Net piracy presents paradox to entertainers
By Maria
Seminerio, ZDNN
August 1, 1999
2:43 PM PT
That will be issue du jour when
The studios claim intellectual property theft costs them billions of dollars
each year, though they admit the majority of the losses come from illegal videotaping of
first-run movies and underground sales of those videotapes. However, Internet distribution
of pirated films is becoming an increasing problem, the studios say, with Web sites such
as Dupecheck offering detailed lists of the
purloined material that is available online.
But behind the piracy brouhaha is the sense among some entertainment industry
watchers that a little Net buzz -- even if it comes in the form of an entire first-run
film being swiped and shown online -- is actually a good thing.
As the annual Herring on
Hollywood conference kicks off today, the question of who has control over content is
taking center stage. A panel of executives from companies including Idealab Capital
Partners, EMI Recorded Music, Columbia TriStar, IBM Corp. (NYSE:IBM) and
Warner Bros. is scheduled to take on that topic, among many others facing what some now
see as the "converged" field of digital technology and entertainment.
Net leaks: A marketing tool?
"The fact is, it's a marketing tool" when advance copies of new films
get leaked on the Internet, even if the film is leaked in its entirety, said Aram
Sinnreich, an analyst in the consumer content group at Jupiter Communications in New York
City.
In the case of one new film, independent Artisan Entertainment's The Blair Witch
Project, Internet buzz has been almost solely responsible for driving moviegoers into the
theaters, Artisan officials have said. That film, in its opening weekend, grossed $1.5
million despite being shown on only 27 screens in the U.S. It boasts no name stars and
television advertisements have been few.
Ironically, given the role the Internet has had in the low-budget film's box
office success, it too is said to be available in its entirety online.
Pointing to the Star Wars Episode I: The Phantom Menace example, Sinnreich
maintained that although its producer, Lucasfilm, is fretting about the film being
available in fuzzy pirated copies online, comparatively few people are likely to sit
through the entire movie on their PC. And of that group, many are likely to go to the
theater and pay to see it anyway, he said. (The movie's box office take thus far is a
highly-impressive $400 million.)
But Lucasfilm doesn't see it that way.
"The availability of first-run films on the Internet shows that the threat
to the motion picture industry of digital piracy is real," said David Anderman,
associate director of business affairs at Lucasfilm, in a statement. "Films such as
Star Wars are meant to be seen for the first time in theaters."
Calling in the Feds
The company is working with the Department of Justice to track down digital
pirates "in much the same way that the sources of computer viruses are tracked
down," Anderman said.
Universal Studios, too, has cracked down on would-be pirates, even threatening
last month to sue Web sites that offer links to other sites hosting apparently-pirated
trailers from its movies.
There are no hard numbers on the number of pirated copies of the Star Wars film
in circulation, or indeed of the other new films apparently available online, such as Eyes
Wide Shut and The Blair Witch Project, according to Jupiter and other research firms.
Common sense suggests that the poor video and audio quality of most of the
copies, combined with the low bandwidth endured by most home users, would make downloading
and watching a whole film online an unpalatable experience, Jupiter's Sinnreich said.
(Although the advent of widespread broadband could change this picture somewhat, making
digital piracy a bigger kick in the wallet than it is now, Sinnreich and other observers
said.)
There's anecdotal evidence to suggest that the consumer pirates who defeat
digital copyright protections in products such as online games often return as paying
customers, said Deirdre Polson, vice president of marketing at Shockwave.com in San
Francisco.
"I think it's definitely overblown," Polson said of the piracy threat.
Shockwave.com, an operating unit of software maker Macromedia, is debuting today a new Web
site and related multimedia players that enable users to play games and listen to music,
both online and offline. One player is free, while the other, premium player costs $19.95.
The quantity of copyrighted material available on the new site is immense, but
embedded software controls guard against piracy, she said. Although she acknowledged that
truly dedicated would-be pirates will probably manage to defeat the controls,
Shockwave.com doesn't see this as an automatic liability, Polson said.
"If people manage to get past us and get something for free and they like
it, they're likely to come back" and pay the next time, she said.
Getting something for nothing
Entertainment companies are learning to use the Web's unique attributes to offer
certain copyrighted commodities for free -- which would never have been done years ago --
while earning revenue from side deals, said Alan Ellman, president of ScreamingMedia,
which distributes syndicated news and entertainment content to Web sites.
ScreamingMedia, based in New York, last week announced a partnership with online
video provider FasTV.com to offer related news content along with FasTV.com's video clips
from sources such as New Line Cinema and the American Film Institute.
The deal is a perfect example of how Web firms and entertainment companies,
working together, can provide a mix of free and paid services, earning revenue while
getting a marketing boost from the free offerings, Ellman said. "We're not
cannibalizing the market" for the movies shown in clips on FasTV.com, but rather
"enticing people to go to the theater," he said.
This is certainly true for movie previews, which the studios make available
online "to feed the fans' hunger for the material" in the hopes of drawing them
in to buy tickets, T-shirts, and other items, said Don Buckley, senior vice president of
theatrical marketing and new media at Warner Bros.
"We don't support the illicit dissemination of information that's not
licensed for Net use, but trailers are another matter. It's obviously in our interest for
the trailers to get out there, as long as all the rights are cleared," Buckley said.
To this end, Warner Bros. on Saturday became the first studio to offer a sneak
preview of an animated feature before its release in theaters. A 10-minute clip from the
new animated movie "The Iron Giant" (www.theirongiant.com)
was shown late Saturday on the film's Web site. It opens in theaters in Los Angeles and
New York on Wednesday, and nationally on Friday.
While acknowledging that there is some inherent value in Internet buzz, one
expert said the entertainment industry has an important principle to uphold in fighting
piracy.
"The industry puts the money up front to produce these films, so this is
stolen revenue whether somebody sells a pirated videotape or shows it online," said
Nick DeMartino, director of strategic planning at the American
Film Institute.
"George Lucas (noted producer and head of Lucasfilm) doesn't need the
money, but the principle is still the same," DeMartino said.
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