Pirates hiding behind legit facade

Paramount exec details new downloading fears

The studios’ problems with movie piracy are deepening as peer-to-peer sites are increasingly replaced by cyberlockers and sites that link to purveyors of illegal content, a top Paramount Pictures executive said.

Many such sites portray themselves as legitimate vendors, enticing consumers to buy subscriptions to pirated movies and advertisers like CVS, AT&T and even Netflix to place ads.

Internet-connected televisions and services like the upcoming Google TV are likely to make the piracy problem still worse, according to Christopher T. Carey, exec VP of worldwide technical operations for Paramount Pictures.

“We’re looking at a statistic that 500 million people will be able to view this content,” he told attendees at SMPTE’s annual technology conference. “Piracy is no longer just in the college room.”

Carey gave a live demonstration of how a consumer, simply using Google, could with several clicks pull up near-DVD quality pirate copies of movies. With Google TV, practically anyone will be able to easily access such content. “We’ve got to ask Google to be more mindful of what they allow people to do and present,” he said.

Many of the offending cyberlockers — some of which are among the top 20 most-accessed sites on the Internet — didn’t exist a year ago, creating a mushrooming threat for the movie business.

Cyberlockers are websites where consumers can securely upload personal information. Peer-to-peer involves passing information from one computer to another and often involves multiple consumers for a single song or movie, making tracing the source even more difficult.

MegaUpload, one prime cyberlocker offender, gets as many as 73 million visitors a month and is run by a “hacker” in Germany who was convicted of insider trading, Carey said.

“There are potentially really bad guys in this space,” he said. “That’s very important in educating consumers: They could potentially be participating in organized criminal activity.”

That’s particularly problematic for consumers paying by credit card whose identities are being siphoned overseas to questionable people.

To win over consumers, such sites as Movie25.com often download IMDb information or other mainstream sources to give themselves a patina of respectability. One site even posted a fake seal of approval from McAfee, the cybersecurity software concern.

To encourage consumers to pirate content, some sites offer “rewards” to subscribers who upload pirated content, further blurring the line between legal and illegal.

Carey thinks going after the pirates, not the consumers, is the only viable long-term strategy, noting that it’s not a viable business strategy to “sue your own customers.”

A bipartisan bill in the Senate would make it easier to shut such sites down. The studios also have increasingly sophisticated tools for catching pirates, including watermarking, digital rights management and night-vision goggles to catch criminals in the act at movie theaters.

For its part, Paramount has 200 Internet distribution deals in 25 languages covering 750 titles in its library as the studio seeks to find new business models for making money from home entertainment. But they depend upon shutting down the pirates for success.

“The thing is, I can’t come up with a pricing model that competes with free,” he said.

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