Executive Summary
The modern film industry contributes significantly to the GDP growth of countries like United States, China, Japan, and India. This industry also employs tens of thousands of people worldwide. Despite the growing popularity of the film industry, film piracy (particularly the web-based film piracy) poses potential threats to the future growth this industry. The widespread use of internet worldwide increases the industry’s vulnerability to piracy issues because any person can upload/share videos on the internet from any part of the globe. It is not practical to prevent people from downloading/watching pirated movies on the internet due to the huge size of internet user population (Bilton, 2012). The objective of this report is to analyse the film industry on the grounds of piracy issues and to develop strategies for protecting intellectual property rights. In this report, film piracy is recognized as a serious issue affecting the film industry as a whole.
Background / Context
The film industry, sometimes referred to as motion picture industry, encompasses a large number of technological and commercial institutions related to filmmaking, such as film production companies, film studios, screenwriting, cinematography, distribution, film festivals, actors, and other film crew personnel (Statistic brain, n.d.). Considering the huge expenses involved in making movies, directors and the film crew tended to promote the film production under the standing production companies in the past. However, the advancements in film production technologies and the availability of affordable film making equipments now allow even independent film producers to finance the making of movies. In addition, the emerging opportunities to raise investment capital from outside the film industry also enhance the evolution of independent film production.
The modern film industry is led by the US film industry commonly known as Hollywood. While analysing the modern film industry, it seems that US, China, and Japan are the three largest markets in terms of box office whereas US, India, and Nigeria are the countries with largest number of film productions (UNESCO Institute for Statistics, 2012). The movie production is also led by other countries including UK, Hong Kong, Pakistan, France, Germany, Italy, and Spain. In terms of the film industry growth and increase in the number of screens, United States and India are the top two performers. Today many film production companies like to film movies outside their home countries in order to take advantages of labour and infrastructure costs. For instance, many Hollywood movies are filmed in Canada whereas many Indian movies are produced in outside countries like US, UK, Canada, Australia, or European countries. Hollywood, the primary hub of the US film industry, is the oldest established film industry in the world with facilities such as American Film Institute. However, India is the world’s largest producer of films with a total of 2,961 films produced on celluloid in 2009 (Shri, 2014, p.151). The following table shows the details of box office revenues of 10 leading countries in the global film industry for the year 2014.
(Source: MPAA, 2014)
Nature of the Problem
With the advancements in technology, today HD versions of the movies are available on the internet even before their release date. To illustrate, a high quality copy of ‘The Expendables 3’, the third entry in Sylvester Stallone’s action movie series, hit torrent-sharing sites nearly three weeks prior to the film’s theatrical debut. As Spangler (2014) reports, the movie became available on 23rd July 2014 and it was illegally downloaded 5.12 million times as of 17th August 2014, making the movie No. 4 in pirated movie downloads “after Captain America: The Winter Soldier (7.31 million), Divergent (6.29 million), and The Amazing Spider-Man 2 (5.88 million). The Expendables 3 collected only $16.2 million in its opening weekend; this figure was approximately $10 million below expectations and well below the returns garnered from the first two parts of the series (Ibid). According to a recent study conducted by Carnegie Mellon University researchers (as cited in Keating, 2014), films that fall victim to pre-release piracy can generate only 19% lower box office revenue than those pirated after release. Even the die-hard fans waiting for the release of a superstar film may be tempted to watch it when there is a pirated copy is available on the internet prior to the film’s release date. Hence, film piracy is a broader issue facing the industry in total.
Analysis of the Problem
It is clearly identified that film piracy is a serious issue that poses a set of potential threats to scope of the film industry. The immense popularity of internet makes it difficult for the film industry to prevent the web-based film piracy successfully. As discussed already, it is not practical to prevent people from downloading/watching pirated contents available on the internet or to charge crime against all those offenders. In addition, it may not be possible to ban all free file sharing websites like Torrent because internet is a worldwide web service and different countries have distinct internet policies. Even though one or two countries ban those file sharing communities, people in other countries will be still able to access those websites. The wide popularity of social networking sites like Facebook, Twitter, YouTube, and WhatsApp increases the viewership of pirated movies uploaded on the internet. When an individual shares a pirated movie with his friend through WhatsApp or Facebook, the person at the receiving end may not be blamed for film piracy from a common perspective because he watches/downloads it being unaware of the fact that it is a pirated copy. In this circumstance, it is better for the film industry to prevent the uploading of pirated movie contents on the internet rather than trying to put a check on its sharing. Researchers indicate that although a pirated movie is watched/downloaded/shared by millions of people, only a few people may be responsible for uploading it on the internet. Hence, the issue of film piracy can be addressed successfully if the authorities concerned are able to identify and punish those uploaders. Giving Equal importance, the film producers and distributors should focus particularly on the protection and security of the original movie prints to avoid pre-release piracy and the resulting huge financial losses.
In order to effectively prevent the uploading of pirated movies on the internet, the film industry should take a number of steps. First, the film industry may rely on the technological advancements to make it impossible for the illegal uploaders to upload copyrighted movies on the internet. Currently, there are many companies providing technical assistance to the entertainment and media industry. The Paris-based Thomson Content Security in Burbank has already developed a method to address piracy threats from the convert camcorder users. “The company’s technique involves inserting “artifacts” – extra frames, flashes of light, or pixelated grid patterns – into a movie during its digital-processing phase, before it’s shipped to theatres” (Greene, 2006). The objective of this technology is to eliminate the possibility of a camcorder recording without diminishing the quality of images the moviegoers see. An image is received by a human brain and a camcorder in different ways and the Thomson’s technology exploits this difference to prevent the unauthorized copying and reproduction of movies (Ibid). Second, film producers and the crew members should well informed of the contents recently uploaded on leading video sharing communities like YouTube and Torrent so that they can inform the authorities concerned once there is a violation of the country’s anti-piracy policy. For instance, YouTube may not remove pirated movies from its database unless there is a request from the original copyright holder (Electronic Frontier Foundation, n.d.). Although the YouTube’s automated system scans the contents uploaded on this website to verify their legality, it is often difficult to detect copyright protected videos/films. However, the YouTube will remove copyright protected videos from its database if the copyright holder requests to do so. However, it is important for the copyright holders to be informed of the matter as soon as their movies are uploaded on the YouTube so as to prevent its subsequent downloading/sharing. The real problem is that a pirated movie uploaded on the internet may be downloaded by tens of thousands of people within hours.
Current Position
While analysing the current strategy of the film industry for addressing the issue of film piracy, it seems that the industry depends greatly on the law system to abolish this threat. Developed countries like United States have strict laws in force to protect the intellectual property rights of copyright holders. According to the American Intellectual Property Law Association (n.d.), copyright protection is given for works like movies, music, books, and computer programmes to promote the growth of science and arts in the country. No person other than the copyright holder is permitted to reproduce or distribute the copyrighted work to the public (Ibid). As Bagley and Dauchy (2008, p. 89), point out, the most fascinating feature of a protected intellectual property is that the owner may use it exclusively when the third parties cannot use this property lawfully without the creator’s authorization.
The Motion Picture Association of America (MPAA) also works to protect the film industry from piracy threats (Wasko et al, 2011, p.na). The MPAA closely works with the Federal government to support the anti-piracy initiatives of the country and to boost the growth of the film market. Although this strategy assists the Hollywood film industry to eliminate the issue of film piracy to some extent, this policy still fails to prevent the uploading of pirated movies on the internet completely. This strategy would be successful only if the Federal government takes strict actions against people who upload pirated versions of movies on the internet.
The recent news from the Indian film sector indicates that the industry is planning to abolish piracy by stopping new film releases for three months. India’s Tamil Film Producer’s Council (TFPC) recently announced its plan to stop releasing movies entirely for three months on the belief that this approach is going to put a check on the issue of film piracy (Business Standard, 2015). The logic of this policy is that when there is a lack of newly released movies to pirate, the issue of film piracy will automatically end forever. Kalaipuli S Thanu, the president of TFPC, argues that when they stop releasing films for a specific period, the movie pirates will have nothing to pirate and eventually they will go out of the business (techdirt, n.d.). While evaluating the feasibility of this policy, it is clear that this practice would worsen the growth of the Indian film industry which is already struggling from web-based piracy. When new film releases are stopped for three months, the audience may turn to films available on the internet and consequently even the moviegoers may begin watching movies online. In short, the film industry’s current strategies for addressing web-based film piracy are not likely to generate positive outcomes in the future.
Alternative Approaches
As mentioned already, the film industry may rely on advanced technologies to create movie files in a format that does not support unauthorised copying or uploading of the movie. If the industry is able to develop such a technology with the help of outside experts, the issue of film piracy can be successfully eliminated. Although this technology may cost the film industry some additional millions of dollars, still the industry can benefit from this approach as it would significantly cut down piracy-related losses. Hence, it would be better for the film industry to invest more in R&D to develop a viable technology that can effectively prevent film piracy.
Similarly, the film industry may follow a psychological approach to influence the audience and to request them to stop watching/downloading pirated movies. To explain, the film crew may create a short video clip in which a few of the team members tell the audience how the film piracy affected their life, and show it in the movie theatre before the start of the film (Edwards, 2012). A few words from influential public figures such as politicians, soccer players, athletes, or pop singers discouraging film piracy may be also included in the video. Such a video clip can pass a strong emotional message to the audience against film piracy and it may persuade offenders to abstain from piracy activities.
On a comparison with the existing strategies, these alternative measures seem to be more effective in protecting the rights of intellectual property holders. The proposed alternative measures may bring a permanent solution to film piracy and enhance the growth of the film market. It is possible to practice the newly suggested strategies in collaboration with the current strategies in a sensible way to attain more improved outcomes. When the film industry follows different approaches to ‘kill film piracy’, it is vital to make sure that those attempts do not hurt the interests of the overall audience.
Conclusions / Recommendations
References
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