When “Hulk” hit the small screen early, Hollywood hit the
roof. Two weeks before this summer’s film adaptation of the
angry green giant opened in theaters in June, copies
started showing up on file-sharing networks around the
world. The film cost Universal $150 million to make and
distribute, but anyone with a fast Internet connection, a
big hard drive and plenty of time could see it free.
Hollywood is desperately worried that it will soon face the
widespread illegal copying that has bedeviled the music
industry – and that prompted record companies to file
lawsuits last week against 261 people accused of illegally
distributing copyrighted music online. Piracy of works in
digital format, like DVD’s or high-definition television
is, in theory, so simple that whole movies could be zapped
around the globe with a click of a mouse – a prospect that
Jack Valenti, chief executive of the Motion Picture
Association of America, has told lawmakers “gives movie
producers multiple Maalox moments.”
But the early debut of “Hulk” was not the work of the
armies of KaZaA-loving college students or cinephile
hackers. The copy that made its way to the Internet was an
almost-complete working version of the film that had been
circulated to an advertising agency as part of the run-up
to theatrical release. And “Hulk” is not alone.
According to a new study published by AT&T Labs, the prime
source of unauthorized copies of new movies on file-sharing
networks appears to be movie industry insiders, not
consumers. The study is “the first publicly available
assessment of the source of leaks of popular movies,”
according to its authors.
Nearly 80 percent of some 300 copies of popular movies
found by the researchers on online file sharing networks
“appeared to have been leaked by industry insiders,” and
nearly all showed up online before their official consumer
DVD release date, suggesting that consumer DVD copying
represents a relatively minor factor compared with insider
leaks.
“Our conclusion is that the distributors really need to
take a hard look at their own internal processes and look
at how they can stop the insider leaks of their movies”
before taking measures that might hamstring consumers’
technologies and rights, said Lorrie Cranor, a researcher
at AT&T Labs and lead author of the study.
The production and distribution process provide a better
choke point, Ms. Cranor said, than antipiracy measures that
could hamstring consumer electronics devices and computer
networks. “If you’re not going to worry about the insiders,
it’s kind of pointless to worry about the outsiders,” she
said.
The insiders might be workers in production or promotion,
or even Academy Awards screeners, to whom the studios send
thousands of advance copies of DVD’s each year. “The movie
industry ought to treat everybody within its influence
equally, from studio executives and investors, down through
movie editors, truck drivers and out to the critics,”
concluded Ms. Cranor and her coauthors, AT&T Labs
researchers Patrick McDaniel, Simon Byers and Dave Kormann,
and Eric Cronin of the University of Pennsylvania.
Ken Jacobsen, senior vice president and director of
worldwide piracy issues for the motion picture association,
said he had not yet seen the report, but added that its
conclusions seemed off.
“The industry experience is the awards screeners are a
source for piracy,” he said, but primarily during the
Oscar-judging season. “The industry experience also is, on
a rare occasion, a copy gets out of a postproduction house
and enters the pirate marketplace. And the industry
experience is that a majority of movies enter the pirate
marketplace as a result of illegal camcording” in theaters.
Digital piracy, he said, is “a serious problem for us now.”
Still, large-scale swapping of high quality, full-length
films and HDTV programs is out of the reach of all but the
most wired consumer because the files are gargantuan, said
Raffi Krikorian, a graduate student in the Media Lab at the
Massachusetts Institute of Technology, who has researched
the difficulty of digital copying.
However, Josh Bernoff, a principal analyst at Forrester
Research, cautions that when the technology does grow
robust enough for movie trading, consumers will almost
certainly do it. In a recent survey of 12- to 20-year-olds
published by the company, 20 percent said that they had
downloaded a feature film. “I’d have to say when one out of
five young people has downloaded a full length movie from a
file sharing site, you do have a problem here,” Mr. Bernoff
said.
But the downloads were probably of low quality, he said,
and the economic effect is “basically nil – there’s no
evidence whatsoever that people are not going to the
theater or not buying DVD’s or not renting videotapes
because of this activity.” Solid figures are hard to come
by, but estimates in recent studies put the daily movie
downloads between 350,000 and 400,000.
Like many experts in the field, Mr. Krikorian said that
consumers were still several years away from being able to
zip large digital video files to each other. Hollywood, he
said, “shouldn’t worry about Internet piracy now, because
that’s not feasible,” he said. Instead, he suggested that
the industry learn from the mistakes of the music industry
and focus on building business models that will allow the
companies to give customers what they want, “so they don’t
have to look like the bad guys, suing 12-year-old kids.”
Much of that planning is already going on, Mr. Bernoff of
Forrester said. Studio leaders “are absolutely determined
that they will not allow to happen to them what has
happened to the music industry,” he said. They see
video-on-demand through online distribution – if made easy
to use and priced right – as being far more attractive than
the hassle-filled process of video file swapping, he said.
Studios might have to be willing to release movies to the
Internet earlier than they would like to compete with
pirates, he said, but a good industry strategy will “shut
down the illegal distribution” by making it irrelevant.
While Hollywood is supporting new laws to toughen penalties
to fight online piracy, it is also imposing better control
over internal security. The case of the premature “Hulk”
turned out to be a success story because federal
investigators traced the online copy back through
identifying numbers. The person who put the movie online,
Kerry Gonzalez, had received an early copy from a friend at
an advertising agency. He pleaded guilty to copyright
infringement in June.
Ms. Cranor and her colleagues acknowledge that the industry
has taken some steps, but concluded that substantially more
could be done.
To Mr. Bernoff, those moves are crucial to any industry
strategy for fighting digital piracy. “They have to mind
their own store,” he said.
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