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Internet File-sharing, Illegal Movie Downloads and In-Theatre Camcording Continue to Plague Film Producers
Hollywood and the Digital Media Industry Turns to Technology to Help Reduce Global Movie Piracy
May 2007
Ann-Marie Fleming, www.DigitalMediaStocks.com
Over the past few years movie piracy has cost the film industry billions of dollars, with 2005 alone estimated at over $18 billion globally. These costs have made resolving this problem a key priority for many major Hollywood studios and industry participants who have seen the piracy problem taking a bigger and bigger share of their box office returns.
According to Elizabeth Kaltman, Communications Director, Motion Picture Association of America, Inc. “There are a number of factors that have led to the proliferation of film piracy in the U.S. and abroad. Improved technologies that enable faster downloads and file-sharing, combined with increased broadband width, enhanced infrastructure and accessibility have enabled millions more users to engage in on-line movie theft.”
In-theatre pirated recordings represent the largest percentage of film fraud. Kaltman explains, “Camcorders are at the top of the piracy pyramid supplying 90% of newly released movies that end up on the Internet and on the streets. These recordings are duplicated and sold on the black market and loaded onto the Internet triggering an avalanche of millions of illegal downloads. Because of these camcords, newly released films appear in street markets around the world and on the Internet just days after their domestic theatrical release.”
Helping Hollywood to better protect their content is USA Video Interactive Corp. (OTCBB: USVO; TSX: US.V; BSE/Frankfurt: USF), developer of anti-piracy products surrounding digital watermarking technology. The Company is currently working with a major Hollywood studio, recently delivering the first installment of its MediaEscort™ product specific for protecting content distributed over the Internet through the seamless embedding of SmartMarks.
For some regions around the world the lack of strict and prohibitive legislation has added fuel to the piracy fire. Canada in particular has been under the microscope as this area has become a major source for movie piracy and a thorn in Hollywood’s side. Warner Bros. Entertainment recently cancelled promotional public screenings in Canada in an attempt to minimize the number of illegal copies being made from this region and according to a company spokesperson, will likely continue this trend throughout the summer for several of their blockbuster titles.
A major reason for many of Canada’s problems stems from the lack of adequate anti-piracy legislation. Mr. Serve Corriveau, Vice President, Anti-Copyright, Canadian Motion Picture Distributors Association describes, “In Canada, one of the things that we are trying to achieve is to get the government to pass a criminal law prohibiting camcording because currently there is no law against this. The only tool we have in place is the Copyright Act, but under this you need to prove that the person is recording the movie for the purpose of distribution which makes it a lot more difficult. Most violators when caught state that the copy is for their own personal use leaving the theatres with little recourse other than to kick them out.”
While movie piracy may never be fully eliminated, innovative technology has created valuable opportunities for reducing the problem.
“We are trying to find a technology that will help detect these violators in the theatres or find something that would make it either impossible to camcord or if recording was possible that the quality would be poor enough to be a deterrent. In Canada you need to also make sure that the technology that is implemented is cost effective,” states Corriveau.
Mr. Patrick Gregston, Business Development for USA Video Interactive Corp. explains, “The technologies that make piracy relatively easy are also technologies that enable a wealth of new opportunities. Over the last year, the leadership is starting to focus on those opportunities more. Lost opportunity costs are now starting to figure into the gut check decisions about which areas to explore. In every area, I would expect that every kind of security is going to be applied. Watermarking is a relatively low cost, low resistance security function compared to the complex systems that go with rights management and encryption, the other leading approaches. It also enables enforcement, which is an area that also has a lot of development potential.”
In the U.S., the MPAA and its member companies are also actively seeking solutions on a variety of fronts that includes educating people about piracy and its consequences, working through governments and courts to strengthen copyright laws, taking action against Internet thieves, working with law enforcement authorities around the world to root out pirate operations and working to ensure movies are available legally using emerging technologies.
A key component in the fight against piracy according to MPAA’s Elizabeth Kaltman is ensuring that consumers are able to get movies hassle free at a reasonable cost. “Studios are adopting new business models allowing them to get product to people using new technologies that allow consumers to see movies when and how they want,” states Kaltman.
USVO’s Patrick Gregston explains a similar approach taken by the anti-piracy technology developer that puts the consumer first in terms of movie experience, while at the same time helping studios and distributors to protect their content. USA Video’s unique SmartMarks in motion pictures make it possible to enforce the license violations that occur. As Gregston explains, “This enables transactions, does nothing to complicate usage or inhibit people from doing what they have always done and had the rights to do. Should an individual choose to violate that license, SmartMarks make it possible to provide proof that the content is not licensed for that use, and are accepted by western courts as such.”
According to the MPAA, they are currently engaged in a study that is evaluating audio and video fingerprinting technologies that will help to advance the safe distribution of their member's content over the Internet. They are also working with online distributors to employ filtering technologies to prevent infringing material from being posted on their sites. Such technologies enable content distributors to keep their networks free of infringing materials.
Ann-Marie Fleming
Ann-Marie Fleming completed her MBA in the United States, where she attended Webster University. She also holds an Honors B.A from the University of Toronto. She has over sixteen years of experience within the financial industry to include retail banking and brokerage, investment banking, and mortgage brokerage within the United States and Canada, with a firm background in corporate research.
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