Web pirates pillage Hollywood
Some 350,000 movies are being taken off the Internet every day for free.
LAS VEGAS, NEV.
Fifteen-year-old Sherie Tree (not her real name) is "obsessed" with "Moulin Rouge." So when the Oscar-nominated movie turned up on the free file-sharing Internet service Morpheus, she downloaded it, using her high-speed DSL phone line.Skip to next paragraph
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Now she watches it over and over again on her computer. To this Los Angeles area teen, downloading a movie is simply using technology at hand to quickly enjoy something she's interested in no different from turning on the TV or radio. But to the entertainment industry, she and unknown thousands of computer-savvy people who do the same thing is nothing short of a pirate, robbing the movies' "owners" of their rightful revenues.
"It's a huge problem," says Peter Chernin, president of News Corp. Ltd., the parent company of 20th Century Fox studio. "We have young people everywhere who think this 'file sharing,' as they call it, is just fine. Any college with a [high-speed] T1 line makes this possible; It's happening all over."
According to the Motion Picture Association of America (MPAA), the industry already loses more than $3 billion annually to the sale of illegally copied videotapes. Now, with an estimated 350,000 digital movie files being downloaded daily for free, and with that number expected to climb to a million by year's end, digital film piracy is Hollywood's next nightmare.
"If we don't think through how to protect digital entertainment material," says Richard Parsons, who'll take over as chairman of media conglomerate AOL Time Warner next month, "this entire business could be pirated away."
The film community watched closely as the music industry challenged and ultimately shut down Napster, the Internet music file-sharing site. "With Napster," says Fritz Attaway, executive vice-president of the MPAA, "we learned that we have seen our future, and it's terrifying."
Not only does the absence of a universally agreed-upon solution for digital piracy threaten the economic health of the movie industry, but worries about wholesale theft hamper the rollout of new digital technologies that consumers have long been promised, such as high-quality digital cinema in movie theaters and digital broadcasting for television.
Hollywood has marched on Washington, seeking relief. At the end of March, Sen. Ernest Hollings (D) of South Carolina introduced the Consumer Broadband and Digital Television Promotion Act, which demands new hardware and software, from TVs to CD players to computers, to block unauthorized copying of copyrighted works.
"We are taking a multipronged approach," News Corp.'s Mr. Chernin says, "with legal action and a legislative approach."
But more than Hollywood studios have something at stake in the debate over digital-video piracy. "Consumers, on a daily basis, are losing personal-use rights that they expect and cherish," says Joe Kraus, co-founder of DigitalConsumer.org, as well as the Internet business Excite.com. The Internet pioneer details the most recent rights that have been taken away by legislation, most recently by the 1998 Digital Millennium Copyright Act:
The 1992 Audio Home Recording Act legalized the right to copy music for personal use, but the 1998 legislation makes it a crime to extract music from copy-protected CDs. Thus, you you cannot duplicate a CD to create an extra copy to, for example, use in your car.
The Supreme Court has ruled it is legal to tape broadcast TV shows, but new HDTV standards will make it illegal to copy a digital broadcast without the permission of the TV station.
It is now a crime to sell a DVD player that allows you to fast-forward through ads at the start of a DVD with content that companies have denoted "must-see."
"Historically, there has been a balance between the rights of copyright holders and citizens that has generally served us well for over 200 years," Mr. Kraus says. Copyright holders have the right to make a profit on their product, and consumers have the right, once they've purchased content, to use it in "noncommercial, flexible ways."
Kraus points out an important precedent that he says is being ignored in the current debate. The concept of copyright, he says, is relatively new and was hotly debated during the early days of the US Constitution.