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Movie Piracy Claims More Fiction Than Fact

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Monday February 05, 2007
Appeared in the Toronto Star on February 5, 2007 as U.S. Movie Piracy Claims Mostly Fiction

In recent weeks, Canadians have been subjected to a steady stream of reports asserting that Canada has become the world's leading source of movie piracy.  Pointing to the prevalence of illegal camcording - a practice that involves videotaping a movie directly off the screen in a theatre and transferring the copy onto DVDs for commercial sale - the major Hollywood studios are threatening to delay the Canadian distribution of their top movies.

While the reports have succeeded in attracting considerable attention, a closer examination of the industry's own data reveals that the claims are based primarily on fiction rather than fact.  In the best Hollywood tradition, Canadians have been treated to a show from the Motion Picture Association of America (MPAA) and its Canadian counterpart (the Canadian Motion Pictures Distributors Association) that is much ado about nothing, featuring unsubstantiated and inconsistent claims about camcording, exaggerations about its economic harm, and misleading critiques of Canadian law.

First, the camcorder claims have themselves involved wildly different figures.  Over the past two weeks, reports have pegged the Canadian percentage of global camcording at either forty or fifty percent.  Yet the International Intellectual Property Alliance, a U.S. lobby group that includes the MPAA, advised the U.S. government in late September that Canadians were the source for 23 percent of camcorded copies of DVDs.  

Not surprisingly, none of these figures have been subject to independent audit or review.  In fact, AT&T Labs, which conducted the last major public study on movie piracy in 2003, concluded that 77 percent of pirated movies actually originate from industry insiders and advance screener copies provided to movie reviewers.

Moreover, the industry's numbers indicate that camcorded versions of DVDs strike only a fraction of the movies that are released each year.  As of August 2006, the MPAA documented 179 camcorded movies as the source for infringing DVDs since 2004.  During that time, its members released approximately 1400 movies, suggesting that approximately one in every ten movies is camcorded and sold as infringing DVDs.  According to this data, Canadian sources are therefore responsible for camcorded DVD versions of about three percent of all MPAA member movies.

Second, the claims of economic harm associated with camcorded movies have been grossly exaggerated.  The industry has suggested that of recently released movies on DVD, ninety percent can be sourced to camcording.  This data is misleading not only because a small fraction of recently released movies are actually available on DVD, but also because the window of availability of the camcorded versions is very short. Counterfeiters invariably seek to improve the quality of their DVDs by dropping the camcorder versions as soon as the studios begin production of authentic DVDs (which provide the source for perfect copies).

Camcorded DVDs, which typically feature awful sound and picture quality, ultimately compete with theatrical releases for only a few weeks and likely have very limited impact as they do not represent a viable substitute for the overwhelming majority of moviegoers.   

In fact, as the movie industry has grown - global revenues have nearly tripled over the past 25 years - the importance of theatre revenues has shrunk. In 1980, theatre box office revenues represented 55 percent of movie revenue.  Today, DVDs and television licensing capture the lion share of revenue, with the box office only responsible for approximately 15 percent of movie revenue.  In other words, the economic impact of camcorded DVDs - which involve only one in ten releases and impact a small part of the revenue cycle - is little more than a rounding error in a US$45 billion industry.

Third, claims that Canadian copyright law is ill-equipped to deal with camcorder piracy are similarly misleading.  Canadian law already renders it illegal to make for sale or rental an infringing copy of a copyrighted work such as movie.  The Copyright Act includes severe penalties for violating this provision with the potential for million dollar fines and up to five years in jail.

Indeed, the MPAA's own website specifically points to Canada as an example of how many countries have legislation that prohibit illegal camcording.  The movie lobby group states that "in Canada camcording is an infringement under the Copyright Act, regardless of whether it is for the public or personal use of the person making the copy."

Moreover, the CMPDA's website trumpets dozens of arrests for DVD and movie piracy in Canada.  Over the past year, the RCMP and local police forces laid charges for DVD piracy on numerous occasions, while a Canadian court upheld a U.S. decision to fine a Canadian operator nearly $500,000 for copyright infringement related to movie piracy.

As for claims that tough U.S. laws are pushing camcording into Canada, the president of the U.S. National Association of Theatre Owners told his members in November that illegal camcording in the U.S. has expanded over the past two years from New York and Los Angeles to at least 15 states across the country.  

Despite all the evidence the contrary, the U.S. and Canadian lobby groups continue to portray Canada as a piracy haven while pressing Canadian Heritage Minister Bev Oda and Industry Minister Maxime Berniers for unnecessary legal reforms.  Unless politicians separate fact from fiction, this show appears headed for a frightening finale.

Michael Geist holds the Canada Research Chair in Internet and E-commerce Law at the University of Ottawa, Faculty of Law. He can reached at mgeist@uottawa.ca or online at www.michaelgeist.ca.

Comments (23)add comment

Chris said:

...
This appears to be more in a very disturbing trend of the MPAA/RIAA to bleed as much money of of the consumer as they can while blaming the poor revenues and constant cost increases on a small number of purates rather than on their lack of worthwhile product.

In the youTube / slashdot world where data is available on demand to anyone who seeks it, theatres, taditional broadcasting and other "push" methods of distribution are no longer the cash-cows they used to be. If the MPAA wishes to reduce piracy it needs to implement ways to distrubute their media on demand to consumers in formats they want. I personally know of many pirates who will download a DVD simply due to wanting to enjoy it using their own home theatre equipment and not having to spend $5+ on popcorn. With DivX and Mp3 formats as widespread as they are, it is no surprise that pirates are taking distribution into their own hands as clearly the MPAA/RIAA are not.
February 05, 2007

This is stupid said:

Internet anyone?
If they delay the release of movies in Canada you're just going to have more people downloading the movies from the net and watching them more confortably at home for free...Why are these people stupid? People won't steal if paying is more attractive...
February 05, 2007

A Martin said:

Systems Administrator
Arrr, eh.
February 05, 2007

JW said:

Sir
Hmm. Canadian music took off when the CRTC limited US content. Of course "delaying" isn't quite as good as limiting but as someone else has pointed out, dumb moves by dumb people could result in benefits to both pirates and Canadian moviemakers. Talk about poetic justice.
February 05, 2007

Graham Williams said:

Industry Growth
I've mentioned this before and I'll say it again; from a retail stand point we are seeing overall growth in media sales. Individual categories occasionally falter in year over year numbers - you can usually link that to either a strong performance the year before (the release of a blockbuster) or the poor performance of a current "new release" (we've had some real stinkers of late).

We also noticed a surge in sales when the prices of media dropped to more reasonable levels. $9.99 for a CD or $7.99 for a DVD makes it more effort to pirate the media than to purchase it. It's time for consumers and retailers and CE manufacturers to stand together and tell the media producers that we will not be held hostage by their insecurities.
February 05, 2007

Basil Berntsen said:

...
Scary stuff- I wonder why they're specifically targeting Canada on this? Maybe it's because we don't allow the blanket "john doe" lawsuits they use in the US...
February 05, 2007

Phil said:

...
Most likely because we don't have an equivalent to the DMCA here.
February 05, 2007

MIles Kilometers said:

...
The same tactic has recently proved spectacularly effective at selling wars and increasing state power. This has apparently inspired imitators.
February 05, 2007

Anon said:

It\\s Just More Fiction to Copyright
Modern Pirate Fiction
by the Motion Picture Association of America
(C) Copyright Whenever (lasting Forever)

Seriously, the RIAA and MPAA are just upset that they don\'t have complete control over the markets. They can\'t force everyone to purchase their latest stinkers for any price much less the inflated prices they offer. So they choose to blame their losses on an insignificant fraction of behavior exhibited by would-be consumers when if they lowered their prices to correlate to the quality of the content they might see more profit and even less piracy.

Their primary failing is arrogance: assuming that every pile of s*** they make is 100% pure Au.
February 05, 2007

Lance said:

...
now us as Canadians, have to hope george bush don't mistake movie piracy for wepons of mass destruction
February 06, 2007

Sanji Himura said:

Ignorance is Bliss?
While I am completely ignorant of Canadian law, I do know propraganda when I see it, and what the CMPDA(and the MPAA) put out about canadian law is just that.

Like Mr. Geist said, the dristubution window for movie pirates is only a few weeks long(unless it is in Mexico as evident by video game piracy), and what happens when the movie hits shelves? Usually people buy it.

However I do pose the question as to why the MPAA put this lie out? Is it because Canada doesn't allow blanket "John Doe" lawsuits like my country? That is exactly what I think. Just imagine the power that will come from this. I know that RIAA will use it to sue more 11 year old kids, grandmothers who don't even have computers and dead people. I know that they will use the suit and then drop their suit when they call their bluff and want the jury to decide.
February 06, 2007

Ian Marsman said:

Software Developer
Media companies need to get with the program. I see pretty much any TV show or movie I'd care to watch available with a click of the mouse through bittorrent. I only took one marketing class, in high school, but still I find it quite easy to understand why "piracy" happens.

I'd pay $2 a TV episode and $5 a movie if I could download them easily in an unencumbered format. Media companies could make a few hundred bucks a year off me, but they don't. Instead they treat us to weird warnings that we shouldn't take a video camera into the movie theatre. People also shouldn't scratch cars in a showroom with keys or butter knives, but that hardly needs to be said, does it. Treating customers like criminals is an odd way to do business and seems to me the hallmark of a bully used to getting his way who finds that the lunch money business is running dry when the kids find an alternate route to school. Anyway, should media sellers decide to sell me cheap TV shows and movies with little or no restrictions I'm ready. They'd look great on my iMac with remote. I think I'll be waiting a while yet.
February 06, 2007

Canadian said:

...
World leading sources ? Are they joking ? Thats a total bullshit... Its just a propaganda for our gouvernment to change ours law about that...

February 06, 2007

Southern Neighbor said:

Fight Fire with Fire
Not knowing anything about Canadian Civil Law, I wonder if it would be possible for the residents of Canada who feel that they have been slandered by the MPAA to file a massive Class Action Lawsuit? Being in one of the most ridiculously litigious countries every conceived, I can say that it would be one lawsuit I would actually respect. It would be great if someone could hit them back with the same tools they use to intimidate the masses.
February 06, 2007

Some Aussie said:

The Important People
This is a great story and some great comments.
But the problem is, are the Canadian law makers reading this?
They are definitely getting the propaganda.
So how do we make the law makers aware that what they are getting may not be all it's cracked up to be?
February 07, 2007

a guest said:

TomCat
"In fact, AT&T Labs, which conducted the last major public study on movie piracy in 2003, concluded that 77 percent of pirated movies actually originate from industry insiders and advance screener copies provided to movie reviewers."

Maybe they should check their own security before bothering others. Downloaded bad quality cam recordings aren't that prolific. Mass produced screener/post production leak releases are perfect quality, and don't require additional work.

The whole cam recording angle is just low hanging fruit with no impact on the industry.

TC
February 08, 2007

Mike said:

Damn Right!
I'm glad you are out there Michael Geist;

I thought there was something fishy about this whole story, and as you said, the figures don't add up. I want to know, on America's list of copyright infringer's, where do they stand? Is America even on their own list?

I'm gonna keep recording TV shows on my computer and transcoding them into AVC for my iPod. I'm going to keep ripping my CD's, and downloading songs and movies off the internet.

I am also going to keep adding (i.e. purchasing) CD's and DVD's I really want to my music collection.

If only the industry could get beyond themselves to notice that a dollar not spent in the first place does not equate a dollar lost.
Just because some kid downloads a crappy barely watchable cam version of a movie, which may or, most likely, may not be from Canada, doesn't equate to a $10 loss, if the kid can't afford to go see a movie in the first place...

I guess I can still count on the CBC for a balanced insight into these divisive issues, while the rest of the Canadian media seem to be lost causes - They are all taking a page from Fox News' "Fair & Blanaced" approach. I guess it must sell.
It's too bad, but a sad fact that this approach is usually enough to dupe a good majority of the populace into compliance.

PS I just happened upon this site today, and it's great!
February 13, 2007

MD said:

...
It's obvious to see what this is - standard propaganda.

Just curious what the effect of the proposed law would be on file traders; in the USA, the extortion is "you can't afford your own legal bills, even if you win." In Canada, the threat will be "You will be so broke paying OUR legal bills too, if we happen to win..." Does it set a minimum fine in the thousands, as in the USA?
February 14, 2007

Blaine said:

Web Developer
I\'ve always enjoyed going to the movies, but I\'m a big guy and I really despise sitting in theatre seats. Plus I hate paying $3.75 for a small soda, or $4.00 for water. So any talk about losing sales is about a lack of quality. A lack of quality in not only the environment of the once famous \"theatre\", but also of movies. Before I go to a movie now, I usually head online and try to find some reviews about it. Why would I waste my money when people that like the same things as me didn\'t like it? I no longer have to shell out the money for the movie and then find out it sucks (even though the preview was awesome). Everything said about alternative formats is true as well. I can watch movies with Comcast OnDemand any time, day or night, and record them to rewatch at my leisure for a very small price (usually $3.00 - less than the soda). The only benefit I get from the theatre is a huge screen and surround sound, but I don\'t even really need that to enjoy myself. So the real message is not just \"If you build it, then they will come\", but is \"If you build it with quality and show quality movies, then they will come\".
March 05, 2007

f4te said:

Pirate.
I have been downloading 0-day releases for about 6 years now, and i have not ONCE come across a camcorded DVD, i can't imagine the reason for video-taping a dvd, as you clearly have the dvd RIGHT there to copy!
April 19, 2007

Clemens said:

Lies, Damn Lies and Statistics
I am not a fan or supporter of the MPAA, but the numbers quoted in this article, besides lacking themselves in citations, are misleading. If I read Mr. Geist correctly, the MPAA claims Canada is responsible for 40-50% of all CAMCORDED pirate movies. Meaning that they would be responsible for 72-90 of the 179 camcorded movies. They do not claim Canada is responsible for 40-50% of all pirated movies. Therefore holding up the 179 figure as proof of catching the MPAA in a lie is disingenuous. And the AT&T study does nothing to discredit the MPAA's claims of the number of Canadian camcorded movies. It does illustrate that camcording movies should really be the least of their concerns, but that doesn't make their statement less true.

While I dislike the MPAA intensely, we need to be above reproach in our criticism and this kind of accusation without providing specific references makes all those opposed to the MPAA/RIAA look less credible. Someone with Mr. Geist's credentials should know better than to make unsubstantiated and unsupportable claims. The only way to beat the MPAA is to pummel them with the truth, anything else only hurts the case against them.
May 08, 2007

Shawn said:

...
Someone said they would be glad to download TV shows and movies but it may be a while before that's available. It's here now actually. Surprisingly sooner than I expected.

A great many TV networks are now puting their shows on their websites for free viewing and some even don't put more than a single advertisement in them! That blew me away and made my week when I was able to catch up on Jerico for free and legally!

More importantly though, Amazon has launched a new segment called Unbox. [ link ]. They sell TV shows for $2 USD and let you rent movies for $4 USD. I missed a couple Stargate episodes and Sci-Fi doesn't put episodes online so I was googling for a bit torrent cache of them when I stumbled across Amazon selling them for $2 each. I HAPPILY purchased every episode I missed and caught up. Once again, making my week.

Have faith people, there ARE people out there listening to our comments and creating a user centered media world. It's a slow process, but between free TV episodes on the network sites and Amazon's Unbox project, we've taken a huge leap towards a great world!

Amazon's Unbox not only allows you to rent DVDs via download, but also provides download access to things like a DVD special features after you purchase the physical disk and are waiting on it to arrive.

We've gotten so used to blind and stupid powers that be out there, that we seemed to have missed some of the great things that have actually happened recently.

Keep up the fight, the MPAA and others need to be schooled on real life out here from the consumer chair, but despite their lawsuits and public wrath, they are allowing some good things to happen and some problems are being fixed.
May 09, 2007

Shawn said:

...
I guess some people would still complain about things like Unbox because it's protected in the sense that you can only watch the content for a limited time and cannot keep them forever as your own. But This is where I differ from a lot of people out there. I couldn't care less about a TV show after I've watched it. So this limitation isn't even visible to me.

It is completely beyond my scope of understanding why anyone would want seasons of TV shows on their shelf to watch over and over again. I mean seriously, do you really have enough time and interest to watch 12 to 24 hours of old TV over and over? I could see having a couple great episodes, but not entire seasons.

Movies are another story, although not for me. I don't own very many movies and rarely watch a movie more than once. I'm in the minority there as well I know. However, the first step in our fight is download rentals and we've got that now. Download ownership will come as long as the download rentals go well and it seems they are.

To those who want their entire DVD experience to be without physical media, stay tuned, the day is coming. Despite how the MPAA sounds when they talk, they can't stand in the way of progress forever, nor do they really want to. They're just slow to accept change.

May 09, 2007

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