David Pogue Explains 'How Hollywood Is Encouraging Online Piracy'

August 21, 2012
Source: Scientific American

Hollywood Piracy - It's A Crime

When it comes to piracy, Hollywood is on the attack. It's a tricky topic to discuss and one that the MPAA has the loudest voice in. An excellent post that I came across today by tech writer David Pogue takes another stab at piracy and this time goes after the studios themselves. Pogue has written a column for Scientific American titled "How Hollywood Is Encouraging Online Piracy". He succinctly, in about 600 words, pretty much nails the big issue with the movie industry right now that is keeping piracy as rampant as it is. For the sake of discussion, I thought it worth mentioning his column, and highlighting a few of his quotes.

Nothing compares to simply reading the full article itself, since it's a fairly quick read and gets right to the point. Here's where Pogue really gets at Hollywood and what they're doing blatantly wrong. Worth hearing:

"Yet perhaps most important, there's the availability problem. New movies aren't available online until months after they are finished in the theaters, thanks to the "windowing" system… None of the movie studios would talk to me on the record about this subject, so I can't tell you why so many major movies are missing. Obviously somebody, somewhere, objects to releasing the rights—a lawyer, a director, a studio executive…"

"The people want movies. None of Hollywood's baffling legal constructs will stop the demand. The studios are trying to prevent a dam from bursting by putting up a picket fence."

"And if you don't make your product available legally, guess what? The people will get it illegally. Traffic to illegal download sites has more than sextupled since 2009, and file downloading is expected to grow about 23 percent annually until 2015. Why? Of the 10 most pirated movies of 2011, guess how many of them are available to rent online, as I write this in midsummer 2012? Zero. That's right: Hollywood is actually encouraging the very practice they claim to be fighting (with new laws, for example)."

While I've always been a staunch supporter of the theatrical experience, I understand why piracy exists. And Pogue pretty much explains why here, and why it continues to exist nowadays. He really says it best: "Yes, times are changing. Yes, uncertainty is scary. But Hollywood has case studies to learn from. The music industry and the television industry used to fight the Internet the same way—with brute force: copy protection, complexity, legal challenges… Eventually all of them found roads to recoup some of their lost profit not by fighting the Internet but by working with it." Exactly. It's almost that simple. So why is any progress in that direction so slow? (The MPAA.) I'm not sure Pogue's column will shake up the industry enough to make changes, but more pressure like this can should only help encourage change for the better.

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It's a lose-lose situation. The current business model works well, but it inevitably encourages piracy. But if movies are made available online right away, the theaters will likely see a big decline in attendance. If I want to see a movie, I go to the theater. Otherwise, I can wait several months until the VOD or Blu-Ray release. Why is that such a difficult concept for people? Is it because ticket prices are too high? I agree. But just because I think milk is to expensive at the grocery store doesn't mean I would steal it. Piracy is theft - people do not get paid and revenue is lost when you watch a film illegally. That's less money for the studio to spend on their next project and less incentive to take risks. So the next time you find yourself wondering why the studio won't take a chance on a great concept (like "The Dark Tower" for example), just remember that maybe these issues had a small part in that.

John on Aug 21, 2012


How about people who don't have any other possibility to watch a movie?Say it's not showing in their country?Or it is censored by an opressive regime?Or they are serving in Afganistan?Or they suffer a medical condition which prevents them going to the cinema? It's not all black and white.

Those people on Aug 21, 2012


"The current business model works well" No it does not.If it did piracy would not be an issue.You can't erase it.To think that is either stupid or extremly naive,but prohibition of any kind does not get the intended results.Just look at history.Prohibiting alcohol brought about the rise of highly organised crime,prohibiting marihuana gives power to drug cartels and fills jailhouses with people who could have been contributers to sociaety instead making them outlaws,not to talk about the drain on the state budget which could have been spent on smarter things than fighting an uphill battle with criminal elements.Restriction of anything just makes things worse. They need to find a better solution.Sticking to the old models of doing bussiness no matter the costs is not good for anybody.And the costs is pretty damn high if we consider the slipery slope of censorship and prohibition.Force does not produce profit in the long run.Not if we want to live in a free society.

Rant on Aug 22, 2012


That's not the same thing at all. If you wanted to drink alcohol or smoke weed, you have to buy them. Here, no one is buying anything. Everyone's getting it for free. Yes, if everything were paid for, people may choose not to see it, in other words, not every download is a lost sale, however, if you compare the amount of time people spend watching movies they don't pay for, if illegal downloads were not available these people would be doing something else. If the pricing models were more efficient and less of a rip off, chances are, most of it will be back to watching movies, except, now everyone is getting what they deserve. Similar to music where people believed they didn't get their money's worth when buying an album when an artiste has filler, people don't want to pay for crappy movies, but the more they pirate, the more it hurts the movies that take chances. This is simply because franchise movies will have more willing people to take the hit and check it out rather than non-franchise films. Going by the most torrents downloaded in 2011, sure Fast Five and Hangover 2 still made a helluva lot of money and the potential conversion rate might add a smaller percentage to the overall gross but #3-#9 consists of Thor, Source Code, I Am Number Four, Sucker Punch, 127 Hours, Rango and the King's Speech. All of them have over 6m downloads which could potentially translate to (assuming 100% of these are converted as the potential of multiple people receiving the benefit of one download is extremely high as well which is unaccounted in these numbers) that's $48m more each. Ignoring the quality of the movies, this means that Thor would have made over $200m, Source Code and I Am Number Four over $100m and made over $50m for 127 Hours. I don't think I need to emphasize how much that difference makes to encouraging more adult animation (Rango), dramas (Speech-around $180m with this boost) and other more independent and creative fare (127 Hours, Sucker Punch, Source Code etc) Audiences blame Hollywood for not making better movies, but they are also to blame for not supporting these movies and instead going to see Transformers, Twilight and Pirates of the Caribbean yet again.

BK on Aug 22, 2012



-_- on Aug 23, 2012


You can't fight human selfishness. It's easy, free, mostly unpunished, and totally harmless to the pirate. I don't want to see it, but those people are just begging for web censorship. The net may be free to all, but when it's bringing harm to things here in the real world, that's eventually going to change.

OfficialJab on Aug 21, 2012


Yep,the allmighty buck under the pretence of respect for the artists,creators and whatnot(don't get me started on so called "protection of children against pedophiles" as an excuse to police the internet) will eat our right to free internet and freedom of speech . Yes I'm pushing it but basically restricting any kind of information (and movies are information in complex form (well some are pretty simplistic,most of them actually )) is censorship.Pirating is not the same as stealing,not saying that it is right under the rule of law or even morally excusable,but equating it to stealing physical objects is false.i'm talking of course about downloading stuff and not running a bussiness with pirated copies of said stuff. They,the industry should update their bussiness module and maybe they will have a chance of some sort of balance between profit and censorship.But I guess it's easier to influence politicians to pass stupid laws which in the long run harm us all.Hail the allmighty buck.

Those people on Aug 21, 2012


It's all about weighing options. I absolutely agree that more entertainment companies need to get into the 21st century to lower the numbers. However, it's disappointing to see those arguing against government censorship hiding behind semantics like "it's not technically stealing". You'd think the ones apparently being oppressed would be trying to push the spirit of a law instead of the letter. Normally the controlling, Orwellian power we're supposed to fear is the one twisting words, but as evil and self-interested as they're supposed to be, most regular people aren't any better. They just play the martyr while getting things for free.

OfficialJab on Aug 22, 2012


Most people who pirate a movie would never have paid for it in the first place. With that in mind, most people find downloading/streaming movies to be a pain. If it was cheap and easily accessible, some of those folks might opt to purchase it legally. The idea that you can stamp out piracy completely with things like PIPA and SOPA is ridiculous. That type of thinking will only encourage more people to pirate.

germss on Aug 21, 2012


Whoa now... I hope not. What good will that do?

Alex Billington on Aug 21, 2012


so, it's ok to steal something........ as long as you would never have bought it to begin with?....hmmmmmmm....that type of thinking sure as hell opens up a nasty pandoras box.

beevis on Aug 21, 2012


It's not a theft... it's only a look, at the whole product though. xD

oliveitor on Aug 21, 2012


I agree it's not theft, it's like reading a book in a shop, making sure you keep it in pristine condition and then putting it back on the shelf without buying it. Of course here in the UK we have organization dedicated to letting you legally borrow and read any book completely free and for some reason author don't complain but when people do the same with a film studios try to take them to court.

Andrew Coleman on Aug 22, 2012


what "shitstorm"? you're either a criminal or you're not......depends which side of the fence you're on. there is absolutely NO reason to agrue this at all - theft is theft.

beevis on Aug 21, 2012


Hmmm doesn't this have direct parallels to " Napster " so what business model came from that ? 99 cent songs , discounts on whole CDs or MP3 downloads , ability to buy from several sources , etc . Maybe we'll have to pay to watch trailers . pay to watch 10 min - hour-long segments . but then we can get a whole digital download for , $ 8.99 say .only playable twice ; duplicating ability blocked .Would've saved me from going out to see Total Recall ( somewhat of a waste ) . However , on the other hand , I'm not paying ANYTHING to see SWATH , as good as Charlize is in it . And I paid for and liked Hunger Games , but the DVD's not worth $15-20 . Because of the Napster precedent this ISN'T an absolute criminality issue . Or did you miss the point of the article you're commenting on ? I'm sure wherever you live , there's some "law " that's on the books , but never enforced by your " police " . So how did you " break " it ? The sodomy laws of American ( mostly Southern ) states comes to mind here ( u going into bedrooms ? ). So maybe Hollywood falls victim to the no-Police-state view of democracy . Regardless , like good capitalists , they better figure out the way to make the most money , from all sources .

Dominic A on Aug 22, 2012


This seems appropriate:

It's me on Aug 21, 2012


Spotify (among other services) upended the music industry by offering thirteen million songs for free streaming with ads. Ten bucks a month got you an ad-free experience with mobile access, and as it so happened, lots of people, including myself, bought into it. The labels aren't making as much money as they would if people were buying individual albums or songs...but these services ARE making paying customers out of former pirates (many people I know included). Hollywood doesn't have to put up every single movie in theaters for streaming for ten bucks a month, but I know that a lot of people would be very much inclined to rent, were these movies quickly available on Redbox.

the_situasian on Aug 22, 2012


Just copying an interesting comment from the original source by user silirat: "The reason that the studios aren't moving over to a more modern business model is pretty straight forward. Most of the decisions makers are employees, who work for the shareholders. If a significant period passes (i.e. 6-12 months) where there is little profit, or even worse, a loss, then those decision makers will be out on their asses. Now, to convert over to a new busines models igoing to take time... 12-24 months. During that time, not only will profit be impacted, but there is also the significant chance of loss. In the end it will even out and go back to normal, but by then, the decision makers will have long since been fired and replaced by the shareholders. So, simply enough, the decision makers are unwilling to risk their jobs in the name of progress. The industry and the company would survive the transition, but they won't, so they'd prefer to keep s in the stone age."

shitstormabrewin' on Aug 22, 2012


The movie "Bachelorette" is on iTunes for rent for $10, and it's not even in theaters yet. I could watch it instantly and comfortably at home! I thought that was pretty awesome. Sucks for theaters though, which I guess means ticket prices will spike again. Damn it.

fem!anon on Aug 22, 2012


I wouldn't watch it. It's not worth it.

Carpola on Aug 22, 2012


Ticket prices are too high. I see going to the cinema as a twice a year event, I really can't afford to do it. Often the cinema is full of soggy seats and old popcorn and rats and zombies too. It's a strange one, I've watched all of Miyasaki's movies on subbed downloads because at the time it was impossible to get them where I stayed, but as soon as they were available in my region I bought them. Obviously Miyasaki is different say, compared with Michael Bay, his films should be free to see, in fact, the studio should pay you to watch them.

Carpola on Aug 22, 2012


That's because film budgets are too high. You know most cinemas don't turn a profit on the ticket sales, most of the cost of the ticket goes straight to the film studio and the rest barely covers the cost of turning the lights and air conditioning on. That's why they charge such a ridicules price for popcorn and sweets. "But successful films make hundreds of billions in profit" I hear you say (or rather the voice in my head) while that's technically true remember a film doesn't just have to make back IT'S budget back but also has to cover the cost of the other films from the studio that flopped and the cost of the all the projects in development that eventually get canceled and cover the cost of all the employees and desk workers that keep the studio running not working on a specific film. Hollywood is an expensive industry which is why films cost so much to see. Of course I think they do NEED to spend so much for a film to be entertaining but that's a topic for another time.

Andrew Coleman on Aug 22, 2012


my aunts husband is in the biz. he does movie props, and has told me of some of the outrageous amounts of money the studios pay for some of their props like a $7,000 coffee maker. not some uber fancy special thing, but a walk into Xmart and buy a 30 dollar coffee maker, coffee maker. For 7 grand. that's what tells me they are effing nuts.

dizmalmazes on Aug 23, 2012


True but remember it has to fit the overall design and aesthetic of the film. Films really are designed to within an inch of their life, everything has to fit the color scheme, tone and style the director's going for. Also remember, even if they wanted to, they couldn't just walk into a shop and buy a coffee maker without paying licensing to the company who made it and the person who designed it, as well as get permission to film any logos or branding that appear on the coffee maker itself. It also has to stand up to the hard life on set and may have to cope with different temperatures (those lights can get pretty hot) and situations that a regular coffee maker wouldn't. The person who designed a regular coffee maker you find in a shop probably got paid at least $7,000 but that cost is split up between the millions that are sold, on a film they have to design one for a bespoke purpose so it seems pricey. I'll agree it get's pretty insane and there are definitely companies that overcharge (there are also people who are totally abused by the studios and vastly underpaid) but there's reason for it.

Andrew Coleman on Aug 23, 2012


Hollywood is run by this motto now, Quantity over quality. Crank out as much crap as you can and we'll see what sticks. Every other movie that comes out is either squeal prequel or remake or shitty reboot. Very few original ideas and movies. There is so many books and cool story's and real events that have taken place in our history out there that can be made into movies. What are studios green lighting shitty adam sandler movies. When are they gonna learn?

Davor Desancic on Aug 22, 2012


You say every movie is a prequel, sequel, remake or reboot, and whilst I myself have grown tired of that, the fact you and everyone else continues to see those movies instead of other original more groundbreaking ones, is why they exist in the first place. Now obviously not every non-sequel movie is going to be good, but similarly not all sequels are bad. However, you talk to the 99% and every year they say the same thing: I am only interested in going to see Batman 5, Spider Man 7, Pirates 28, Transformers 39 and so on which is fucking disappointing considering every franchise started with an original flick at first.

BK on Aug 22, 2012


The Avengers is one of the most successful movies of 2012 (and in terms of box office, of all time), yet it was released in Japan just a few days ago. It was released in most parts of the world back in April. If you were a Japanese fan, would you have waited this long to see it? I wouldn't have. I'm all for simulataneous release of movies all over the world; that helps combat piracy. But most important of all is to release good product. I wouldn't pay full ticket prices to watch crap, and wouldn't even watch if it was free on TV...

erictan on Aug 22, 2012

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