The MPAA's Carrot-and-Stick Approach to Piracy7 Nov, 2004 By: Kurt Indvik
Last week, the Motion Picture Association of America (MPAA) made big news when it announced it was going to start suing individuals who swap pirated copies of movies over the Internet.
Now, I have been pretty much negative on the recording industry's similar tactics in the past, but here I think Hollywood has a more legitimate leg to stand on in terms of this fairly aggressive action against its own consumers. OK, go ahead, call me a flip-flopper, 'tis the season, after all.
Here's my reasoning — and it has nothing to do with the legality of the issue, because both the music industry and the film industry have the right to take legal action against any file swapper of copyrighted material, no matter how small. But in the music industry case, it failed to acknowledge the music download phenomenon as a truly new paradigm in the consumption of its product and basically refused to offer customers a legitimate alternative. (I won't go into the industry's other missteps that contributed to the downloading phenomenon such as not reducing CD pricing in the face of DVDs, and the failure to build more quality talent instead of drowning the market with one-hit-wonder formulaic acts.) Instead it sought to simply shut down what it perceived as a threat to the status quo business model.
After focusing on the file-sharing services and the legal hullabaloo that caused, the music industry then started going after the consumer directly, which arguably caused more public relations damage than the effort has probably been worth. Of course, things have changed in the 12 months or so with the advent of legitimate online music sources, and while the music industry continues to pursue legal action against illegal file swappers, the industry seems more engaged in offering consumers a choice instead of simply trying to club the online music industry into submission.
Hollywood, however, has had the luxury of having been able to watch the music industry and learn from its many mistakes. It's no secret studios are ready and willing to distribute their product to consumers in as many financially viable ways as possible. Thus, services like Movielink, CinemaNow and Movie Beam have appeared on the market and will likely continue to grow as demand grow. So for those who want a legitimate opportunity to access movies online, the studios are holding the carrot out there. Only now is Hollywood coming out with the stick. And with good reason. The film business already loses an estimated $3 billion a year from the physical piracy of movies. More importantly, as high-speed Internet connections grows, as the media PC begins to penetrate the market, the ability for consumers to more easily download a movie file and store it on a hard drive and then distribute it to their TV or other devices is on the horizon. The MPAA must figure that now is the time to establish the ground rules for consumers, that the online movie business is not going to be like the music business.
While it's been argued among critics that the legal actions taken against music file traders has not been effective in stemming the tide of illegal music file trading, perhaps the MPAA's actions come a little earlier in the game and, in concert with other marketing and public relations efforts it has already been doing for several years now, these promised legal actions might be an effective tool in steering people toward legitimate online downloading activities when it comes to movies.
We'll have to see how consumers respond.