Tag Archives: movie industry

Not BitTorrent But Poor Movie Distribution Logistics Is Hurting US Box-Office

Economics researchers at Wellesley College and U Minnesota have managed to infirm the suggested link between feature films’ US box office returns and BitTorrent sharing. Their published study also points out that reducing the timeframe between the US exhibition and overseas releases could result in less file-sharing, thereby reinforcing the premise that most people outside the US download movies because they can’t buy tickets to them.

The findings draw up a picture where file-sharing, or at least part of it, occurs as a result of imbalances in supply and demand. Failing to fulfill demand in other countries is what drives casual moviegoers towards illegitimate routes in the first place. The longer people have to wait for their favorite movie, the higher the chances they will resort to illegal download instead.

This theory, however, doesn’t cover all illegal downloading, as some people almost never walk into a movie theater to see their favorite releases, irrespective of movie availability. For this category of people, the delayed release actually renders downloading easier and more attractive, so they constantly resort to file-sharing to snatch a copy of the movies they like onto their computers.
“Anti-piracy” campaigns are often depicted as life-or-death struggles for the studios to stay afloat in the business.

In truth though, this is more a matter of profit maximization, not survival. Regardless, increased awareness on the problem of optimizing international releases could secure good profits at the box-office, while also helping to bring down exaggeratedly high and often unnecessary investments in copyright enforcement.

Here’s the study: Reel Piracy: The Effect of Online Film Piracy on International Box Office Sales, by Brett Danaher (Wellesley College – Department of Economics) and Joel Waldfogel (University of Minnesota – Twin Cities – Carlson School of Management ; National Bureau of Economic Research (NBER); University of Minnesota – Twin Cities – Department of Economics).

According to the findings, “consumers in the US who would choose between the box office and piracy choose the box office (and the remaining US pirates had valuations lower than the ticket price) but that international consumers who would consider both options choose piracy due to a lack of legal availability.” The researchers also pointed out that “if piracy displaced box office sales in the US, we would have expected the slope of the returns profile to shift more significantly as BitTorrent became more widely adopted.”

Simply stated, researchers were unable to pinpoint an irregular drop in returns of domestic box office sales, which could implicate BitTorrent.

Although countless studies have provided evidence to the needlessness of the movie studios’ assault against file sharing services, the latter are subject to ongoing harassment. In the end, these findings suggest that, while some amount of pressure directed at file-sharing services may be useful in inducing the fear of prosecution among other file-sharing competitors, it is in fact the studios that have the power to contain piracy, and a shift in perspective would be constructive.

Viacom’s “Plunging” Income Enough to Stuff $50 Million into CEO’s Pocket

We are already familiar with the MPAA and their ways of enforcing anti-piracy laws. Just take 2008 into consideration when they pushed the PRO-IP Act through, allowing the federal government to seize and shut-down domain names that were considered to be copyright infringers.

In 2011 the MPAA has become the uncrowned king of the anti-piracy war with their biggest campaigning – the “rogue sites” legislation (about which you can read here), granting even more power to the same government.

In 2010 Viacom – whose Paramount subsidiary is an MPAA member – has told the Wall Street Journal that “a new wave of digital piracy could threaten the US media business” if it lost its copyright infringement lawsuit against YouTube.

To have their back, MPAA stated that “when profits are reduced, the studios have fewer dollars to invest in movies, and when there is less money to invest they make fewer movies and the diversity and variety of films we love become more limited.”

Following a CNN report on the 20 biggest CEO pay raises, ArsTechnica found out that Viacom’s CEO Philippe Dauman is placed on the first position with a raise of no less than $50.5 million in 2010; that’s a 149% paycheck improvement in comparison to his lesser income in 2009 of $34 million. The plummeting revenues of the US copyright industry have, by far, surpassed the entire US economy, but this old news.

Both the MPAA and Viacom refused to comment on ArsTechnica’s finding. What a surprise!

BT’s Piracy Countermeasures to Rise Broadband Bills?

Last Friday London’s High Court of Justice held the meeting between BT and MPA (Motion Picture Association); the purpose of the gathering was to discuss the countermeasures that are to be applied against the unlawful Newzbin2 website as everyone already knows that BT was ordered to block all access to the respective site.

However, the critics’ opinion is that this will only lead to a “degraded internet service” and higher broadband bills for all of BT’s subscribers. Among these there’s the Consumer Focus (CF) which warned that the measures are a “blunt tool” as they successfully fail to address “the root causes of why people infringe copyright”.

“Website blocking technology is crude – often perfectly legal sites are inadvertently blocked too, raising the issue of ISP subscribers being denied access to legal content and services.

Expense – web blocking is an expensive option for ISPs. Effectively an ISP could end up facing multiple injunctions ad infinitum – our concern is that the expense incurred will end up on consumer bills, increasing the cost of broadband for all.
Website blocking can also result in degraded internet services, meaning UK consumers could face a reduction in speed and network reliability,” said the organisation.

Furthermore, BT’s actions can hardly eliminate the source of the problem as they have no physical access to remove the infringed content or to block it completely; and to make things even more complicated, Newzbin2 has already set up its own countermeasures against BT’s Cleanfeed. More info at these links (1), (2) and (3).

“Website blocking is a blunt tool which doesn’t address the root causes of why people infringe copyright. By attempting to block sites such as Newzbin2, the movie industry will only ever be papering over cracks.

The Competition Commission recently found that the way Hollywood movies are licensed to Sky limits consumers’ choice in the pay-TV market. At the same time the US “all-you-can-eat” online movie subscription service Netflix wants to launch in the UK, but is finding it difficult to get the necessary licensing.

The big studios seems intent on paying lawyers to play ‘whack-a-mole’ with unlicensed film sites through the courts. Instead the MPA should be devoting its energies to providing legal alternatives which meet the massive consumer demand for its movies. Technology is moving faster than traditional studio business models and Hollywood must foster innovation, competition and choice if it is to find a long-term solution to the issue of copyright infringement,” said Jill Johnstone, Director of Consumer Rights Policy at Consumer Focus.

(Bad) Apple – An Issue for the Media Industry?

Mike Lang, Miramax’s CEO

Absence of competition seen as a greater danger than illegal file-sharing

In the annual MIPCOM event held in Cannes on Monday, Miramax’s CEO – Mike Lang – said that piracy has become less of an issue for the movie industry and that the real problem is the monopoly set by companies like Apple when it comes to the distribution of digital goods.

Pcworld brings to attention reports from Rapid TVNews and Music Ally pointing out that Mr. Lang also highlighted an important fact – while many are afraid that digital distribution can facilitate piracy, the real problem is lack of choice for the consumer.

“Piracy really is not the bigger issue for our company or for our library,” he said. “It’s been lack of exploitation, just not getting it out there.”

Lang’s experience in the field was not in vain as he realised that the more sources of legitimate content the less piracy. By the time the music industry finally understood this it was already too late because Apple had already set a distribution monopoly and thus putting an end to competitive marketing.

Lang also sets a warning to the movie industry:

“As the movie business we have to be very cognizant of that,”

“That’s why we did our deal with Netflix, and why we also did our deal with Hulu. We want multiple players to be successful.”

“It’s really important as an industry that we try to allow multiple players in markets around the world,” he added.

The deal he’s speaking of is a huge step towards the future taken by Miramax as they signed with Netflix in May a contract which allows the latter to stream “several hundred” movies released by Miramax, including Pulp Fiction, Good Will Hunting and Kill Bill.

Furthermore, Miramax decided to also shake hands with Hulu, allowing them to show movies without commercials on Hulu Plus, and to rotate 15 movies per month with commercials on Hulu.com.

Hopefully, this will set a fortunate precedent in the streaming business.

Hotfile Counterattacks

A recent event has turned the table with the popular file-sharing website Hotfile suing the mighty Holywood studio Warner Bros. for allegedly abusing its anti-piracy tool.

Hotfile have been recently accused by Hollywood studios for copyright infringement. The website (hosted somewhere in Florida) also filed a suit against Warner Bros. for abuse, fraud and claimed that the movie studio has misused the anti-piracy tool that Hotfile had created for the studio.

Warner Bros. seemed to have downloaded files that did not belong to them, including open source software and game demos, according to Hotfile’s statement; moreover, they continued the illegal downloads after being asked by Hotfile to stop.

“Not only has Warner (along with four other major motion picture studios) filed this unfounded and contrived litigation against Hotfile employing overly aggressive tactics, Warner has made repeated, reckless and irresponsible misrepresentations to Hotfile falsely claiming to own copyrights in material from Hotfile.com” Hotfile’s complaint reads.

“Worse, Warner continued to make these misrepresentations even after Hotfile explicitly brought this rampant abuse to Warner’s attention, ruling out any possibility that its wrongful actions were accidental or unknowing,”