Film Biz Can Learn a Few Things From the Music Industry When It Comes to Piracy

Film Biz Can Learn Few Things
Dan Doperalski for Variety

Thank God we’re in the music business. We’ve already been through the transition; we’ve already been pushed back to zero. We’re in an era of rebirth so strong that if you think the music business is in trouble, you’re not in it. Blockbuster acts make more money than ever before. Piracy has been eviscerated, killed by YouTube and legal streaming services, and from here on, it’s only up.

On the other hand, the filmed entertainment business, now shot on digital, is screwed. They thought they were better than us, that their fans respected their work and chose not to pirate it. What a bunch of hogwash.

The movie business’s worst nightmare just happened. A website known as Popcorn Time launched recently that’s basically a torrent site, and will be all but impossible to take down (though its founders did briefly, before it was officially rebranded as  Time 4 Popcorn). It allows you to watch everything, right now, for free — movies in the theaters, movies on homevideo, movies you can’t find anywhere else.

There was a hole and somebody filled it.

Film people were so busy protecting theater owners and cable channels and everybody else who paid for their product, the same way record labels protected brick and mortar retailers, that they forgot about the customers, who want a simple interface and access. Sure, if you’re a teen, you might want to go to the theater to make out and cause trouble, or if you’re an alta kacher you might go out of habit, but everyone else doesn’t understand the theater experience anymore. You mean I have to get into my car, park, and the movie doesn’t start when I want it to?

We’ve got what everybody wants in the music business: all-access streaming. YouTube is the music player of choice. It dwarfs not only CDs and MP3s, but dedicated music-streaming sites. This is also the problem of the labels, who wouldn’t let music streaming sites launch early enough, so YouTube got a head start, but the point is, we’re at the end of that road. The consumer is living in a land of luxury, and he’s lost all incentive to pirate. Can we get him to pay for dedicated streaming services? We’re gonna find out.

And now the movie business is gonna have to move forward, gonna have to deliver all its product, instantly, on demand. Windows are going to collapse, prices are going to come down, because the public now has an easy alternative.

Ain’t technology grand!

Not if you’re a traditional record company. Sure, you might make a ton of money off streaming in the future, but these companies have not configured themselves for the new reality, within which talent — and distribution — are king.

If you can’t access it, it’s like it doesn’t exist. But the music distribution problem has been solved. Listening to music is easy — the entire history thereof. If it’s not on the streaming service, it’s certainly on YouTube. If you’re still stealing, you’re a hoarder and need treatment. Why waste so much time to own that which is freely available? The only issue is what flows through the pipeline, what people choose to play.

And what they choose is superstar talent — the blockbuster syndrome.

Superstar talent may make less money off recordings than in the past, but the live business far exceeds the money it once made. And then there’s sponsorships/endorsements and privates and sync and so many avenues of remuneration that no one who is a superstar is bitching.

Thom Yorke isn’t bitching for himself, but for the theoretical people following in his footsteps. But anybody as good and big as Radiohead will have no problem making money in the future; it’s there to be made. Will they make as much as techies and bankers? Maybe not, but almost nobody does.

Including movie studios.

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  1. geri says:

    can bob lefsetz write an in depth article about how you tube and ;egal streaming services have killed music piracy ? i don’t understand. bob said “Piracy has been eviscerated, killed by YouTube and legal streaming services,” in his article. thanx !

  2. JackJ says:

    People don’t understand the theater experience? Captain America. $96 million. 3 days.

  3. Gary Brant says:

    Mr. Lefsetz’ less than insightful article barely scratches the surface of this pervasive and corrosive issue that effects both industries – movies and music. Piracy is a problem today, and will remain and accelerate as the age of digital distribution of content explodes in ways we can can only imagine in 2014.

    I am an inventor and in 1999 pioneered “biometric encryption”, or using the users’ fingerprint, voice or iris scan to secure access to content. Part of my research and development included a working prototype of my “Personalized Encrypted Disk” or “PED”, which was presented to among others, the RIAA, MPAA, Paramount Pictures, Warner Music and Universal Music Group.

    In summary, my “reprise encryption system”, with one fell swoop, completely eradicated the issue of piracy. It was a self-encapsulated solution that allowed for secure distribution – over the internet (remember this was 1999, long before Netflix or even the iPod) – by having customers use a wireless hand-held playback device, the iVue, which could either playback full length HD movies or music albums – and the iVue would enforce a simple method of authenticating the customer to make sure they were authorized to view/listen to the delivered content, and secondly, that under no conditions could said customer make an illegal copy or otherwise distribute the content by transferring it outside of the device.

    The leadership of the RIAA embraced the technology breakthrough and claimed that the iVue and reprise encryption system would forever change their industry – And the same affirmations were made by the MPAA and Paramount Pictures.

    It appeared for a time that my inventions would change the world – that pirates had finally met their match with a technology solution that could not be defeated. And it would not have been, the technology included a symmetric-key algorithm that was fully 21,000 bit and each unique key generated was applied to every frame of film (every frame of film had its own unique 21K bit encrytion).

    What defeated the deployment of the iVue by the studios *(the MPAA wanted to use it to deliver secure screeners to its Academy of MPA&S’ members for the Oscars), was not the technology, associated cost, or roll-out, it was the decision that came down that piracy was simply “part of their business” and that it was here to stay and they would just have to write it off like any other cost of doing business.

    Since 1999, the methods of film distribution have changed dramatically, now we are in the migration process of moving from film reels and optical projectors to digital files and electronic, digital projectors which simply load the precious studio files *(yes full-length features, IMAX and more to come), delivered by satellite or so called “secure networks”. The stakes have thus been raised astoundingly for the piracy of pristine, perfect digital content that need only be hacked once to reap $millions and perhaps tens of $millions in illegal profits.

    And so, the breakthrough that could have ended piracy of movies, that could have forevermore removed the worry of lost $billions *(yes $billions) when a movie is pirated, manufactured in the millions of copies as illegal DVDs and digital downloads, was set aside in favor of the studio executives simply and weakly waving a white flag in the face of the pirates, and laying down their defenses in defeat.

    • Ross Bryan says:

      Hi Gary. Appears you had a bit of a Cassandra moment there when trying to solve the piracy problem, and after committing serious amounts of time, no doubt money, and relationship capital. I heartily commend you for trying to stop the rot. I have also been looking at a piracy solution specifically for the download/streaming era which will doubtless dominate a large portion of content consumption in future. I drew a blank when reaching out to my alumni from Cambridge (UK) on the technical elements and wondered if you still had some energy for the fight? Not sure how you safely exchange contact details on this platform. Please reply or get in touch via my production company: Halyard Productions.

  4. Let me see if I got this straight…

    You’re writing that the movie business can learn from what the music business went through.

    I believe the premise is absolutely true, but everybody that is anybody in the movie industry already knows this to be true. So what else do you have to say —

    “They thought they were better than us…”

    Why when there is such a crossover relationship between movies and music would “we” ever think we were better than anyone in the music business?

    Oh, wait, I get it, you’re just trying to be provocative… just trying to get idiots with no time on their hand to respond.
    Well, okay, you hooked me, I don’t have the time, but I now admit I’m idiot for taking the bait.
    Just hope Bob Lefsetz@lefsetz you don’t regret having baited me…

    You write: “Their fans respected their work and chose not to pirate it. What a bunch of hogwash.”

    Exactly who are you referring to in the film industry who did not see that during the digital age that movies were being pirated. Does your use of “fans” somehow make your statement somehow more truthful? People in the film industry (I am a screenwriter and independent filmmaker) from day one of the digital age saw the piracy impact on films. I saw on it on the films I produced and I assure you I was surrounded by… everyone in the film industry!

    “Film people were so busy protecting theater owners and cable channels and everybody else who paid for their product, the same way record labels protected brick and mortar retailers, that they forgot about the customers, who want a simple interface and access.”

    Okay, just to get this straight, so the people who own theatres, the people who work in theatres they aren’t people too? Wait, before you answer – the people who count on their jobs that at theatre infrastructure is there, we in the movie industry who make movies are just supposed to ignore them… so that people like you… people you are advocating for can get less expensively made movies for free or 99 cents.
    Don’t you see there is an end to a system that only allows for a consumer to get everything for 99 cents and I believe it will not be where people get to enjoy big budgeted movies that only Hollywood makes on a consistent level. Is that where you want this to all end?

    “Sure, if you’re a teen, you might want to go to the theater to make out and cause trouble, or if you’re an alta kacher you might go out of habit, but everyone else doesn’t understand the theater experience anymore. You mean I have to get into my car, park, and the movie doesn’t start when I want it to?”

    RSF: Exactly how old are you,?
    Oh, I just saw your picture again and reminded myself that you’re a bald headed non-teen, and not on the creative or business side in the music or movie industry, but writing like a teenager doing a piece for the high school newspaper.
    Embarassing for you, but I will let you in on a secret — teens aren’t making out in theatres. That was like… when Steven McQueen starred in “The Blob.”
    When you write that teenagers are only interested in making out in movie theatres it not only reveals your age, it probably reveals you have a daughter or two and the paranoia you feel because your kids are entering the important movie age group of 16-25.
    When you talk about no one understanding the movie theatre experience, then maybe it’s a code that we should all be paying attention to what you’re really trying to say rather than what you are saying – maybe Variety has you as a hostage, strapped to a desk 24/7, for the last five years or so.
    The last dozen movies I enjoyed in a theatre everyone one in the audience was terrific. They laughed, shed tears and applauded at the end of the movies I paid to see.

    You write: “And now the movie business is gonna have to move forward, gonna have to deliver all its product, instantly, on demand. Windows are going to collapse, prices are going to come down, because the public now has an easy alternative.”

    You might be right with the above, though I still don’t understand how a wish list to balance your budget becomes info for an article on the present state of movie exhibition

    It certainly doesnt follow on demand that what happened with music will happen in movies. There’s a huge difference between how someone experiences a movie and how someone experiences a song. There a gap and that is what the studios and theatre owners have been working on to address over the last several years — making movies bigger and better, theatre experiences worth getting out and enjoying with a crowd of people, a shared experience, like a sporting event, or Broadway play.

    Even if I was to grant that many musical artists are now back on the road doing live performances, I will still point out that the live performances that have been a response to the collapse of the music industry are in many ways simulated by the response the movie industry has made to movie exhibition, making the experience of seeing a movie in a theatre a rare and unique experience that cannot be replicated by a movie watcher playing you tube on their home theatre.

    .

    How can you possibly make the leap from piracy of a song to the movie theatre experience? Instead of providing insight into the differences, and the changes, you provide only words that you hope will incite a response.
    And therein is where we’re both losers — I think you’ll end up with very few responses to your idiotic article.
    I grabbed the hook because I saw the logo of Variety as the bait.
    I find it so hard to believe that this is what Variety now believes is necessary to get readers.
    Screw information that is useful to readers who work in the industry… or readers who truly want to understand the industry.
    Apparently you are employed to write words with the sole purpose of provoking… a response.
    So you got at least one.
    However, I will now claim to be a pirate.
    I went after a once proud ship that always traveled with a treasure, but I’ve had to learn the hard the way, that there’s nothing below the deck, and there’s obviously a ghost crew manning the wheel.

    • John Shea says:

      Amen, Mr. Finney!

      Incidentally, Variety’s comment notifications are attributing Mr. Lefsetz’s article to the ever-mysterious Terry Flores. Once again I ask Variety, who is Terry Flores?

  5. John Shea says:

    “You mean I have to get into my car, park, and the movie doesn’t start when I want it to?”

    If Mr. Lefsetz is right, TV alone should have killed movies in the 1950s. Meanwhile, back in the real world sixty years later, box office booms all over the world.

    Sorry Variety. No sale. Next crystal-baller please…

  6. The US recorded music business has been flat from 2010 to 2013 with no growth, down to $7B from $12B. Meanwhile BitTorrent has 450m worldwide users (21m US users) and is forecast by Cisco to grow 170% in the US by 2016. Income to US musicians has dropped by 45% in the last 10 years. Internationally, entire countries have been lost to BitTorrent with essentially no music revenue from digital or streaming. Hopefully the movie business can avoid this fate. Are flat revenues something to crow about? Music has never been more popular. The availability of full-catalog music streaming service actually demonstrate that they DO NOT offset piracy. Only copyright enforcement will start generating any real growth.

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