media.Hustle

Film piracy is a form of copyright infringement in which private persons or groups of people unlawfully reproduce intellectual property. The penalties a pirate may face range from minor fees to astronomical ones – and are usually settled in private lawsuits, or outside of court. Despite this risk, overpricing of DVDs and movie tickets has caused film piracy to become an economically feasible alternative.

Until recently, widespread film piracy was difficult due to large file formats and improper media. Before the inception of DVDs into mainstream culture, VHS tapes were the standard format, and conversion from tape to digital was both time consuming and difficult. With DVDs came a digital format, leaving the main problem with transferring the media. Now that broadband has become just as important as having a computer, this gap has been bridged, making it possible to download 700 MB in a few hours, or even 20 GB in a couple of days.

Pirating a DVD to a computer requires a few extra steps than simply popping the disc into the drive and telling your computer to copy the information. Most of the time, the distribution company includes some sort of anti-theft software that looks for suspicious activity and stops it upon detection. Due to this, ripping a DVD image to a computer requires special software, and can take hours, as the computer literally has to rerecord every second of the actual film.

There are several different formats used when ripping a DVD to a computer. The difference in formats arise in compression, the file size of the ripped movie, and the quality of the resulting ripped film. DivX and XviD are two of the most common, the result turning a 4.7GB DVD into a convenient ~700MB file that can be burned onto a CD.i The result is an easily transferable, but slightly reduced quality video. MPEG, or MPEG-4 is a video format used for general purpose computer video, and is used to create Video CDS (VCDS) or Super-VCDs (SVCDS), these formats result in burnable CDs that can usually be played in a standard DVD player.ii There are other, lesser used formats, however their reduced quality and proprietary nature have prevented them from taking off.iii

With the help of broadband, it is also fairly easy to find full 4.7GB DVD images which can be burned onto writable DVDs, completely maintaining the quality of the original picture. The internet has seen many peer to peer (p2p) networks come and go. A p2p network is a form of decentralized tracking and organization of files, this allows for relative anonymity when sharing copyrighted material, and creates a system which is very difficult to shut down, due to not having any main server which hosts files.iv The original form of p2p came as the now infamous program, Napster.

Created in 1999, Napster laid the framework from which many other p2p networks have emerged.v Napster suffered from legal troubles that allowed it to maintain a free p2p network for a limited time, eventually turning into a pay service. Napster was the first of it’s kind, and the first anyone heard of the RIAA and their penchant for lawsuits.vi BitTorrent allows for files to be broken up into separate pieces on the fly, and these separate pieces can be hosted and downloaded by anyone connected to a tracker.vii The benefit of this is many people can simultaneously upload or download different pieces, and no one person incurs the entire uploading cost, saving bandwidth for everyone involved. Any particular file is broken into 64kb – 1Mb chunks, and the pieces are reassembled once they have all been downloaded .viii In order to use BitTorrent, a person must first find a client – there are many different kinds with separate features, but they accomplish the same thing.

The hardest part to downloading via BitTorrent is finding the correct torrent to download from. Sites like TorrentSpy.com serve as torrent search engines, usually hosted in countries that have limited laws against copy protection, these sites are able to operate somewhat above the law, providing torrents for anyone.ix Other p2p networks include KaZaA, Limewire, and eMule, among many others. These networks also use decentralized hosting for files, however users must host entire files on their computer, slowing transfer speeds.x Some networks, such as Napster and OpenNap use peer-to-server connections for things like searching, allowing for usage to be monitored. Gnutella and Freenet use peer-to-peer connections for everything, and are seen as true p2p networks.xi

An assessment of film piracy would be incomplete without recognizing piracy’s effect on the industry itself. The MPAA has called piracy a “growing global epidemic,” citing statistics that 24 percent of respondents in a survey of 3600 internet users in eight different countries had downloaded a movie.xii The same survey says that movie piracy is on the rise, 17 percent who have not yet downloaded movies intend to start in the next year, and 58 percent of those downloading expect they will continue to do this. In July, 2004 The MPAA has estimated an industry loss of $3 billion annually due to piracy.xiii The MPAA has put forth a lot of information on the effects of piracy on their homepage, mpaa.org.

Film piracy affects several things that many people may not even consider. The economy is one important factor, Core Copyright industries are responsible for about 6% of the United States’s Gross Domestic Product (GDP), this totals to about $626 billion a year.xiv Not only is the United States affected, however, as last year the worldwide motion picture industry lost a total of $18.2 billion to piracy. This includes losses from China, France and Mexico.xv According to the MPAA, “… it’s not just the wealthiest people involved in movies that are hurt.”xvi Many people are involved in the production of a film, and according to the MPAA, pirates hurt the crew of a film just as much as the producers.xvii

Not much evidence is provided to support this, however, and in reality most crew members have been paid in full by the time a film is past the post-production or even production stages. Of course in the end, piracy really comes back to hurt the consumer. Film making is an expensive endeavor, and produces a very valuable commodity. By reducing the actual return made on films, overall quality and craftsmanship could falter.xviii

In his 2004 article, “Movie piracy on peer-to-peer networks—the case of KaZaA,” Marc Fetscherin provides evidence that p2p piracy may not be as much of a problem as the MPAA claims.xix Fetscherin says that due to the lack of video quality provided on the network KaZaA, p2p file sharing could help the market, by spreading the product and creating a positive voice that could potentially ensure a future sale.xx The MPAA has launched several efforts to educate students on the effects of online piracy. With the message “stealing is bad,” they have teamed up with Junior Achievement to create a class for 5th through 9th graders on the history of copyright law and it’s detrimental effects.xxi

The MPAA has also started an advertising campaign with the theme “Movies. They’re Worth It.” This campaign profiles the crew of films, such as set painters and makeup artists, and explains how film piracy takes money directly out of their pockets.xxii In March, 2006, a study run by the MPAA estimated losses due to film piracy which came out to be $6.1 billion, 75 – 100% more than the originally projected estimate.xxiii The majority of the theft, about $4.8 billion, originates from China, Russia and Mexico, and shows that the majority of downloading in the United States is done by college students.xxiv

In a recent study conducted by AT&T Experimental Labs and the University of Pennsylvania, the actual pirates are not private viewers, but industry insiders who leaked the film during the production or distribution.xxv One computer security expert, Bruce Schneier, in an article referencing this occurrence, comments that “In most areas of computer security, insiders are much more damaging than hackers,” he goes on to say “Also, in most areas of computer security, insider threats are ignored while people focus on hackers.”xxvi Indeed, it seems as if the greatest threat to Hollywood is the industry itself, yet their ads continue to be marketed to outsiders. In an interesting turn of events, one blogger has even commented that film anti-piracy ads make film piracy out to be “totally badass.”xxvii

The bright coloring and in your face message from this brochure turns out to be more of a parody of itself than any actual use. One caption on the brochure threatens that your family’s financial information may be available on a peer-to-peer network, however the image above exemplifying this is pointing to an .mp3 – a format used to transfer music, not film or financial documents. There is no actual movie piracy going on in this brochure, the only two visual examples point to music copying, and at first glance one might mistake this as being from the RIAA.xxviii

In March of 2001, Loews Cineplex in Manhattan increased the price of movie ticket sales from $9.50 to $10.00, becoming the first theater to reach the $10 mark.xxix Since then, many other theaters have followed their lead, and $10 has nearly become the standard price for tickets. New York City Council Speaker, Peter Vallone called this initial increase a “mugging of our middle class.” xxx Alternatively, from experience as a Hollywood Video employee, the author can say that new DVDs never cost less than $20, and those with special features or simply decorative boxes can reach as high as $30. While certainly not as expensive as some things, people who would like to develop a varietal film collection are hard pressed to do so without spending hundreds of dollars.

As with some things, one might hope that over time a DVD’s price would fall. This is untrue, while you can find a widescreen edition of War of the Worlds (2005) for a mere $9.99, it is completely stripped, and does not take any advantage of one of DVD’s best faculties, special features.xxxi If you’d like to buy War of the Worlds with special features included, that’ll cost you a whopping $34.99.xxxii For anyone with a less than stellar income, being a film connoisseur seems a certain path to bankruptcy. In the study run by the MPAA, film piracy in various countries is clearly tied to economic reasons.xxxiii

The MPAA has not changed their business model to accommodate piracy, however, they have followed in the RIAA’s footsteps and has begun suing anyone they can catch. Over 200 indviduals were sued by 2004, including one company, MasterSurf Inc. MasterSurf ran a website, Movie88.com that harbored illegal trafficking of films, the MPAA won the lawsuit and earned $23.5 million.xxxiv The battle seems to be in the favor of the pirates, as even with lawsuits the return on their losses is negligible.

In April of 2004, Russell Sprague pleaded guilty to one count of copyright infringement.xxxv He faced three years in prison for illegally films such Kill Bill: Vol 1 and Seabiscuit, among others.xxxvi Sprague was caught copying and selling DVDs from his home in Illinois. Sprague was being sent screeners by a Hollywood insider, duplicating the materials and then returning the screeners to the source, a Motion Picture Arts and Sciences member who admits to having sent Sprague over 60 screeners that year.xxxvii

Due to this court case, film studio representatives and independent film makers held a meeting to discuss piracy. The MPAA placed a ban on the use of screeners due to their likelihood of being involved in piracy, when independent film makers protested that screeners were the only way to get judges to see their work, the ban was partially lifted.xxxviii One tactic film makers have started using is known as Watermarking.xxxix By uniquely identifying particular screeners, authorities are able to trace the origination of a particular screener, which can lead to someone to prosecute.xl

A unique image constantly shows in the corner of a watermarked film, identifying it as a screener.xli The MPAA has also been fairly diligent in pushing legislation. In 2003 the Electronic Frontier Foundation (EFF), a technological rights group found themselves beaten to the punch regarding legislation that increases cable TV piracy laws, which the MPAA had been pushing since 2001.xlii

Fred von Lohmann, an attorney for the EFF has stated, “They’re pushing their agenda in places we haven’t even begun to look at.”xliii Authorities have yet to adopt the same attitude for catching pirates, most of the effort has not gone into catching widespread college downloading, but “bootleg factories” in China and the Philippines.xliv Much of the raiding and confiscation has occurred outside of the United States, but most notably in China, Malaysia, Taiwan and the Philippines, where optical disc piracy is very common.

The piracy rate in the Philippines is the highest in the world at 85%, however enforcement has done it’s part, making record confiscations of illegal optical disks and drives.xlv In another attempt to facilitate those who would rather download than purchase, the MPAA has launched a campaign in 2006 within Europe where users can download films at the same time as they are released for distribution on DVD.xlvi This program, called In2Movies, uses similar technology to p2p networks, except the formats are proprietary, limiting the usage of any media downloaded. xlvii

Through the success of In2Movies, other programs such as Vongo, and Apple’s iTunes movie store have been introduced, allowing for North American consumers to buy and download movies as they see fit. Proprietary formats, more commonly known as Digital Rights Management (DRM) are used by copyright owners to prevent reproduction of their material.xlviii Apple’s iTunes is a great example, their creation of FairPlay, which uses a modified MPEG-4 format to prevent downloaded music and video from being played in anything other than Apple products, both hardware and software.xlix These limitations are essentially easy to bypass, burning a CD and then ripping the material off of it being one of the simplest. Most methods involve owning an original license, however this does not stop anyone who has already purchased the music from spreading it around as they see fit.l

Jon Johansen was the first to circumvent the FairPlay technology, by re-encrypting data into a raw format, he was able to make a file which could be then reformatted to a more standard file type.li A project named PlayFair was made by an anonymous author from source code Johansen wrote. It is completely capable of removing DRM technology, and the RIAA has already sent two cease and desist letters to sites which made it available for download.lii The project still exists under different names, showing the internet community’s resolve to bypass any inherent copy-protection created. More so than ever, copiers are retaliating full force – new software has been released which drastically increases a user’s security. A program, PeerGuardian2, prevents corporations from finding the necessary logs to prove guilt or innocence in court. By blocking certain types of activity, users become relatively anonymous on the networks they connect to, and as a result are harder to indict.liii

Much of the software created and used to facilitate distribution of copyrighted material illegally is made by college students. As already stated, the majority of those in the United States who download illegal movies are college students.liv College students have clear access to technology, and may very well also have an extremely limited income. The demand for entertainment is high, and it is natural that a way to obtain entertainment for considerably less expense will become used. Fred Von Lohmann at the EFF has proposed that universities simply pay recording companies licensing fees, and “let the students do what they’re going to do anyway.”lv

In a recent turn of events the MPAA has actually started using college student filmmakers to create, for free, anti-piracy advertising. By hosting a film festival at which these would be premiered, student filmmakers are encourage to create propaganda-esque advertising which the MPAA plans to use for it’s own marketing.lvi Not everyone is of the opinion that movie piracy is hurting Hollywood. There are a few reasons why film piracy could be considered helpful. The most frequently used reason is that downloading a film allows for a consumer to test a product out before purchasing it, and doesn’t infringe on the actual product sold in stores because the film is presented in a raw format, with no special features.lvii

Another line of defense that argues that technological progress is dependent on aspects of piracy, such as how music piracy has spawned an entire line of hand held devices, mp3 players.lviii An anonymous student of John Sutherland, a university professor and article writer, comments on the effect of piracy, “far from destroying the film industry, movie downloading has made it raise its game, exploit its visual advantages, and lower its prices. There are multiplex, mammoth-screen, stadium-seating cinemas going up in every city center and mall. Box-office is at record levels.”lix

This is true, as while the MPAA has claimed to have taken a significant fall in profits due to piracy, new and improved theaters keep appearing. In a recent exploratory paper, p2pnet.net suggests that online piracy actually helps the growth of new technology and innovation in business.lx Piracy has caused revolutionary improvements in the area of file sharing, for legal or illegal uses.lxi Piracy has also shown to be useful for tracking emerging consumer interests, as pirates generally have access to media first, they act as the front lines for public opinion. “By researching the pirate communities, perceptive businesses were successful in identifying the needs that existing businesses were not adequately addressing.”lxii

Piracy has even contributed to new market creation, many original users of Napster have converted over to the legal version, or use iTunes.lxiii Piracy has also caused innovation in the arena of legal business models. New businesses have been formed that are able to make use of today’s technology, market insight and market creation by pirates. Online pirates themselves have been involved in the creation of these new legal businesses.lxiv In somewhat related news, Microsoft executive Jeff Raikes has said, “If they’re going to pirate somebody, we want it to be us rather than somebody else.”lxv

The reasoning behind this is that piracy has advantageously led to people purchasing Microsoft products that may otherwise have never had access.lxvi The movie industry might do well to consider this, as many people who pirate films receive exposure to movies that might not have happened without piracy. In an article first published in Time Magazine, Kaiser Kuo states that piracy in mainland China has culturally benefited the country, allowing unprecedented access to the West which has not been provided through regular channels.lxvii China is filled with street solicitors, offering cheap bootleg films to anyone who passes by. This has enabled the youth of China to experience Western culture, and has caused many developments.lxviii

Rock music spread through China entirely on bootleg cassettes in the 80’s and 90’s. CDs that have been cut and exported from the original producers receive an inch deep gash before being shipped over seas, from this they are called sawgash CDs. These discs sell in China for about $1 USD, whereas a regular purchase can cost as much as $18 USD.lxix Since the inception of the internet, we have seen many things come and go. New technology replaces technology less than a year old. Software is being written at all times all over the world, and it is being used for one thing, to give people what they want. This is the basis for the creation of organized crime, when legal society does not provide for members of the community in certain ways, they seek satisfaction elsewhere. The epitome of this is facilitated in America, where we are taught to take what we want, when we want it. This is why film piracy has come this far.

As stated and credited before, the majority of piracy in the United States is done by college students. College students are simultaneously the most connected and have the lowest income. It doesn’t matter how many people the RIAA or MPAA sue, or how much they increase security – until they lower their prices, or use piracy in a manner advantageous to their own goals, illegal copyright infringement is going to provide a viable method for people to download their entertainment.

Works Cited

i. http://www.realvalue.net/brian/piracy/movies.html
ii. Ibid.
iii. Ibid.
iv. http://en.wikipedia.org/wiki/Peer-to-peer
v. http://en.wikipedia.org/wiki/Napster
vi. Ibid.
vii. http://en.wikipedia.org/wiki/BitTorrent
viii. Ibid.
ix. http://www.torrentspy.com
x. http://en.wikipedia.org/wiki/Peer-to-peer
xi. Ibid.
xii. http://www.pcworld.com/article/id,116842-page,1/article.html
xiii. Ibid.
xiv. http://www.mpaa.org/piracy_Economies.asp
xv. Ibid.
xvi. http://www.mpaa.org/piracy_EntInd.asp
xvii. Ibid.
xviii. http://www.mpaa.org/piracy_Consumers.asp
xix. http://www.sciencedirect.com/science?_ob=ArticleURL&_udi=B6V1H-4D1YV1T-1&_user=56861&_coverDate=02%2F01%2F2005&_rdoc=1&_fmt=&_orig=search&_sort=d&view=c&_acct=C000059542&_version=1&_urlVersion=0&_userid=56861&md5=627a61f35b7ef404f3992099a3e83356
xx. Ibid.
xxi. http://www.nytimes.com/2003/09/25/business/media/25STUD.html?ex=1176264000&en=fa2674cb8894bf05&ei=5070
xxii. Ibid.
xxiii. http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2006/05/03/financial/f104130D40.DTL
xxiv. Ibid.
xxv. http://www.newscientist.com/article.ns?id=dn4166
xxvi. Ibid.
xxvii. http://www.gosleepgo.com/node/1982
xxviii. http://mpaa.org/MPAA_Poster_22×32_FINAL.pdf
xxix. http://www.indiewire.com/biz/biz_010302_briefs.html
xxx. Ibid.
xxxi. http://www.amazon.com/War-Worlds-Widescreen-Tom-Cruise/dp/B00005JNTI/ref=pd_bbs_sr_1/002-1180657-2081639?ie=UTF8&s=dvd&qid=1177111257&sr=8-1
xxxii. http://www.amazon.com/War-Worlds-Widescreen-Two-Disc-Special/dp/B000BD88YQ/ref=pd_bbs_sr_4/002-1180657-2081639?ie=UTF8&s=dvd&qid=1177111257&sr=8-4
xxxiii. http://news.bbc.co.uk/1/hi/technology/3879519.stm
xxxiv. http://news.xinhuanet.com/english/2004-11/25/content_2259752.htm
xxxv. http://news.bbc.co.uk/2/hi/entertainment/3621293.stm
xxxvi. Ibid.
xxxvii. http://chicago.about.com/cs/movies/a/012404_screener.htm
xxxviii. http://news.bbc.co.uk/2/hi/entertainment/3621293.stm
xxxix. http://en.wikipedia.org/wiki/Digital_watermarking
xl. Ibid.
xli. Ibid.
xlii. http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2003/04/28/BU269543.DTL
xliii. Ibid.
xliv. http://www.chico.mweb.co.za/art/2004/2004nov/041105-piracy.html
xlv. http://www.mpaa.org/inter_asia.asp
xlvi. http://www.iht.com/articles/2006/03/23/yourmoney/movies.php
xlvii. Ibid.
xlviii. http://en.wikipedia.org/wiki/Digital_Rights_Management
xlix. http://en.wikipedia.org/wiki/FairPlay
l. Ibid.
li. Ibid.
lii. Ibid.
liii. http://en.wikipedia.org/wiki/PeerGuardian
liv. http://news.com.com/2100-1025_3-6066118.html
lv. Ibid.
lvi. http://www.sife.org/united_states/sife_teams/team_messages/01_30_06.asp
lvii. http://www.chico.mweb.co.za/art/2004/2004nov/041105-piracy.html
lviii. Ibid.
lix. Ibid.
lx. http://www.p2pnet.net/story/9797
lxi. Ibid.
lxii. Ibid.
lxiii. Ibid.
lxiv. Ibid.
lxv. http://www.informationweek.com/story/showArticle.jhtml?articleID=198000211
lxvi. Ibid.
lxvii. http://www.danwei.org/intellectual_property/the_benefits_of_piracy_by_kais.php
lxviii. Ibid.
lxix. Ibid.