The threat of digital piracy looms large on the global stage and affects everyone from content providers to consumers. William Murray '83, executive vice president of the Motion Picture Association, explains the implications for Hollywood and the international film industry.

Battling Piracy
The greatest piracy threat facing the film industry is the Internet. Ironically, the Internet also represents a tremendous opportunity. One need only look at what has happened in the music industry; since peer-to-peer file swapping commenced in mid-1999, CD sales have plunged, music labels have laid off thousands of staff, and retailers have closed outlets.

It is clear that consumers wish to enjoy digital entertainment in new ways. Thus, the film industry is seeking to learn from the music industry’s experience. The challenge is to take advantage of all the innovative opportunities that technology can offer while working to rightfully protect content against copyright infringements that are often driven by technology.

The film industry has embarked upon a multi-pronged strategy–one that includes educating the public about copyright laws, shaping legislation to correspond with market and technology realities and, if necessary, litigating against infringers. Simultaneously, studios are working with technology providers in an effort to test and embrace new business models–not to just coexist with technology, but to take advantage of new technology by bringing consumers new ways to enjoy films.

Major studios are currently providing movies online to consumers through several ventures, such as Movielink and CinemaNow, and there are more than a dozen other sites that provide movies online, some services specializing in certain genres, others covering a broader spectrum. These services are all rapidly evolving–some charge fees; others are free and supported by advertising. Some services permit viewers to stream content, while others allow downloads for later viewing, with viewing options including limited-time viewing, or an open-ended license to view and review the film.

Another strategy for curtailing piracy is shorter distribution cycles for films. Hollywood’s motion pictures have traditionally been released in the United States first, and in international markets afterward. As the world has grown smaller–and piracy more sophisticated–there is a concerted effort on the part of movie studios to release pictures simultaneously in as many markets as is practical. This speeds up the lifecycle of the picture–from the theatrical release to home entertainment to television–and enables studios to effectively minimize the advantage that pirates have tried to capitalize on by delivering pirated versions of films to marketplaces before legitimate offerings were available.

Developing Global Policies
Internationally, copyright law is framed by international agreements such as The World Intellectual Property Organization (WIPO) and the Berne Convention. Although there are regional and national differences in how copyright law is implemented, there is no dispute about the basic protections that should be provided to content owners: the right to prevent others from stealing their copyrighted creative works. The effectiveness of governments outside the United States to enforce these basic protections, however, varies wildly. Illustrating the problem, last year alone over 51 million pirated optical discs were seized around the world. In Russia or regions like Asia, for example, enforcement of copyright law is simply not a priority. However, writing protections into international trade agreements gives U.S. industry, and the U.S. government, an opportunity to motivate host country governments to adopt new laws or enforce existing laws when they otherwise might not do so.

The reality is that developing countries have many good reasons to enforce anti-piracy policies. First, whether they are aggressively commercializing it or not, they have substantial intellectual property of their own in the form of music, stories, textile designs, traditional architecture, painting, etc., which could represent real value to a country’s economy. Second, tolerating piracy often leads to other illicit activities that undermine the foundation of a solid economy. Finally, as economies develop, they will need to look beyond basic low-wage manufacturing - but if they fail to create a respect for intellectual capital, they will have difficulty developing their economies beyond traditional smokestack endeavors.

The Final Analysis
There have been many watershed moments for the entertainment industry - the introduction of sound in film, the advent of television, and the proliferation of the VCR. With today’s new digital technologies, the entertainment industry is at another exciting crossroads, where consumer demands will drive innovation and new markets, and international borders and trade barriers will diminish as impediments to business opportunities.

But these opportunities will not be realized if this same technology drives piracy. U.S. movies, television programming, home videos, and DVDs reach audiences through a global partnership - with U.S. producers and distributors relying upon local cinema owners, local broadcasters, and local video store owners in dozens of countries. U.S. programming is produced in dozens of countries around the world, as “films shot on location” are created in an international collaborative process.

Thus, consumers, cinema owners, broadcasters, advertisers, filmmakers, and dozens of others around the world all have a stake in seeing piracy curtailed, for ultimately no industry can survive if its output is stolen unchecked. The film industry is working diligently to suppress piracy, with the final outcome of this battle not to be known for years to come.

William (Bill) Murray ’83 is executive vice president and co-chief operating officer of the Motion Picture Association in Encino, California. He has 19 years of management, trade, lobbying, and leadership experience at the international trade association of the U.S. motion picture, television, and home video industry. Bill can be contacted at William_Murray@mpaa.org.

RECOMMENDED WEBSITE FROM
World Intellectual Property Organization (WIPO)