The Future Of Film: The War On Piracy Will End

Where Hollywood goes from here...

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Pop quiz. Can you name Fast & Furious 6's main adversary? If your answer is Owen Shaw, Ian Shaw or any other member of the extended Shaw family, hand in the keys to your Dodge Charger and head to the back of the car park. The correct answer is Philip Danks, a 25 year-old from Wolverhampton sentenced to 33 months in prison last month for pirating the movie and uploading it to the internet. A dawn raid involving enough police cars to put the fear of god into Dominic Toretto himself traced the man identified as ‘TheCod3r' to his home, where he was arrested, tried and later sent down to whatever the Midlands equivalent of Lompoc is.

To many, the sentence seemed harsh. The direct involvement of FACT (The Federation Against Copyright Theft) in the arrest and subsequent questioning raised eyebrows too, but Danks hadn't helped his cause along the way. Some of the 700,000 illegal downloads of Fast 6 continued after his arrest, with Danks attempting to sell copies on Facebook for £1.50 a pop. In pirate terms, he was walking the plank still swinging his cutlass.

Furious 6

Fast & Furious 6 was downloaded 700,000 times when Philip Danks (inset) uploaded it to the net.

Headline cases like this are the exception that the studios hope will bring some kind of rule to the badlands of movie piracy. It may take some time. An Ofcom study showed that a third of films downloaded in the UK between May 2012 and May 2013 [infringed copyright]( More recently, a leaked copy of Expendables 3 appeared on torrent sites a full three weeks before the film's US release. Unlike the very-much-unfinished cut of X-Men Origins: Wolverine that leaked in 2009, Stallone's movie was nearly cinema-ready. Five million downloads and a box-office flop later and Lionsgate was wondering what had hit it.

According to Michael Smith, Professor of Information Technology at Carnegie Mellon University, the big studios are able to absorb the loss of "ten to 20 per cent" of a movie's takings to piracy, but it's a bleaker story at the smaller end of town. "In a world of piracy, big blockbusters are still going to be profitable," he stresses. "The question is whether there are small movies that, at the margins, would have been profitable but for piracy and just aren't being made now."

STOPPING SITES SHARING LINKS TO PIRATED FILMS AND TV SHOWS – A VIRTUAL SPLAT-THE-RAT COMPLICATED BY THE VAGARIES OF GEOGRAPHY AND LEGISLATION – IS A GAME EVEN ITS PLAYERS AREN’T CONFIDENT OF WINNING.Stopping sites sharing links to pirated films and TV shows – a virtual Splat-the-Rat complicated by the vagaries of geography and legislation – is a game even its players aren't confident of winning. "Eradicating piracy is like trying to eradicate crime," says MPAA president Chris Marcich, a 20-year veteran of the entertainment industry's war on copyright theft. "It's not possible. [But] it can be contained to levels that are tolerable."

That containment will continue to require blood, sweat and lawyers. Lots of lawyers. While the MPAA – the trade body that represents Hollywood's big six studios – had cause to celebrate when Kim Dotcom's Megaupload was shut down in the US, most prosecuted sites will just spring up elsewhere on the planet. Megaupload became plain Mega. Dotcom himself continues to fight extradition charges in New Zealand.

Smith's data, which is pored over in Hollywood boardrooms, points to a 6.5-8.5 per cent increase in the digital revenues for three of the major studios when Megaupload was shut down. Legal countermeasures clearly can make a difference in the short term, but there are obvious limits. "You can't really act against someone who lives on an island somewhere," cautions Benjamin Hauck, Chief Business Development Officer of piracy monitoring firm Excipio. Torrent sites are hardy beasts and their users aren't easily deterred. The UK ban on The Pirate Bay in 2012 saw peer-to-peer sharing drop for only a week before returning to previous levels.

There are other concerns. Britain's Copyright Act allows injunctions to be used against ISPs carrying torrent sites, but campaigners like the Open Rights Group warn that site-blocking is more like a blunt instrument bashing legitimate web traffic than a scalpel surgically excising piracy. The alternative – targeting the downloaders themselves – has spawned the long-delayed ‘three-strike system' of the 2010 Digital Economy Act. Even if it comes into effect, only illegal downloaders with an acute phobia of paperwork are likely to be deterred by the three warning letters they'd receive. Studios will hope that the Philip Danks case, a rare and punitive response to commercial piracy, will deter others from following suit.

The Expendables 3

Expendables 3's box office suffered after illegal copies appeared on torrent sites three weeks before its US release.

So if even the combined power of the FBI, the MPAA, Britain's FACT and, heck, probably S.H.I.E.L.D. and the Men In Black themselves can't entirely quash the pirating of theatrical releases, what hope is there for the industry? Plenty, believes the MPAA's Marcich. "There's good reason to be optimistic," he tells Empire. "All signs show that consumers still like to watch movies in theatres and I think that will continue. We're heading in the direction of ever-improved and even more diverse legal offerings."

ON-DEMAND SERVICES, OFTEN OFFERING DAY-AND-DATE PROGRAMMING, ARE STARTING TO REVERSE THE TREND TOWARDS PIRACY, PARTICULARLY OF TELEVISION SHOWS.And that may be the nub. Studios are increasingly moving towards day-and-date releases for their biggest offerings to curtail the chance that audiences in second-round release territories will already have pirated the film. And on-demand services, often offering day-and-date programming, are starting to reverse the trend towards piracy, particularly of television shows. "Companies like Netflix turn pirates into [customers]," argues Hauck. His stats show that audiences are prepared to pay to watch their favourite shows, as long as – and here's the crux – they can see them close to their original air date.

"Let's take Game Of Thrones," offers Hauck by way of illustration. "It airs in the US on date ‘x', and people from the UK and Australia want to get it right away because it's on Facebook and Twitter, but they can't get it legally. So what do they do? They pirate it." Of HBO and its famously laissez-faire approach to piracy, there's bemusement in the industry. "Yeah, it's kind of an interesting approach," laughs Hauck. "If you're a distribution company and you pay a lot of money for the licensing of Game Of Thrones you're probably not that happy when the CEO of HBO tells people just to pirate it. That would upset me!"

And as Michael Smith points out, what works for HBO and Game Of Thrones doesn't help Sly and his Expendables. "HBO is more concerned with selling subscriptions than they are with Game Of Thrones per se," he stresses, "so building the brand is great for them, whereas nobody outside the industry knows if Expendables 3 is Lionsgate or Sony."

HBO's ambivalence to piracy probably didn't play well in the boardroom of Australia's Foxtel, either. The subscription cable network, catering for a nation hooked on the gory goings-on of Westeros, paid big bucks to show Game Of Thrones, only to find it ripped, downloaded and fileshared with a voraciousness that would spin heads even on the spikes of King's Landing. Still, as a how-not-to-do-it case study, the channel's response to 400,000-plus illegal downloads of season three by blocking the show on iTunes, where fans had been able to rent it, was a humdinger.

Game Of Thrones

Kit Harington in the heavily-pirated HBO show Game Of Thrones.

Cue... well, a lot more piracy. Even torrent sites broke cover to offer their critique. "We are ready to help out those Australians who are unable to afford the expensive subscriptions that are forced upon them by these monopoly based companies," EZTV told TorrentFreak. Foxtel's move to shift the show onto a day-and-date basis after lagging months behind HBO for previous seasons didn't have the desired effect. It fought back, dusting off the old argument that theft is theft and that excusing piracy is "like justifying stealing a Ferrari on the basis that the waiting list is too long or the price is too high".

Foxtel's minimum package of $35 per month and the promise of access to other programmes won't discourage the same Aussies from pirating season five – there's a reason Ferrari dealers don't insist on bundling in a mobility scooter and a rusty minivan when customers want to buy a new Maranello – but piracy watchers believe that a lower figure might just sway viewers.

In fact, US website seemed to reveal what that figure might be in 2012. It asked HBO's loyal piraters to reveal what they'd pay for cable-free access to the network's streaming service, HBO GO. The average answer? $12. This tallies with Smith's findings in the extensive research he takes to the studios. "Part of piracy is people who want to watch it in a particular format and don't have access to that format," he explains, "and part of piracy is people who just want to get it for free. If you can give that first group a way of consuming the content in the format they want to want to watch it in – for a fee, obviously – our research suggests they'll switch over to legal channels." The success of iTunes and similar legal online music distribution would tend to support that argument.

BY GIVING CUSTOMERS WHAT THEY WANT, WHEN THEY WANT IT, HOLLYWOOD MAY JUST SNATCH A DRAW IN THIS CONFLICT.By giving customers what they want, when they want it, Hollywood may just snatch a draw in this conflict. "You have a hardcore of people who [pirate] for different reasons," says Marcich. "Some do it as sport, but those who do it as a business will find it much more difficult." New monitoring technology (those Sandtrooper binoculars occasionally spotted in multiplexes), more advanced tech to trace pirates, watermarking preview discs for awards voters, and a greater stigmatisation of piracy itself will play a part in that, even if ISPs and search engines manage to cling to their neutrality in the face of enormous pressure from the MPAA and others. "Google can do more," insists Marcich. "They're less and less able to hide behind false arguments about their neutrality, their lack of direct involvement in their search results. Courts are saying, ‘Wait a second, your algorithm is more intelligent than a broadcaster's TV guide.' That same intelligence can be applied to dealing a bit more responsibility with illegality too."

Whether or not Google enters the fray – and don't count on it – industry analysts share the MPAA's cautious optimism. "My gut is that piracy will remain the same or decrease slightly," says Smith. "We'll start to figure out ways of satisfying the demands of piraters through other channels, but you'll always have people who want to get the movie for free."

So what of the future? It may not be as bleak as the prophets of doom would have us believe. The recent signs are that the carrot will prove more effective than the stick. When content is made available in a timely and affordable way, the vast majority viewers are willing to pay for it, whether in theatres, at home or via mobile devices. In the long term, it's this rather than punitive charges like those brought against Danks, that may prove the best remedy.

Ultimately a shift in thinking is needed because the war on piracy, like the War on Drugs, isn't a war at all. Wars end; piracy will be with us for as long as the internet has breath. But as studios slowly wake up to the fact and adopt an increasingly sophisticated, targeted approach to the problem, piracy will slip down Hollywood's panic list. Then it can get back to worrying about the next superhero reboot.


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