Chernin Sees Movielink as Key in Piracy Fight3 Nov, 2003 By: Erik Gruenwedel
Vowing that “our absolute future” is at stake, Peter Chernin, president and COO of News Corp., which owns the 20th Century Fox movie studio among other entertainment properties, on the CBS TV news program “60 Minutes” warned that increased illegal downloading of movies on the Internet will “wipe out” home video and television profits.
Chernin noted that at a recent summit of studio executives, a group of teenagers were challenged to find five movies -- four of which had yet to be released -- on the Internet. The teens found the films in less than 30 minutes by scouring numerous peer-to-peer file-sharing networks, including KaZaA and Grokster.
With more than 60 million people able to download audio and video content onto their computers, Chernin said the dilemma isn't confined to a minority group of idealistic crooks.
“That's a mainstream product,” Chernin said. That's not a bunch of college kids or … a bunch of computer geeks. That's America.”
Efforts by Fox and others to circumvent piracy through Movielink, a proprietary download service of select movies for a fee, would negatively impact video rental since consumers could avoid having to make trips to the video store, a concept Chernin said consumers “would love.”
Media analyst Phil Leigh said Chernin's stance represents a sensible approach to piracy and is not necessarily a death knell to rentals.
“There's three things the studios have to do to avoid being Napsterized,” said Leigh. “The first is to get into the market legitimately. The second is to get into the market legitimately. And the third is to get into the market legitimately. Everything else is second-order factor.”
He said the success of movie downloads on the Internet will provide a blueprint for video rental chains to offer their own services as resellers of content.
“They can start as a hybrid approach like Netflix … which is establishing a database for the day when they can offer movies direct online,” Leigh said.