A study on the taping and piracy of pay-per-view movies released Tuesday by the Video Software Dealers Assn. is drawing more fire from PPV companies and the cable industry.
The VSDA study, which claims that homevideo revenues contribute more to Hollywood’s bottom line than all other distribution channels combined, reports that signal theft from pay cable and pay-per-view causes industry losses to the tune of at least $ 242 million annually. It says that in 1992, PPV revenues were $ 184 million, less than the amount lost to stolen programming.
“Theft of pay-per-view programming is massive and taping of PPV movies is widespread,” said Don Rosenberg, VSDA executive veep, at a press conference in Los Angeles. “Both of these cut into not only homevideo revenues, but Hollywood’s (bottom line).”
But the survey has been the subject of much debate between PPV proponents and homevideo suppliers, each trading missives about the future of their respective industries and conclusions reached by the survey.
In a preemptive move last Thursday, PPV programmers Viewer’s Choice and Request Television challenged the unreleased VSDA survey, claiming its figures were flawed (Daily Variety, Nov. 8).
“Their claim that signal theft is widespread is ludicrous,” said Jeff Bernstein, spokesman for Request Television, a Denver-based supplier of pay-per-view programming.
The National Cable Television Assn. jumped into the fray late Tuesday, challenging the VSDA report as “basically flawed” and claiming many of the conclusions it reached were designed to support the homevideo industry’s stance on pay television.
“This is a thinly veiled attempt by (homevideo retailers) to weaken the PPV business, their only viable competition,” said Decker Anstrom, NCTA acting prez.
“A close look (at the report) reveals poor research methodology, unfounded assumptions and grossly inaccurate extrapolations.”
The VSDA report indicates that 44% of PPV viewers tape 90% of the movies they order, while 43% of PPV movies are shared with friends, neighbors and relatives.
Thus, Rosenberg claimed, the loss of these subscribers from the homevid revenue stream could cost program suppliers between $ 75.8 million and $ 164.4 million each year.
The VSDA believes these trends will only become exacerbated if and when the emerging technologies and the 500-channel superhighway arrive.
“If the numbers are so pervasive now, imagine how they will be when the selection and the cost of pay-per-view increases,” said Rosenberg.
NCTA claims signal piracy is not as rampant as the VSDA would have the studios believe, and so-called addressability, the technology used to deliver PPV programs, is difficult to steal.
The NCTA, however, did not offer its own figures on lost revenues, citing only its comprehensive programs to combat piracy through legislation and coordination with law enforcement officials.
Rosenberg says VSDA stands by its survey, noting that the research was conducted by a reputable firm, Cambridge Associates, and the report’s conclusions are supported by the studios.