OREGON STATE UNIVERSITY

New breed of digital 'pirates' challenges film industry

Center for the Humanities Newsletter Photo
Jon Lewis

“A singular truth exists in the movie industry. If you can’t protect what you own, you don’t own anything.” The words are those of Jack Valenti, former president of the Motion Picture Association of America, and they refer to the big new challenge for the film business.

“Valenti made clear that the new battleground for the motion picture industry is no longer censorship—the familiar hue and cry over movie violence and sexual content—but piracy,” said Jon Lewis, Research Fellow and professor of English at OSU.

New technology will soon allow the downloading of a DVD quality movie to a home computer in five seconds. According to Valenti, 400,000 to 600,000 films already are “abducted” every day. The resultant losses aren’t felt so much by the film directors, producers or writers, but by the studio distributors who make up the Motion Picture Association and who own nearly all the copyrights on commercially released films.

“So what’s at stake in this 21st Century struggle with Internet pirates is control over the marketing of filmed materials, control over the movement of filmed material as it makes its profitable way through the various markets that comprise the modern entertainment industry,” said Lewis, author of seven acclaimed books on the film industry.

Domestic theatrical earnings account, on average, for only 16 percent of the total revenue of most film studios. The remaining 84 percent are comprised of domestic home video (26 percent), international box office (16 percent), international home video (20 percent), domestic television (11 percent) and licensing and merchandising (11 percent).

“The free uploading and downloading of filmed information on the Net threatens several if not all of these parallel markets. Though it is hard to feel all that sorry for the studios and their lost revenue, only a small, very specialized community makes the case that stealing and sharing films on the Net is either legal or ethical.”

Even so, said Lewis, efforts to enforce copyrights on the Net have been difficult. For example, when the recording industry forced the closure of Napster, in its place more sophisticated sites such as Gnutella and Kazaa emerged. When a suit was filed against Gnutella, the court found the peer-to-peer (P2P) network not liable for what its users do with their software.

“After working hard for the better part of a century to keep the government out of the film business, the 21st Century Motion Picture Association of America is working hard to get the government to intervene on their behalf. At stake as the MPAA lobbies hard for government regulation of Internet traffic is more than just the financial bottom line of a handful of very wealthy companies that own the movie studios.”

Through his Center project, a book titled ‘If you Can’t Protect What You Own, You Don’t Own Anything’: Piracy, Privacy and Public Relations in 21st Century Hollywood, Lewis will make clear that future regulation and enforcement will raise significant questions concerning international public relations, individual privacy and academic freedom. “While we assume that digital pirates are mostly computer savvy teenagers too poor or too cheap to buy DVDs from Amazon.com, a new breed of digital pirates has emerged from America’s heartland,” said Lewis.

The story begins with the 1997 booking of the film Titanic at the Towne Cinema in Twin Forks, Utah. When the proprietor of the theater previewed the film, he objected to two racy scenes, so he cut them out with scissors. A few weeks later he did the same thing to Deep Impact; he did not announce what he was doing, and the Motion Picture Association did not openly object.
“In a classic Clintonian conceit, the Towne Cinema and the MPAA reached an accord: don’t ask, don’t tell,” said Lewis. There followed more such incidents, including a case of 135 cuts in Blackhawk Down that were made by Albertsons stores in Utah. And now there is software that can edit DVDs while they play, to remove bad language, nudity and so on.

“The industry is divided on these post-release editing systems because the purveyors do not ostensibly cut into their profits and may well increase revenues over the long term.” Nonetheless, many studio executives and filmmakers view the technologies as a form of piracy because they disregard the integrity of film copyrights.

Another challenge comes from China, where the government allows just twenty U.S. films per year into the country, not nearly enough to satisfy demand. “If the Chinese government won’t give the people what they want, then they’ll steal, duplicate and buy pirated copies of these films because there’s no other way to participate in the global American culture.”

Among its strategies to combat film theft, the film industry is turning ever more to Congress, which it is lobbying with some success for anti-piracy laws.

Despite the piracy, said Lewis, the movie industry continues to make huge profits. “Valenti has acknowledged that the Internet has the potential to be ‘a magnificent delivery apparatus’ and it may well be only a matter of time before sites like I-Tunes emerge, simplifying and legitimating the digital delivery of film-files on the web. But in the meantime, the studios are trying to protect their copyrights, not necessarily from unlicensed alteration, but from illegal acquisition. As with so many Hollywood stories, the bottom line is indeed the bottom line.”