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Movie Piracy Claims More Fiction Than Fact

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Monday February 05, 2007
My weekly Law Bytes column (Toronto Star version, homepage version) examines recent claims that Canada has become the world's leading source of movie piracy. The column finds that a closer examination of the industry's own data reveals that the claims are based primarily on fiction rather than fact, 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).

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.
Comments (14)add comment

Michael said:

...
Are we surprised that the industry that sues its customers also lies? I think not.

I haven't bought a new CD or DVD in a couple of years, since these assholes declared war on their customers. Before that, I was happy to buy their stuff, on a regular basis. Just say "NO".
February 05, 2007

JohnB said:

...
What a devastating critique.

One can only hope that those responsible for the upcoming amendments to the copyright act have an opportunity to read your commentary.
February 05, 2007

No One said:

Mr
All of your claims are unsubstantiated and make even less sense than the Film Industries. I think I'd believe a study from the MPAA on camcord sources over one from AT&T. Grow a brain.
February 05, 2007

Arthur Bennett said:

...
I love how you base your story on data from 2003 and 2004. Think possibly things may have changed since 2003!?!? Last time I checked AT&T was not a film company (or a body representing film companies). Stop spewing crap you obviously know nothing about.
February 05, 2007

Todd said:

Almond
Previous posters No One and Arthur Bennett, you are either obvious shills for the entertainment industry or off your meds. Grow a brain.
February 05, 2007

db said:

stats are to justify the laws they want
the 'stats' provided by the MPAA are only there to accomplish one thing, attempting to justify the laws they wish to have passed.

As for the gentleman who would take the MPAA's word on 'camming' stats over anyone else's stats. The MPAA's ONLY job is to make money for it's owners, therefore anything and everything it does is biased to favour what they want. If it wasn't the employee's would not be working their very long. Taking their numbers would be akin to allowing the wolves to count the sheep to see if there were any missing. I assume you'd also take big tabbocco's numbers on health risks over an independant study as well?
February 05, 2007

Michael said:

...
Interesting response from the irrational rabid ones who would limit both my right to buy used objects and my right to suggest that customers vote with their wallets. What, are those options against the law now, too? Great world you have going: you MUST buy things, and you must buy only NEW things.
February 05, 2007

mhaman said:

...
"Great world you have going: you MUST buy things, and you must buy only NEW things."

and, you can only buy them from one organization too! And, they can demand that their own artists sign over their copy rights.

If you want to support the MPAA, do so. But for myself, I prefer to give my cash directly to the artists whenever possible, and not the thieves between me and the artist.
February 05, 2007

Mr. T said:

...
I guess Mr. TMW Geist has grown tired of jumping up and down on the music industry and now has his sights set on film. No surprise.
That said, all one has to do is go to the Pacific Mall in Markham to see how rampant piracy of movies in this country is. All the latest releases are there, usually for $4 a copy or 6 for $20.
How can this actually be rationalized away? I'm a big fan of the posters on this site that say: "I didn't get the movie experience I wanted, so that makes it okay for me to steal it." I love the logic. I'd like a BMW 5 Series, but I find them a touch out of my price range. So I guess, using the logic of some on this site, I'd be justified in stealing the car.

Movie theatre revenue in Canada is down significantly versus the U.S. This certainly has something to do with overall quality, but I think it also has to do with the ability to get first run movies for a few dollars by buying them on street corners or flea markets or malls.

Will Copyright changes impact this? Probably not. But a few stiff jail terms or massive fines might make some think about it twice.
February 05, 2007

Simon said:

...
I have just read this article on the BBC website in the UK, and have to say that there is a point here, and whether it is right or wrong to copy these films, the fact is that nobody bothers to camcorder the 1200 movies that didn't break through to be huge successes.

How much is the industry wasting, making films that people don't want to see? it is noticeable that profits have increased in years that prosecutions have taken place, but not so interesting when you consider that it also coincides with the release of films that people actually want to see. I seem to remember seeing Pirate of the Caribbean 2 doing pretty well at the box office and that got pirated, now that it costs me close to 25 ($50 us) to get the "cinema" experience I tend to be a little more selective about the films I choose to see. Maybe the industry should spend a little more on plot development and a little less on its customer relations approach!!!

And Mr T. are you honestly comparing a BMW 5 series with a camcorder copy, maybe if it was a 5 series with a barely working engine, flat tyres, and the springs poking through the seats, that would be a fair comparison!!
February 06, 2007

J. Harvey said:

...
Camcorders are sensitive to near infrared (like used with remote controls), whereas human eyes are not. It would be extremely simple technology for the theatres to project near-IR images onto the screen to confound camcorder carrying movie pirates. The near-IR might be used to confuse the camcorder autoexposure, project anti-piracy messages (that would be funny), or obscure critical scenes.

The humans watching the moivie would be none the wiser. The pirated copies of the movie would be ruined at a critical part of the movie.

The only downside might be an eventual Battle Of Wavelengths as the pirates try to use optical filters to remove the near-IR.

If you want to see the effect, then camcorder a remote control as you press the buttons.

February 06, 2007

MOMPAA said:

non-common citizen
The common person does not realize that the unsubstatiated claim of the MPAA losing money due to piracy and filesharing (which they incorrectly group with piracy) is made up. In order to make themselves seem more credible to the common person, to add insult to injury, **AA use the clichéd technique of throwing numbers into the mix. The MPAA propaganda Modus Operandi is composed of two things in regards to insulting good sense: the injury and the insult to it. **AA want people to believe the incorrect assertion that each and every person that buys pirated content or even has content shared to them would have paid the full price to obtain the **AA sanctioned copy if those two avenues weren't present. To add insult to injury, **AA claim that the person who buys pirated content or even obtained a loan or copy from a friend committed theft. However, if someone does sell non-**AA sanctioned content to others, that money belongs to the **AA; this is the only act that is related to the concept of theft. In each of these cases, the **AA has no way of feeling, more or less, the impact directly from persons engaged in these activities. If someone broke into your house and stole items you use everyday: TV, microwave, food, car, etc. You would feel that impact directly as you cannot use these items you need anymore. Along with the insult of having your premises invaded, you lost items that will impact your well-being and the ability to survive in society. If you made "backup copies", you might notice that you have been robbed in one sense, yet in another it didn't impact your ability to survive. If someone is to steal from the **AA (grouping the artists with the "others"), he/she would have to take all possible originals and copies and usurp total control over them. Well, this hasn't happened because somehow the profits of the **AA has not only avoided becoming zero or even decreasing or double-plus even remaining steady but are actually increasing ... to add insult to injury. You cannot gain in profit and lose money at the same time. Even though this is common vernacular, "losing some money yet still gaining profit"; the vernacular is misleading. In small business, the owner may be able to recount times when he/she felt that a customer would have paid for a service, yet something happened and the exchange of service/product for money did not come to fruition. The owner would say, "money lost there"; however, a more correct statement would be, "potential money lost there". The owner doesn't really know the thoughts of the customer. The customer did not probably intend to purchase in the first place, but was probably "leading on" the owner. The only "potential for money" lost was the time wasted. And only insofar as the owner's time may have been spent in another exchange with another customer...possibly! This is too much of a philosophical stance, yet the **AA would like for the common person to fall for their ploy in grouping themselves with business owners under a similar scenario mentioned above. Afterall, the only claim of time/money lost that can be substantiated beyond a figment of prediction and potential is the time/money the **AA waste themselves in trying to interfere with the sales of pirates and the activities of filesharers. But to make up for that, the **AA ruin the lives of pirates and even filesharers, to add insult to injury, by suing them for outrageous sums of money and causing them to be imprisoned. The message that is being relayed is not so much a respect for copyright, but that common citizens are second-class to corporations -- common citizens have their lives ruined based on predictions, hypothetical numbers, potential profits, not on things that can ever be substantiated by fact, to add insult to injury. There is no way of knowing with reasonable certainty, that each and every person who purchased a lower-priced content from a pirate would have purchased a full-priced **AA sanctioned copy if the pirater were not present. In addition, there is no way of knowing with reasonable certainty, that each and every person who even received a loan or copy from someone would have bought a full-priced **AA sanctioned copy if the sharer weren't present, to add insult to injury. The **AAs are not mass-population mind readers. A necessary requirement for their formula, "our money lost to piracy [they include filesharers and friends that loan to others in this category, and, to add insult to injury, all are labelled thieves] = xxx billion dollars". This "statistical statement" propagandized as fact requires that they are able to read the mind of every person that has access to their content. Hopefully, **AAs are not that depraved enough to include people that don't have access to their content! Nonetheless, we do not know because **AAs still have not given us the data and the methods of ther interpretation to this day as any reputable peer-reviewed journal would require in the science community so we can see how **AA arrived at those very incredulous-based statistics! And all this in the face of ruining peoples lives based on their hypothetical numbers! To add insult to injury! Well the simple point is this, their statistics on "money lossed due to piracy" are -- FAKE!

This is not the way to win the hearts and minds of people, but certainly is the way to make the common citizen respect copyright law even less. Maybe that is their ulterior goal, the consequence being to crush the small guy who choses not to join the **AA in America and, to add insult to injury, abroad.
February 07, 2007

Wayne said:

...

You know the best movie I saw last year was produced for a grand total of 17,000 Euros? Yes, Star Wreck. I can't think of anything else that I saw last year that was worth watching.

Oh, I did see some classic stuff - just had to grab "It's a Mad, Mad, Mad, Mad World" when I saw it. Yeah, I bought Ghostbusters too. And Terminator. And The Sea Wolves.

But the new stuff is absolute crap. It's just like most of network TV - we have 100 channels on cable, and only a couple of them have anything that's worth watching - A&E being high on my list, as is Discovery. CBC I only watch if the Leafs are playing, and not even then most of the time.

I don't trust the MPAA's numbers, since they won't provide the data that they used.
March 05, 2007

norbert said:

stop stealing
PLEASE STOP STEALING. It doesn't matter if you steal from a rich man or a poor man. You still stole it!

June 03, 2007

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