The
Great Movie Piracy Conundrum
Our
studio partners have declared war on movie piracy. Hollywood
has pursued litigation, legislation and public moral suasion
to wage the battle. In recent years, the MPAA has dedicated
more of its financial and human resources to combat piracy
than to address any other policy issue.
NATO
has supported our partners in this effort. We have signed
on to legal briefs, shared our thoughts with elected officials,
and worked on public service messages. We have reached out
to our exhibition colleagues overseas to assess the issue
and develop an action plan. Piracy likely will not become
our biggest issue, because piracy threatens post-theatrical
release windows like home video more than motion picture
theatres, but we certainly recognize its importance. Indeed,
for some exhibitors (like the two young theatre owners from
Cyprus who contacted me recently), piracy may be more threatening
to exhibition than I once thought.
So the
war will be waged. Yet I have this nagging feeling that
piracy will not be stopped simply with the current strategy
of legal and policy confrontation. Nor, I suspect, will
technological advances in encryption and digital watermarking
completely stem the tide. I believe our studio partners
must also co-opt piracy with legitimate competitive entertainment
services, or lose the war.
The
movie
industry cannot afford to wait and see what happens.
New services must provide the time-controlling aspects
of the VCR, the PVR
and VoD. |
Movie
piracy comes in many forms. We’re all familiar with
the problem of the patron and his camcorder. But in the
coming digital movie age, it’s the phenomenon of peer-to-peer
file transfer over the Internet that causes the greatest
danger. File-sharing piracy can produce unlimited quantities
of high-quality copies at increasingly rapid speeds.
While
online file-sharing appears to have had a profound effect
on the music industry, I think it’s safe to say it’s
not yet keeping a lot of people away from the moviehouse.
Songs
occupy much less digital space than movies, and can be copied
very rapidly. Last year, according to the Recording Industry
Association of America (RIAA), sales of music CDs fell 6.4
percent, the largest decline in more than a decade, and
sales declined another 7 percent for the first half of 2002.
CD burner sales, conversely, rose 14 percent in 2001, and
sales of MP3 players doubled.
The
good news for the motion picture industry is most consumers
simply lack the technology for the rapid copying of movies.
By 2005, analysts say, two-thirds of Internet users will
still be using dial-up connections, and not the broadband
services so vital to sharing movies online. It appears we
have a little more time than our music industry colleagues
to develop a strategy that works.
What
strategy has been pursued to date? Full-scale war with every
possible weapon. Tens of thousands of cease-and-desist orders
have been sent to Internet service providers and Web operators
engaged in, or permitting the transmission of, pirated movie
signals. Lawsuits have been filed directly against the file-sharing
companies. Legal action has also been brought against those
who have developed technology that breaks encryption.
Legislation
has been proposed. In March, Sen. Ernest F. Hollings (D-S.C.),
the powerful chairman of the Commerce Committee, introduced
a bill that would require CD players, televisions and computers
to block unauthorized copyrighted materials. In July, Rep.
Howard L. Berman (D-Calif.) co-sponsored the Peer-to-Peer
Piracy Prevention Act, which would grant immunity to Hollywood
for “disabling, interfering with, blocking, diverting
or otherwise impairing” home computers that might hold
illegal copyrighted materials. (And keep in mind that these
bills are introduced on the fairly recent heels of a 1998
law that extended copyright protection an additional 20
years beyond the original 75.)
Are
these approaches sound? Perhaps we should look at the music
recording industry, which has fought the war just as hard
as we. Despite all their efforts in the legal arena, the
music industry is losing.
In my
view, it was a mistake for the record labels to ramp up
their online distribution services so belatedly. If it becomes
simple enough to download music from a licensed site at
an affordable rate, how many consumers will bother to seek
out a pirated product?
The
movie industry cannot afford to wait and see what happens.
New services must provide the time-controlling aspects of
the VCR, the PVR and VoD. Moreover, to look into the future,
licensed movies must be available with the flexible space
aspects of Internet-enabled portable computers and wireless
home and travel networks.
Will
competitive offerings completely eradicate piracy? Certainly
not. But the industry can substantially reduce piracy by
trying to please the consumer, and thereby co-opt the pirates.
