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Is pic biz uploading a world of trouble?

WASHINGTON — As Sony Pictures and perhaps other studios plan to bow commercial movie downloading services over the next six months, the amount of illicit movie traffic on the Internet is growing rapidly.

According to Boston-based consulting firm Viant, some 350,000 to 400,000 feature films are changing hands online every day, up from about 150,000 a day in 1999.

And that doesn’t include porn.

Viant has been monitoring traffic over IRC, the Internet relay channel, where most of the pic swaps occur. According to Viant technology officer Andrew Frank, the actual number of attempted downloads is far higher than the reported numbers, but many attempts are never completed because of technical difficulties.

“It’s not nearly as easy as grabbing an MP3 file off Napster,” Frank says. “The 350,000 to 400,000 is our estimate of completed transfers.”

While Frank says Viant is still working to refine its estimates, the studios seized on the preliminary numbers to push its case for strong copy protection standards on the Internet.

At a Digital Download conference sponsored by the Consumer Electronics Assn. in Washington last week, MPAA exec VP Fritz Attaway cited the Viant stats as evidence of a threatened “Napsterization” of the movie business.

“That number could reach a million movies a day by the end of the year,” Attaway declared.

Of particular concern to the studios is the right to encrypt legit downloads so that the files cannot be passed freely from computer to computer. That issue is before the U.S. Copyright Office, which is scheduled to issue a report to Congress May 1.

About 70% of the illicit movie files online consist of current theatrical films, according to Viant’s data. The rest come from VHS cassettes or DVDs, which requires hacking the encryption codes first.

Most of the current theatrical films appear to be taken from digital screeners that have leaked out of the legitimate post-production process somewhere along the way, or in some cases, “telesynchs” — which are usually done right in multiplex projection booths with the digital audio track taken from the sound board.

Format of choice

Only a small number appear to be so-called screen-cams — the in-theater camcorder shots that make up the bulk of bootlegs on the street.

“Most of those are up and down pretty quickly, because better quality copies come along,” Frank says.

The most popular digital compression format for movies online is DivX, which Frank called “the MP3 of movies.”

DivX is an underground format based on a program “liberated” from Microsoft, although DivX Networks is now trying to go legit by developing a second-generation compression format it ultimately hopes to license to studios for use in commercial systems.

Despite the high number of illicit transfers going on, Frank says he doesn’t think the online situation is yet hopeless for the studios, especially if Hollywood moves quickly to commercialize the download market (Sony Pictures is a Viant client).

“One of the things that surprised me about what we found is the extremes people are willing to go to to get movies this way,” Frank says. “It’s not at all easy to do.”

Among other things, pirates often have to transfer the audio and video tracks separately and then resynch them, which takes some technical expertise.

About half the people regularly downloading movies are also using slow, narrow-band Internet connections, according to Viant, which can take a week or more to download a single feature film.

“They just cue them up and wait,” Frank says. “It’s really amazing.”

If a portion of that appetite can be captured by legit online operators, movie downloads could prove to be solid business for the studios.

Frank also thinks online sampling could have significant promotional advantages.

” ‘The Matrix’ was about the most popular movie we’ve seen online, but it also went on to be a huge seller on DVD and VHS,” he says. “So some of this activity could actually be driving sales. Certainly the (porn biz people) think so. You see them starting to introduce their films into these forums on purpose.”

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