Torrents, piracy and beyond: will the film industry survive?

cnv00028"So the guys who started this business all cheated somebody to get there, and now they're being cheated, perhaps, by all these crazy, geeky people all over the internet. I must say, my anguish level is not great."
Richard Dreyfuss

"although iTunes has 70% of the pay to download music market - only 1 in 40 of all tracks downloaded on the web are ever paid for. That's 2.5%"

For many years now people have been telling us how much the media world is changing. And it is. Faster than we ever imagined.

I downloaded my first Torrent this week. It took me about 20 minutes to download and install the software and get an album called Wu Orleans - a mash-up of Old New Orleans Blues and the Wu Tang Clan which will never appear in a shop. There’s the rub - if I wanted to pay to buy the album I wouldn’t be able. Like DJ ‘Gnarls Barkleys’ Dangermouse’s Grey Album, and DJ BC’s Let it Beastles it’s in a strange category of illegal downloads where there’s no legitimate alternative. The choice is between never hearing these songs or breaking copyright law. DJ BC and Dangermouse are so good at what they do that the idea of simply never listening to the tracks wasn’t really an option.

But now, as a result, I have a piece of software which could, if I so chose, allow me to download pretty much any album, TV, piece of software or film. For free. I won’t. But I could.

I read last week on the FT that although iTunes has 70% of the pay to download music market - only 1 in 40 of all tracks downloaded on the web are paid for. That’s 2.5%.

I’ll say that again. 2.5% of music downloaded on the internet is paid for. The other 97.5% is ‘illegal’.
Shift this across to the world of film and you may get a glimpse of quite how things are changing, and why some people in the industry are - to put it mildly - concerned.

It would be a great time to be a snake oil salesman. To offer the industry some miracle Digital Rights Management cure, some piece of technology, some dongle that would turn back time to the days when you couldn’t duplicate a bunch of 0s and 1s to create seamless perfect copies. Or to provide the powers that be with the details of a single organisation or server farm which, if they shut  it down, could put an end to these threats and guarantee the multi billion dollar media conglomerates an unimpeded flow of their multi billion dollar revenues.

untitled by jeff Belmonte's Flickr Creative Commons setAnd there’s the rub. While the studios shout that piracy hurts the artists and the filmmakers and musicians, most savvies know that - AT MOST - 10% of the cover price of any DVD or album will go to the original artists or production company. In many cases it’s much less. When you bring creative accounting in, sometimes the people who made the project such a success will never see anything. Forrest Gump earned over $677 million at the box office worldwide, yet famously never made a ‘profit’. The Blair Witch Project, the low budget $35,000 guerilla filmmaking legend (the most profitable film ever made according to Guiness), grossed well over $248 million at the box office alone yet the filmmakers are apparently still yet to see more than their original $1m advance. As Richard Dreyfuss recently said "So the guys who started this business all cheated somebody to get there, and now they're being cheated, perhaps, by all these crazy, geeky people all over the internet. I must say, my anguish level is not great."

Hollywood’s history is splattered with the blood and tears of corruption, dirty deals and backstabbing. Its vast wealth has been accumulated from the work of an array of incredibly talented directors, writers, visionaries, artists, musicians and actors. By standing between these master storytellers and the public, Hollywood has managed to both make vast sums of money, and - more controversially - saturate the world’s cinemas and TVs with a single idealogical voice.

Perhaps it is this factor more than anything else which piracy-celebrating sites such as Sweden's Pirate Bay are trying to draw attention to. As the web helps the world shift closer to a form of balanced global consensus across the billions of citizens who have web access and freedom of expression, then there is inevitably a greater sensitivity to dominance from any one culture. Especially against the backdrop of war, poverty and the looming potential for environmental devastation - all of which seem low on the current US administration's policy agenda. It’s not an anti-American thing - I’m sure there are plenty of people in America who would like to see the media they consume be free from corporate bias, while reflecting a broad and diverse human race, in ways that honestly depict the problems of the world - perhaps even exploring ways they can be resolved.

Hollywood makes some amazing films, but there is still an overwhelming favoritism towards white, English-speaking male heroes, even in a great ‘subversive’ film like A Scanner Darkly. I can’t actually think of a famous Muslim leading actor - that’s terrible. (OK, Wikipedia tells me of Ellen Burstyn, Dave Chapelle and Omar Sharif, but that’s it really. Even tho there are as many Muslims as Christians in the world, just about, Osama bin Laden is no doubt still the most recognisable Muslim face to most Americans).

But I digress. The point is that piracy is an unavoidable reality. The political and ethical issues only increase the resolve of the pirates, as do the bullying and gung-ho attitudes of organisations such as the RIAA and the MPAA.

The nature of torrents as a technology would effectively require the shutting down of the Internet to prevent people from sharing films or music. The imprisonment or fining of individual file sharers may scare some people off doing it, but it is just as likely to alienate and anger potential consumers. Scaled up to the millions of people who ARE doing it, enforcement is arguably impossible to administer. It's really hard to see how ‘the stick’ will work in a realm as open, vast and unregulated as the net.

http://static.flickr.com/96/232091311_38a82bf747.jpg?v=0Last week Universal Music, the world’s biggest music company, announced it was going to try a version of ‘the carrot’ by offering free music downloads to consumers who first watch an advert. The SpiralFrog service will arrive later in 2006 in the US and next year in the UK. It’ll be interesting to see if it works, but if PVRs are anything to go by, people just don’t like be told to do something, least of all watch ‘a word from our sponsors’ and will sooner or later find ways to circumnavigate. But at least the industry is trying.

So what is to be done? Without revenues the music and film industries cannot survive. Films are the most expensive of art forms. Most artists are busting to give up the day job, and surely the more talented and committed should be able to? Is it done for? Can there be no more professional film and music production in a digital future?

Well I don’t know and I don’t want to Snake Oil it by saying I know how to prevent that. But it seems pretty unlikely. In fact, so long as people are prepared to use money for buying and doing stuff, it’s maybe impossible.

Think of buskers. No-one needs to pay them for their music. There is no contract or rights management software which requires you to throw some money in their hat - nor, for that matter, are you guaranteed a nod and a smile when you do. But people do. And good buskers make good money.

What we may be witnessing is a massive shift in the way the media industry operates from a relationship between creative people and consumers that is mediated by large multinational business, to one which is mediated as transparently as possible by technology, by the web. In other words, producers communicating with and selling directly to audiences.

I think of Kevin Smith, cult director, who showed just quite how creative one can be on a microbudget with Clerks and who now blogs and chats with his fans through silentbobspeaks.com (thanks Chris from Dundee for alerting me to this). Another site - jayandsilentbob.com sells all manner of merchandise - t-shirts, action figures, fake props, real props, posters and of course copies of his films. Almost all of which come signed by Kevin Smith himself. Given the adoring fandom which surrounds Smith (his Edinburgh Film Festival appearance sold out in minutes), you wonder if he could finance a film directly from these sites - pre-selling signed copies of the DVD and auctioning off roles as extras. Even without this, the shift is clear - as a film lover the impression is that there is no studio managed interface between you and Kevin Smith. When he interrupts a blog post to have sex with his girlfriend, you know that he is talking to you directly, without the bullshit - and you, in turn, buy from him his films (and Shot Glasses, Banky Hats and Silent Bob Coats).

untitled by Jeff Belmonte from his Flickr Creative Commons poolWe now live in an era where a blogger like Josh Ellis could ask his readers to pay him $500 so he could travel to Nevada and write an essay about his trip to the origins of the Manhattan project or where Daniel at PouringDown.tv could raise over $2000 from dozens of readers via Fundable.org to go and make a film a day on a week long road trip for the Seven Maps project.

The landscape is changing, and the thing that struck me at Edinburgh last week was quite how unaware and unexcited the UK industry seems to be. Of course the fact that most of these shifts are coming from the US is perhaps part of the problem. A suspicion towards technology in the UK has been going on since the levelers (and probably right back to the days when people started cooking meat on fires before eating it). And it’s understandable - I must confess given how addictive things like the web are I do share concerns of a youtubed future where everyone watches - and contributes to - their own personalized channel without enganging with the outside world - or their families - much at all. But these changes are happening, they are unavoidable, and sticking one’s head in the sand may only increase the shock once the shifts in the landscape have settled down, and reduce the potential influence.

"Think of buskers. No-one needs to pay them for their music. There is no contract or rights management software which requires you to throw some money in their hat - nor, for that matter, are you guaranteed a nod and a smile when you do. But people do."

For there are big questions to consider. Should you, for example, as a filmmaker, put your energies into befriending public and private financiers who may (or may not) one day fund your work, and make best efforts to present yourself to them as a safe bet, nothing too unpredictable, irrational or headstrong. Or would it make more sense to build up a web audience. A collection of blog readers, vlog watchers, buddies, subscribers and people you chat with online, who probably are most interested in the qualities as a filmmaker which make your work less like everything else they see; that which is your uniqueness, your humanness, your individuality.

It’s a bit of Cluetrain conclusion, and one that’s in the front of my mind right now as I try and weigh up a similar choice with Netribution. Should the site - and indeed myself as its cofounder - focus on wooing screen agencies, quangos and production companies for a bit of cash so that it can stay sustainable and launch some pretty interesting projects. Or should we focus on making - when inspired - great original content that will build up our audience to such a level where this isn’t a factor. I know which of those paths would allow me to keep the most of my personality intact - and as a filmmaker - that’s more appealing. But at the same time there are some amazing things that, with a bit of cash, could be really quite useful to independent filmmakers. And if we are shifting from studio dominated content distribution to a creative dominated system, then it would be a unbalanced system if all of the mechanisms for achieving this global collaboration and distribution was US-based and focused.

sky1.jpg

One can imagine the whole infrastructure, how it would need to work, how one could build a kind of Wikipedia for independent creatives, an open source media multinational, a technology as an alternative to the power of the media conglomerates to connect individuals throughout the entire process as transparently and efficiently and impartially as possible. It seems, the more I look at it, inevitable and unavoidable. Some could even argue that the web as it stands now is an early framework for such a structure.

I just hope that when the final pieces come together they don’t come attached - as the vast majority of the media, including the big sites like MySpace, Blogger and Flickr - as simply a continuation of the shareholder-accountable media world built around a drive to increase profit margins.

Just imagine it - a human-centric, socially-accountable media ecosystem, built around great art, music, storytelling and ideas.

(Images by OneSmallVoice and Jeff Belmonte from Flickr CreativeCommons pool)

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0 # How it would work for me...Guest 2006-09-05 04:53
If iTunes songs were $0.25, TV Shows $0.75, and Movies $2.00 - that 2.5% ratio would go up. Trouble is, big business don\'t get that they are overpriced. We bought CDs for $20 or more at first, knowing that the record companies kept most of it.

For a legal system to work, greed has to be stripped out. I would encourage any artist who sells their unprotected MP3s off their web site for $0.25. They would probably make more money than from the current system.

Until then...greed will be the greatest obstacle to the industry, not copy protection.
0 # Thought provokingGuest 2006-09-05 06:45
I\'m reminded of Disney saying that he \"makes movies to make more movies\", in the days when he would show his prints to the public personally (or so I am led to believe). I\'ve learned by making my own feature-length film (actually a documentary) that making the film is the easy part. The marketing, and getting anybody to give a stuff, is the hard part, and costs just as much as making the movie. There may be a future in micropayments for episodic installments, or perhaps a small payment for a lower-quality download version - if you want the HD version it\'ll be impractical to download so pay for it. Problem is, kids are happy with highly compressed DivX and such, so perhaps the cinema will keep the crown of cinematic experience for some time to come. I still prefer to watch a \'proper\' cinematic film at the cinema. But perhaps that\'s because I don\'t have home 5.1 and HD plasma. It\'s an interesting time for content creation, and the future isn\'t written.
0 # Guest 2006-09-05 07:50
I often laugh when I see the \\\"Amount\\\" of Piracy and \\\"Loss\\\" published by Organizations such as the RIAA or MPAA. If I like something enough I\\\'ll buy it just to have the original product. If I downloaded aomething I never cared all too much about it or I couldn\\\'t find it in the store to begin with. As for movies...how did they \\\"Lose\\\" money if I downloaded a movie that I would have never went to the theater to see anyway?..I pay for Cable Tv..I\\\'ll just wait and watch it there.
0 # Guest 2006-09-05 09:39
It really is the Cluetrain ethos, just put in a different way. Increasing in the near future, success will go to those that not only develop a community, but activly join it and be responsible to it.

However, I don\'t think it\'s correct to equivicate the problems the RIAA and the MPAA have. The RIAA are the absolute bad guys. They rip off their artists, control the airwaves and what gets in and what gets out, and price gouge their customers. That\'s a lot of bad blood built up over the years.

While the MPAA are bad for that as well, they don\'t have the awful reputation that the RIAA has. Most of the anger for movie-goers is blamed on the theatres. From over priced concessions to in accurate start times to the ads that play before the trailers. (Let\'s be honest. Most of us LIKE movie trailers.)

Because of this, movie piracy is mostly of first-run movies, people who don\'t want to go to the theatre. Down the road, you see much less traffic in DVD rips and things of that nature. If the concept of theatre first runs were eliminated, movie piracy would drop considerably.

TV piracy, quite frankly, is TIVO on the cheap. People I don\'t think care about the ads so much, is that they may want to watch a TV show at theie conviencance, and don\'t have a gadget or the setup to make it happen. Or they\'ve watched the fourth show of the season, of one of these new shows (and good shows to be honest), which have an ongoing storyline and want to watch the first few episodes to be able to understand it better.

So what TV needs is to provide their own solution, easy to use, fast downloads of recently aired shows (with ads to make money of course, even ones that can\'t be skipped). But the software and compression needs to be top notch. It\'s going to have DRM, of course, but in such a way that\'s transparent to the end user. Even allow conversions to other formats (in a lower quality), so it can be used on portable video players, or over a network.

But the software and downloads need to be fast, easy to find and rock-solid stable. In other words, they need to compete.

Back to music. P2P music downloading is NOT a replacement for the CD. MP3 downloading is a replacement for conventional radio. People are used to, and it\'s socially acceptable to tape songs from the radio. People are just choosing what songs they want on their personal radio. Blame the crappy job of radio at this. Put on top of this the community aspects of Napster, which quite frankly was the real revolution...

Listen. For those new to the game, here\'s how people used Napster. They searched for some music they liked. They noted who they were downloading it from, and looked at their collection. Because that person would have simlar tastes as them. So they\'d try a samping of music, and probably found other stuff they liked. Rinse and repeat.

iTunes is NO replacement for P2P social networking. Not even close.

If the RIAA offered CDs to be bought in bulk...say 5/20 or something like that, over time they\'d make just as much money overall, as people would be able to consume more, which is what they obviously want to do. Even do it digitally. The prices are too high for the mass consumption that the market quite frankly, is accustemed to (through radio).
+1 # Downloading TV shows NOT piracyGuest 2006-09-06 12:00
I guess I\'m too technologically impaired or too old (32) to be downloading music off the internet, but I am more or less anti-piracy. That\'s not to say I\'ve never copied one of my friends\' CDs for myself; I have several times. But for every CD I copy illegally, I buy 10 from the store. Movies I\'ll never download. I like my DVDs and theatre visits, thank you very much.

What concerns me is when the word \'piracy\' is used to describe unpaid-for downloading of TV shows, such as Lost, 24 or even Three\'s Company. How is this piracy, exactly? These shows are all on television, and you don\'t have to pay to see them. I can watch Lost or 24 wit rabbit ears if I want, Three\'s Company too (pun intended). Or at least I could have back in the day. I still have a lot of the old episodes on tape. Because the networks now want to make money off the DVDs, it\'s suddenly illegal to possess an episode of Prison Break without paying for it? What if I taped it on my VHS? (Remember those?) Is that piracy? What if I made a copy for my friend? Is that piracy? Nope, it ain\'t! And the networks can kiss my rump if they think it is.
0 # AlternativesGuest 2006-09-06 14:31
There are currently options starting to become available to the low-budget movie maker who wishes to bypass traditional distribution, and become cheaper. Google Video, You Tube, IFilm and those sites offer film makers a chance to showcase work, and may soon begin to offer a charge service (such as allowing a movie to be downloading for any price, I think 99 cents is fair).

Also, there are great companies like IndieFlix.com and Customflix.com that allow anyone to release a movie cheaply at the same level of quality as a larger studio.

I agree with many people who say that prices are too high for most content like CDs and DVDs. The music industry took a hit after Napster and the prices dropped. Now DVDs are also starting to drop in price for the same reason. The easy alternative for larger studios is to simply embrace the concept of downloading such as iTunes and reduce the prices to a fair and resonable rate.

Contact me if you have any questions at MarioXavie@aol.com.
0 # Mr. HGuest 2006-09-06 15:22
Please tell me this entire article is a joke. What the devil were the author thinking? Was he smoking happy weed? I mean, all those words and concepts, all the thoughts and ideas... come on... be the author you always wanted to be on someone elses dime, not mine!
This issue is so simple, it\\\'ll make you cry! It has nothing to do with a future in cyberspace, a balanced global concensus or even something as stupid as private financing of public films... It has to do with the very simple comment made by Richard Dreyfuss (that\\\'s two s\\\'s, by the way). Hollywood is a greedy little place.

You want to know what this is about? its about movies no longer making a profit, and us the audience no longer caring, because alot them are crap. Why no profit you ask? because people \\\"steal\\\" by downloading, others will answer. Not quite!
Look up the film the replacements (2000) on IMDB.COM. The cost of producing this film was around 50 million dolars. That, to some, will seem like a cheap film. But once it is known that Keanu Reeves were paid in the area of 12 million to be in it (IMDB\\\'s biography on K.R.), and that it also co starred Gene Hackman (who must have cost a couple of million), it makes you think that perhaps it was not that expensive. Say Hackman got 3 Million. That makes the two lead actors salaries responsible for 30% (count them) of the films entire budget! And Hollywood wonders why they can\\\'t make a profit? They wonder why people download? I don?t know about anyone else, but I download things I know to be crap from rewiews and word of mouth(Poseidon for instance). Superman, X-men, Lord of the Rings, all that stuff, I go to the cinema to see. And that by the the way is where my support ends. I make dvd copies of the films when they show up in Blockbuster afterwards.
If the cinema receipts aren\\\'t enough to make a profit, pay the actors less! Don\\\'t squeeze every dollar from me that you can!
How many \\\"Collectors\\\" dvd versions have there been of Star Wars and Lord of the Rings anyway? Give me a break!
+1 # My 2 centsGuest 2006-09-06 22:29
To me this whole piracy thing is blown way out of proportion. Ok, a movie makes money 2 ways, first the box office, and THEN the dvd. This is why I\'ve no compassion for the movie industry. Look at video games, and music. Do video games get box office sales? No, Does music get box office sales? No. So unless the movie in question, supposedely isn\'t turning any profits then why don\'t they prove it? Publish their profit loss keeping everything intact if they want peoples sympathy. It\'s all a crying game with the MPAA. I respect music and video games because when they release their stuff you know it\'s out there to be sold for the first time. For the mpaa to claim certain movies don\'t make any money at the box office, then why have a systen such as the box office to boast sales? Kind\'ve contradictory if you ask me.
-1 # RE: Torrents, piracy and beyond: will the film industry survive?Guest 2006-09-07 02:46
I feel there will be many ways to slow down movie and music piracy by \'alot\'if say companies like microsoft make the options on the desktop to access internet music download websites will instantly go uplot. If IPODS and other music devices limit music on the devices from certified CDS and website downloads \'SALES WILL GO UP\'.

We need to tackle this problem by getting every music and movie director to check the web and get all the files removed as soon as they pop up.

More examples should be shown of people who use illegal film downloads and got sued really badly. If and when this happened Movie and music piracy would go down alot.
0 # ConfusedGuest 2006-09-07 05:57
Quote:
More examples should be shown of people who use illegal film downloads and got sued really badly. If and when this happened Movie and music piracy would go down alot.
The RIAA is already lawsuit happy and doesn\'t seem to care\\comprehend that a large portion of the people they are suing are innocent.

The other issue is that while the RIAA maintains it loses X number of dollars in potential sales, it doesn\'t realize that those \"potential\" sales are just that, POTENTIAL. If I download an album and find I like it, I\'ll buy it. I don\'t want to spend $20 on a CD to find out that it\'s complete crap.

The other issue is that while the RIAA\\MPAA focuses on \"piracy\" in the US, the vast majority of piracy that actually impacts sales occurs in Russia and China. Some guy downloading a copy of a movie does NOT equate to the same thing as someone making thousands of copies of a DVD and selling them on the corner.

When the music and movie industry finally figure out that lawsuits against innocent people are not a good idea maybe I\'ll feel a little compassion for them.
0 # Whats wrong with the world?Guest 2006-09-17 11:52
I personally have been downloading music and movies from the internet for 3 years now (ever since cable became available in my area) now before you consider me a pirate think about those POTENTIAL sales i\\\'m supposedly \\\'ripping off\\\' If i download a movie and i like it i\\\'ll pay my money and get the movie experience in a theatre, however 7 times out of 10 the movie i download is absolute rubbish (not the picture quality, the plotline, acting etc.) and i would have walked out the theatre half way through or atleast felt terribly dissappointed when it finished.

Now music piracy is the same, am i gonna spend my hard earned cash on an album that i know i like 2 songs because i heard them on the radio?

NO

I\\\'ll d/l the album, see if its any good, if not, delete it, if so, keep a copy on the computer and go out and buy the CD, this way i know im not gettin ripped off for the two \\\'good\\\' songs and 12 filler songs that are utter crap

TV shows however are another matter, if someone with a Digital Tv tuner and a DVD recorder decides to archive a favourite tv show on a DVD, this is perfectly acceptable, SO why are they moaning that it is also possible for someone to rip the show with a video card in a PC, then possibly share this with other people?

ADVERTS thats why they moan, the main revenue, if you make a rip of a tv show why would you record those pesky little things? you wouldnt and people dont.

I believe the only way this situation can be resolved in a manner sympathetic to the consumer is if the music and film industries get more realistic about what people are willing to pay for entertainment, however it will probably turn out with product placement VERY prominent in TV shows and movies, this can already be seen in some shows and movies, i personally find this a repulsive echo of the consumer society that we all inhabit.

what you gonna do? :-?

just my two cents
0 # Guest 2006-11-01 13:26
hey ppl out there, with due respect to the ppl in the industry and the hard work they put in, smtime b4 i went to pvr to watch flyboys so there was an add in the starting that a lady is giving birth but when the child is out,every b ody has his own copy of the child, kinna a silly add but adresses to the piracy problem my reply insantantly to the problem was piracy saves money why not... si there is a very few percentage of segment of ppl who know the downloading thing by the torrent way especially sm gr88 movies which i could have never seen in my life time but majorty of the ppl see what they are shown,and they go by the rules so in any case the industry is making good profits inspite of this i know that now the awareness is increasing and there may be a prob in the future but there is no solution... you close napsetr and there is win mx... and let me ask you one thing for eg i am an indian and my fav singer is a frecnch\"mylene farmer\" so how the hell am i supposed to listen to her in inda.. here in the role of google and downloading comes in and in disguise i am supporting the actress by creating more awareness for her...so you see it is not that bad as we think.. the profits req to be made are already made in the market and the industry was surviving b4 the net we well so consider the same situation because every one does not uses the net and believe me some ppl just dont go ahed from emailing,orkuting,or chattin ,and you know porn... so let me tell you piracy is here to stay...the industry will survive and will grow and will make profits and ppl will still go and watch movies in pvr... the dooms day for this is far away... so chill axe
0 # i want to be an actorGuest 2006-12-01 02:39
hello.
i want to be an actor in your movie industry,buy i dont know were to
start ok, pls if you ve any information please let me know. i will be
wating for your reply..

frm Obinna Chigozie Chukwu122050