Courtesy of newyorktimes.com....
Studios Moving to Block Piracy of Films Online
By LAURA M. HOLSON
Published: September 25, 2003
OS ANGELES, Sept. 24 — If Hollywood executives have learned anything watching their peers in the music business grapple with online file sharing, it is how not to handle a technological revolution.
While the major labels in the music industry squabbled among themselves about how best to deal with Internet piracy and failed to develop consumer-friendly ways to buy music online, the movie industry has gone on a coordinated offensive to thwart the free downloading of films before it spins out of control.
This summer, night-vision goggles became a familiar fashion accessory for security guards at movie premieres as they searched for people in the audience carrying banned video recorders. The industry's trade association began a nationwide piracy awareness campaign in movie theaters and on television. Studios are aggressively putting electronic watermarks on movie prints so they can determine who is abetting the file sharing. And some movie executives are considering whether to send out early DVD's to Academy Award voters, fearing the films will be distributed online.
Also, as early as next month the industry will begin promoting a "stealing is bad" message in schools, teaming up with Junior Achievement on an hourlong class for fifth through ninth graders on the history of copyright law and the evils of online file sharing. The effort includes games like Starving Artist, in which students pretend to be musicians whose work is downloaded free from the Internet, and a crossword puzzle called Surfing for Trouble.
"There is no issue in my life I take as seriously as this," said Peter Chernin, president and chief operating officer of the News Corporation, which owns 20th Century Fox. "This is going to be with us for the rest of our careers. But if we remain focused on it, maybe it won't kill us and we won't have to panic."
This is not the first time the studios have battled technological advances they worried they could not control. Back in 1982, Jack Valenti, then as now the head of the movie industry's trade association, said the threat of videocassette recorders to the film industry was like that posed by the Boston Strangler to a woman alone. The studios hope they can find a way to co-opt online movie swapping as profitably as they did the VCR and now the DVD player. Still, many in Hollywood fear that online movie sharing could be the most serious menace to profits so far.
The concern is such that 20 of the film industry's top decision makers, including Jeffrey Bewkes, chairman of the entertainment group at AOL Time Warner, and Jeffrey Katzenberg, a co-founder of Dreamworks SKG, attended a focus group in June at the Museum of Television and Radio in Beverly Hills. The participants, about 20 college- and high school-age students, quickly and easily downloaded several current hits at the executives' request. Next they confirmed what many already knew. "These kids said they weren't going to stop," Mr. Chernin said.
As a result, in late July the major studios through their lobbying group, the Motion Picture Association of America, began an advertising campaign, with the theme "Movies. They're Worth It." It profiles, among others, a set painter, stuntman and makeup artist.
The music industry, which began feeling the effects of online sharing four years ago because the relatively small size of music files makes for much quicker downloads, began running national antipiracy ads only last year. Executives lament the delay. "It could have had an impact," said Hilary Rosen, the former chief executive of the Recording Industry Association of America, the music industry's trade group.
But music executives then were indecisive about how best to tackle online file sharing. "I think the music industry has always resembled feudal warring kingdoms with an underworld edge thrown in," said Martin Kaplan, a former executive at the Walt Disney Company who is now the director of the Norman Lear Center at the University of Southern California, which studies entertainment, business and society. "If you look at Jack Valenti's French cuffs, it is a different culture. Movie executives collaboratively deal with joint enemies at the gate."
Many Hollywood executives say there is still time before free Internet movie swapping takes hold. Internet movie files are still large and unwieldy, taking as much as two hours to download.
But there is a growing contingent who fear the threat is closer than some in Hollywood want to admit. Already industry analysts suggest there could be as many as 500,000 copies of movies swapped daily.
Hollywood is cracking down on what a recent study published by AT&T Labs found was the source of a large number of movies on the Internet: movie industry insiders. Now invitations to premieres include a warning about unauthorized copying. While the film is showing, the audience is closely monitored by guards.
Many in the entertainment industry privately say that only fear of reprisals, like the 261 lawsuits filed by the recording industry's lobbying group this month, will stop consumers from sharing files. But to change behavior in the long run, they say, consumers — particularly younger ones — have to be educated.
This fall the industry's trade association is joining with Junior Achievement, an organization based in Colorado Springs whose volunteers lecture students from kindergarten through high school on the fundamentals of business, economics and free enterprise. An hourlong lesson plan was created in conjunction with Warner Brothers Entertainment, a unit of AOL Time Warner, and covers the history of copyright, the economic benefits of both the music and movie industries, and the consequences for consumers who violate copyright laws.
Junior Achievement is projecting that the lesson, which will be taught both in school and after school, will be used in 36,000 classrooms nationwide and has the potential of reaching 900,000 students in grades five through nine, or about 10 percent of all students in those grade levels.
In the role-playing activity Starving Artist, for example, groups of students are encouraged to come up with an idea for a musical act, write lyrics and design a CD cover only to be told by a volunteer teacher their work can be downloaded free. According to the lesson, the volunteer would then "ask them how they felt when they realized that their work was stolen and that they would not get anything for their efforts."
Some in Hollywood and in education circles wonder if it is appropriate for the movie industry to be teaching children about the moral and ethical consequences of downloading when the legal and cultural issues are still being worked out. "You have to ask the threshold question, `Should any outside entity be allowed in the classroom?' " said Mr. Kaplan of the University of Southern California.
David Chernow, chief executive of Junior Achievement, counters by saying the industry's message that downloading is stealing is an ethical lesson not to be ignored.
Still, Hollywood executives agree that to succeed in changing minds, they have to come up with easy and cheap online alternatives to free downloads.
Movielink, the industry's first major effort, has met limited success so far. Started last November by five major studios, including Sony Pictures Entertainment and Warner Brothers, Movielink allows consumers to rent downloadable films via the Internet for 99 cents to $4.99.
But even some in the industry say Movielink is not flexible enough. Users cannot burn movies onto discs, and must watch the movies on a computer screen. And while rented films stay on customers' hard drives for 30 days before they disappear, the customers have only 24 hours to finish the film once they hit play.
Movielink recently rolled out an improved version of its product, and is backing it with an ad campaign aimed mostly at college students. Entertainment executives said the industry's fate would be decided more by the success of services like Movielink than a public relations campaign. "Movie executives have to be aggressive in their business strategy right off the bat," Ms. Rosen said. "Frankly if they don't take that view given what has happened in the music business, they should all be fired."
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