New Technology
New technology which had been beneficial to enhancement of the motion picture industry has also taken a bite of its profits, International pirating of feature films. Following the countries first ever raid on a BitTorrent site in 2009. Russian authorities have now begun a criminal investigation into the operators of Interfilm.ru. Run by a married couple, the site is now at the center of a copyright infringement claim of a staggering $1.25 billion. It had been suggest that the investigation has also identified some of the site’s top users.
White House Combat
A week later the White House released a plan to combat copyright theft and launched its own investigation into piracy. Targeted were those responsible for running sites that offer television shows and films available for download. Websites such as filespump.com, tvshack.net, ninjavideoes.net and now-movies.com all offered “Iron Man 2“,” Sex in the City“, “A Team“, and “Avatar“. The sites have since been shut down and an official legal notice was posted on all of them alerting site users of the seizure. Agents from the Homeland Security Investigation also seized assets from bank accounts, paypal accounts, investment and advertising accounts. Through this investigation agents also executed four residential search warrants in several states for other online ventures intending to distribute film and television illegally. The website Movielinks alone attracted 3.3 million viewers in one month with over 37,000 having watched “Sex in the City” in just one single day. With the cost of a ticket in Los Angeles, California averaging $12.00 each day the industry suffered a loss of $444,000.00.
Ninja & Piracy
Ninja Video offered “ Iron Man 2“, two days before it was released in theaters. More than 200 movies and 300 television shows were found on that web site. The two sites combined for more than 6.7 million visitors in the month of May, 2010. It may seem likely that these are leaked by studio employees but that is not that case. The films are recorded in theaters or obtained by other sources and then posted online within just an hour or so of their actually theater release. Hollywood has turned to the government for help in waging a war against piracy. This has become even more prevalent in recent years because of the high speed internet connections. The availability of mobile devices now provide the technology to video record in high definition and upload to the internet through a cellular phone. The content and ability of theft online has become increasingly vast due to the improvements of technology, software and the access to the internet. This technology and the theft of film and television has led to lost revenues in the studios. The impact in the amount of revenue studios can collect from DVD sales has been greatly reduced by such theft resulting in forced layoffs and job cuts. With an estimated 2.4 million people working in entertainment and production of these films accounts for an estimated $80 billion dollars each year filtering to the economy in the United States. Online piracy has made it so much more difficult for studios to generate any income from their digital divisions. Paramount Pictures has confronted these piracy issues as over 16 million people have attempted to illegally download “Transformers” since the films’ release. Although Paramount distributes its material to 200 online platforms the attempts at piracy are staggering. Commercializing downloads often causes confusion on which downloads are legitimate and which downloads are illegal. About seventy percent of a films total revenue and fifty percent of revenues from television are generated in the secondary markets.
Changes In Film
With no laws in place to punish individual downloaders the only recourse the industry has is to identify and prosecute the web sites that supply and offer the pirated material. This crime of online piracy will continue. This affects the studios greatly by lost revenues and inaccurate ratings. Determining the loss of revenue for taxation purposes in difficult to calculate. Do you file a loss on downloaded or pirated material? How do you accurately report how many units were downloaded or shared? Will the IRS accept the losses and how will they be categorized?
This is a new age of film and television theft that is yet to be completely understood. It will take several years for the government program known as ICE to counter act the piracy. They have begun the crackdown on these criminals and the entertainment industry looks forward to the future and how they plan to eliminate and prosecute this crime.
The Hurt Locker
The war against movie piracy is exploding. Producers of the Oscar-winning "The Hurt Locker" are preparing a massive lawsuit against thousands of individuals who pirated the film online. Voltage Pictures, the banner behind the best picture winner, has signed up with the U.S. Copyright Group, the Washington D.C.-based venture that has initiated this litigation campaign targeting tens of thousands of BitTorrent users.
Cyber Crimes
According to Thomas Dunlap, a lawyer at the firm, the multi-million dollar copyright infringement lawsuit will be filed before the end of 2010. He declines to say exactly how many individuals will be targeted, but expects the number to be in the tens of thousands, if not more. "Locker" first leaked onto the web more than five months before its U.S. release. The film was considered a hot item in P2P circles after it won six Oscars in March. Despite the accolades, the film grossed only $16 million in the United States.
"Locker" litigation could shake things up, and force ISPs ( Internet Service Providers) to match IP addresses with illicit behavior on BitTorrent. After unmasking individuals who have illegally downloaded films, the U.S. Copyright Group then sends a settlement offer.
