175 of these channels are in constant use, with the rest devoted to a variety of video and data services, including the Direct PC Internet service. AOL is paying $1.5 billion ostensibly for access to some form of Direct PC for AOL customers.

That's fair enough. But Direct TV's big competitor is another fleet of satellites called EchoStar and home of the Dish Network. EchoStar has a capacity of 2000(!) channels with only about 175 in constant use. With ten times the capacity of Direct TV, EchoStar is trolling for data customers. AOL could have the same deal with EchoStar that it purports to have with Direct TV WITHOUT having to cough up the $1.5 billion.

Is AOL stupid? Hardly. As we frequently see, there is more to this deal than the principals are saying.

AOL is investing in Hughes, buying special shares that carry a 6.5 percent dividend. That's about what AOL pays to borrow money at the prime lending rate. And since the collateral is Hughes, itself, this investment presumably won't hurt AOL in any way. It will be able to borrow just as much as ever. I'm willing to bet, too, that Hughes — or Hughes's GM parent — has guaranteed AOL will not lose on its investment. So there is only an upside for AOL in this deal. If Hughes stock goes up, AOL makes money on an investment that costs them nothing.

But doing a favor isn't enough to make AOL bother to do this deal. The other reason is to scare the very people who ought to be worried about the prospect of satellite access taking over the Internet — the telephone companies and major fiber supplies like Qwest and Level 3. This AOL investment looks on the surface like a major commitment. It isn't, of course, but it looks like one. And the next time AOL negotiates with any non-satellite network providers, Steve Case and company will demand (and get) enormous concessions.

And THAT's why the deal had to be done with Hughes and not with EchoStar. A threat without that $1.5 billion behind it wouldn't be viewed as a threat. Going with EchoStar would have gained AOL only satellite Internet access, which probably isn't of real interest to Steve Case at all.

So we have a bizarro TV movie and a bizarro Internet deal. Nothing is as it seems.

There must be a lot of bad kryptonite going around.

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