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.