The Movie Industry Must Stop Focusing on the Numbers
Piracy studies over the years have been quite inconsistent with each other in regards to the actual amount of revenues lost, but they consistently show that the threat of digital piracy is real and has resulted in a loss of profits.34 The first major study – by the Motion Picture Association of America (MPAA) -- came out in 2005 and claimed that the movie industry lost $18 billion in potential revenues due to global movie piracy.35 The MPAA study, however, has come under great scrutiny since box office revenues have hit new highs every year and DVDs continue to be profitable.36 Additionally, the MPAA and the movie industry had great incentive to inflate the cost of piracy because it strengthened their case for the need to expand copyright protection and it also avoided blame on their own management decisions. Even though the exact effect of piracy is difficult and controversial to assess, most studies agree that piracy does hurt the movie industry. Therefore, the MPAA and the movie industry must start focusing their efforts on figuring out why people are being driven to piracy and how they can recapture those consumers, instead of arguing over the exact dollar amount they lose to piracy each year.
There are three main types of movie piracy: (1) camcorder piracy, (2) optical disc piracy, and (3) Internet piracy.37 Camcorder piracy involves theater customers or employees illegally recording a movie at its release in theaters.38 Optical disc piracy involves illegal businesses producing counterfeit discs from illegal or bootleg copies of movies.39 Internet piracy, the focus of this paper, involves consumers downloading movies that are posted online for illegal file sharing.40 Commentators have suggested possible solutions to camcorder and optical disc piracy.41 The following analyzes potential solutions to recover the claimed $1.85 billion in losses caused by Internet piracy in the movie industry.42