Online Piracy Frightens Movie Moguls

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mikenycLI
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Online Piracy Frightens Movie Moguls

Postby mikenycLI » Thu Jun 26, 2003 1:55 am

Courtesy of washingtonpost.com....


Special Report

Online Piracy Frightens Movie Moguls



by David McGuire
washingtonpost.com Staff Writer
Tuesday, June 24, 2003; 7:00 AM


Slasher flicks may be good for a thrill, but when movie studio chiefs really want to scare themselves, they ask to see the latest financial statements from their comrades in the recording industry. Music remains a very profitable industry, but illegal music file downloads are cutting away at recording firms' bottom lines, prompting them to wage an aggressive fight against a host of villains guilty of perpetuating music piracy.

Movie studios aren't in any danger of going bankrupt in the short term either, but their executives say if they don't learn from the record industry's experience, they'll also wind up as victims in the piracy horror film.

"In three to five years we could be in exactly the same place as the music industry," said MPAA Senior Vice President and Director of Worldwide Anti-Piracy Ken Jacobsen.

To date, the size (huge) and quality (poor) of most of the pirated movies and television shows available online have dampened their popularity among casual "peer-to-peer" file swappers. The same high-speed Internet customer who downloads dozens of digital-quality songs every hour may have to wait several hours to get one grainy, cheaply recorded copy of the latest Hollywood release.

The MPAA conservatively estimates that there are 400,000 illegal movie downloads occurring every day, a relatively small number compared to the countless millions of music downloads. But that will change, movie industry officials contend. Computers are getting faster, hard drives larger and broadband Internet connections more ubiquitous. At the same time, television and movie creators are experimenting with digital filmmaking technologies that could generate a slew of clean, digital copies early on in production cycles.

To prevent that from happening, movie studios have gone on the offensive, developing their own online distribution services, researching technological anti-piracy measures, attacking file-sharing networks in court, and pushing an aggressive legislative agenda aimed at limiting the availability of technology that can be used to steal movies.

It's those efforts that have civil liberties advocates questioning the studios' motives in raising the specter of peer-to-peer piracy.

"In the video world, nothing worth anything can be downloaded in any reasonable length of time," said Public Knowledge Senior Technology Counsel Mike Godwin. "What they're using is the hysteria over Napster as a way of pushing legislators' buttons over video piracy."

Free speech proponents say the movie industry's anti-piracy efforts disguise the more sinister goal of controlling computers so that consumers must watch movies when and how the movie studios choose.

A Growing Threat?

The MPAA acknowledges that their members have not felt the impact of peer-to-peer piracy the way record companies have. Movie studios posted record-shattering revenues of $9.5 billion in 2002, the MPAA said, while CD sales dropped from $13.2 billion in 2000 to $12 billion in 2002, according to the Recording Industry Association of America.

Music accounts for about two-thirds of free downloads of copyrighted material, according to a study released by Palisades Systems, an Internet security firm based in Ames, Iowa. Palisades found that movies made up 23 percent of copyrighted downloads, compared to 69 percent for music, in its study of 22 million file-sharing requests.

Even for users who have the patience and technological wherewithal to download feature films, the resulting viewing experience often provides a poor substitute for the real thing.

Within hours of a new hit song being released on compact disc, file sharers can download a clean digital copy of the song, almost identical to what they'd get had they purchased it. Movie files, by contrast, are typically analog, often recorded on camcorders smuggled into theaters. There is no evidence that film buffs are abandoning movie theaters in favor of watching grainy pirated films on their personal computers.

"Bandwidth continues to be the great wall that protects Hollywood from meaningful competition from file sharing and that wall continues to get thicker and higher," said Fred von Lohmann, a staff attorney with the Electronic Frontier Foundation.

High-resolution digital movies and television shows may be more attractive to pirates than the cheap analog copies that are so prevalent on peer-to-peer services, but those files are even larger than their analog cousins. Despite the popular assertion that Internet connection speeds are ramping up, belt-tightening efforts by telecom companies have left little money available for next-generation broadband rollout, von Lohmann said.

Like Godwin, von Lohmann believes that the movie industry's ostensible efforts to stamp out peer-to-peer file-sharing stem from a deeper desire not to repeat its experiences 25 years ago with the videocassette rentals, which created a substantial new revenue stream over which Hollywood initially had little control.

Movie industry officials also have taken their case to Capitol Hill, supporting the Security Systems Standards and Certification Act, sponsored by Sen. Ernest "Fritz" Hollings (D-S.C.). The bill would have forced computer and electronics makers to install anti-copying technology on electronics devices like DVD players. The MPAA also supported the Digital Millennium Copyright Act, a 1998 law that set out criminal penalties for anyone who disarms technology intended to prevent digital content from being copied by unauthorized users. It has backed similar legislation in several states.

"The common feature in all of these schemes is that in order to make the system work, the government has to ban any noncompliant device from the market," von Lohmann said.

The legislative push rankled computer manufacturers, consumer electronics companies and other technology companies, which claimed that the movie studios were trying to dictate the makeup of their products.

"We believe in intellectual property. We absolutely believe in the rights of intellectual rights holders, but broad technology mandates are simply not the answer," said Intel Corp. spokesman Bill Calder.

Intel, IBM, Hewlett Packard and other major technology companies felt so strongly about the MPAA's legislative proposals that they formed a new lobbying group -- the Alliance for Digital Progress -- to counter them.

Calder said the movie studios have made good progress in promoting their own legal download services and should focus on that rather than foisting requirements on other industries.

The MPAA's Taylor said that the music industry's experience points to the need for more protection for copyrighted works, and that is the only reason the studios are pressing for change.

"You don't sit idly by while your things are stolen from you," he said. "This is not the case of an industry that's making up a problem to get to some cabal-like endgame where we're controlling everyone's home computer."



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