Pirates set sail toward TV shores

Trafficked skeins on peer-to-peer networks growing

It turns out pirates like TV, too.

The television biz is starting to tune in to the first signs that it’s not just movies and music being downloaded online.

Popular TV shows ranging from “The Family Guy” to “The Sopranos” and even the pilot for “Friends” spinoff “Joey” are being trafficked on peer-to-peer networks in growing numbers.

That’s creating concern among execs whose networks are reaping increasing revenues from ancillary outlets such as DVD sales, pay cable subscriptions, video-on-demand and foreign syndication — all of which can be dramatically impacted by piracy.

“Ancillary revenue streams for TV are a recent phenomenon, so people are just starting to wake up to this problem now that real money is at stake,” says Ron Wheeler, senior veep of content protection at Fox.

He should know.

In a recent week, Fox’s “The Simpsons” was the most frequently illegally downloaded TV show on the Web. It was downloaded one-third as many times as the top movie, “Spider-Man 2,” according to Los Angeles-based Big Champagne, which tracks online downloads for the entertainment biz.

In fact, that Fox toon and “The Family Guy” have been the most popular pirated shows for some time.

That’s in part because the digital files of animated shows are considerably smaller than live-action, meaning 10 “Simpsons” segs can be downloaded quicker than an hour of “CSI.”

But even live-action shows are smaller than movies, meaning they can be downloaded in as little as 10 minutes.

Equally threatening may be the number of bootleg DVDs hitting the streets made from downloaded files. A sizable chunk of the 52 million discs the MPAA seized last year contained TV shows.

“The Internet is an accessory to professional pirates who take video off the Web and then burn DVDs or VCDs and sell them on the street,” says Eric Garland, CEO of Big Champagne.

With nearly all its revenue coming from subscriptions and DVD sales, HBO is the network most affected by piracy. As such, it’s working with cable MSOs and consumer electronics manufacturers to make its signal harder to steal. Nonetheless, episodes of “The Sopranos” will turn up on the Internet the day after the show is broadcast — and full seasons are online months before the DVDs reach stores.

Major broadcast nets also are concerned: NBC feared early copies of the “Friends” finale would leak and hurt both ratings and DVD sales, so it paid for the costly measure of changing distribution equipment so the feed to certain affiliates and cable providers couldn’t get out.

But no matter how much protection is placed on the digital side, analog signals can always be converted into digital form. Most TV signals are sent with minimal or no content protection. Even the much heralded “broadcast flag” that will be included with digital TV signals can be easily broken by hackers.

“We still have the problem of the analog hole, which is why we started to insert code into our signals that tells compatible devices like DVD burners to respect our rules on how many copies can be made,” says HBO’s chief technology officer Bob Zitter.

But such codes only work with new devices that recognize them; older ones continue to make stealing easy.

Still, the downloading of TV shows hasn’t caused networks to panic just yet: While the numbers are growing rapidly, they don’t come close to those for movies or music files yet.

  • In terms of unique users, only 4.8% are swapping TV files online. There are on average 220,000 people swapping TV files at any given time. It sounds small, but it represents a significant increase over previous years.

  • Of all the files being swapped on the Internet, film outnumbers TV nearly 5-to-1: only 0.4% is TV. Films make up 2.3%. The rest is music, porn, photos and other forms of media.

“This gets less attention because people care more about ‘Spider-Man 2’ than ‘Six Feet Under’ and music piracy is still more popular now,” says John Malcolm, the MPAA’s senior veep of worldwide antipiracy operations. “But as we end up getting better compression and more broadband penetration, TV’s going to have the exact same problem music had.”

The fear of a repeat of the music piracy problem is exactly what’s getting TV execs to start circling the wagons.

“The impact to television production and distribution can be severe, as financing is often based upon expected revenues via multiple distribution outlets over time,” says Darcy Antonellis, Warner Bros.’ senior VP of global antipiracy. “Piracy can significantly impact those projections and make the difference between greenlighting a production and not.”

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