For-Profit, Illegal Movie Download Sites Threaten MPAA

vossman77 writes that BitTorrent is no longer the MPAA's enemy number one. They are now more concerned about illicit, for-profit movie download sites. This reader adds, "Just a thought, but maybe if the studios offered a low-cost, for-profit, legitimate download site without DRM, they could receive the profits at the expense of the cyberlockers." "Movie fans downloading free pirated films are no longer Hollywood's worst nightmare, but that's only because of a newer menace: cheap, and equally illegal, subscription services. Foreign, often mob-run, businesses aggregate illegally obtained movies into 'cyberlockers.' Cyberlocker-based businesses operate from Russia, Ukraine, Colombia, Germany, Switzerland, and elsewhere. ... Hollywood movies are made available via illegal for-profit sites within days of theatrical release, while the advent of global releasing now allows the proliferation of individual titles into an array of language dubs within the first month of a theatrical debut. ... When movies are released on DVD and Blu-ray disc, the sites upgrade the quality of video offered from camcorded images to pristine digital copies. 'Sometimes these sites look better than the legitimate sites,' Huntsberry said. 'That's the irony.'"

Comments

No companies listed...

[Kitkoan]

I wonder, are sites like MegaVideo part of that list? I have a friend who told me about that they canceled their tv subscription and bought a MegaVideo subscription instead since they can watch even more and when they want. Wonder which sites are most likely to be a part of this list?

Reminds Me of AllOfMP3

[eldavojohn]

In college, a friend of mine had found AllOfMP3.com and diligently purchased hundreds of dollars worth of songs. When albums are ~ ten cents and legit, why not? He had assumed that because technology was so wonderful, someone had finally figured out how to eliminate all the middle men in the process of making digital music. So I investigated and showed him where the servers he downloaded from were located (Russia and Germany) and then pointed out how their local laws allow them to do this without rewarding the artists in anyway. He stopped using it but, like the article said, claimed it was worth the extra money to get the real thing with correct track labels and a perceived level of legitimacy. Like, he saw himself as not at fault legally ... the seller is the one who should get punished.

Sure opened my eyes to the problem of global and local laws surrounding copyright that over reaching blankets like ACTA have tried to address. Basically people see file sharers being sued but they don't see these users being sued. So you get on newsbin or something where a service takes a small fee from you and basically makes itself the target for the lawsuit. You aren't buying a license for the media, you're buying insurance in case the RIAA/MPAA come down on the service you're using. If they do, you lose only the fractions of the cost you put in and the site owner takes the fall. That's raw capitalism for you!

Re:hunter hunted (oblig)

[Lundse]

In Soviet Russia, the government takes on the RIAA and MPAA!

Which is more or less what the article is saying, for a sufficiently cynical view of corruption and the current political situation over there...

But this does actually cost them money

[91degrees]

People who are willing to pay money for an illegal download would obviously pay at least something for a legal download. Some people probably believe these are genuine sites.

Now, I'm pretty neutral about people downloading movies for free. I don't think it does a lot of harm although the sense of entitlement a lot of downloaders have irritates me. These guys on the other hand, are directly profiting from someone else's work. Sure, the MPAA could compete pretty well if they dind't have to make the damn films in the first place.

This is exactly the sort of thing copyright law was intended to prevent. It's a system that has worked reasonably well for quite some time. I'm surprised there's so much sympathy for criminals.

Better bribes

[Maximum Prophet]

All they have to do is give better bribes to the FSB and the MPAA can get all the customer records from the Russian company. In fact that might be the business model:

1. Sell unauthorized copies of movies (Profit)
2. Get your website blocked everywhere
3. Sell your customer information the the MPAA (Profit)
4. Rinse. Lather. Repeat.

Who cares?

[qoncept]

This reader adds, "Just a thought, but maybe if the studios offered a low-cost, for-profit, legitimate download site without DRM, they could receive the profits at the expense of the cyberlockers."

Does anyone else feel the same way about such business model suggestions? "They know best because they're n that position" certainly isn't foolproof logic, but they definitely spend a lot more time and money and have a more realistic understanding of what impact pricing and distribution methods will have on revenue than know-nothings that always seem to recommend business practices that are in their best interest.

Re:Who cares?

[Gabrosin]

What you're hearing is the voice of market demand. We've evolved into a culture that enjoys instant gratification, regardless of whether you see that as a negative or a positive. And as the people of the world become more and more technologically savvy, they've realized that what they want IS possible. So now the challenge is on the supply side of the equation, to meet demand while still making a profit.

In 1940, the price of every interested consumer in America owning The Wizard of Oz was astronomical. Some of that came from the production costs (actors, film, staff, etc.). The vast majority of it came from distribution. Copying the movie to film for each individual consumer would have been prohibitive to start with, as would transporting each film to its destination. Of course, no one had home theaters and film-playing equipment anyway, so the point was moot.

In 1990, the price would still have been very, very high, but it wouldn't have been as high. People would need only a VCR at home and to purchase a VHS cassette. Copying the film onto so many VHS tapes and distributing them still cost a lot of money, money that had to come from the consumer somehow, but the cost on the distribution end had gone way down.

Now in 2010, almost the entirety of the price for any movie is in the production costs, NOT in the distribution costs. Ownership can be as simple as making some space for a file on your computer; even a DVD isn't necessary any longer. A little bit of bandwidth for transport, a little bit of storage, and it's done. Customers aren't stupid: they KNOW that the costs are all in production (and advertising, but that's a separate issue). And all those costs are sunk costs paid up front. The customer doesn't care how much it cost to produce the FIRST copy of the movie; they only care that to make one more costs next to nothing.

We're starting to see the advent of the pricing model of the future. Customers who are interested in seeing a particular movie will be expected to pay up front, to the limit of their willingness to pay. If Iron Man 3 is worth $20 to you, then that's what you contribute. If the movie doesn't get enough funding to be made, you get a refund. If it does get made, you get a copy, yours to do with as you please. That new WW2 movie might only raise $20 million, so it gets some unknown actors rather than big-name stars. On the other hand, that new Twilight movie might raise $500 million in advance from teenage girls with no impulse control, and make ridiculous profits for a studio even before shooting begins. And since movies only get made when their up-front costs are met, any money the movies make through traditional forms of release (theaters, DVD sales, etc.) is just profit. And the studios won't have the same incentive to go after freeloaders who get a copy without paying; their costs are met already, so why fork over piles of money to lawyers? Essentially, once the movie is sponsored, it belongs to the world. The people who were willing to front the cost get the movie they want; the people who have no interest in it can ignore it completely; and maybe some of those people who didn't pay up front but enjoyed the movie are willing to chip in money for bonus content or just the continued support of a particular studio, so they can make more movies that the people want.

We'll see fewer outright bombs (because they won't be able to get funding). We'll see fewer projects get cancelled in the middle (because the studios will be on the hook to refund money to the sponsors if the movie never finishes). We'll see less ridiculous salaries for big stars unless they really can justify them (by allowing conditional sponsorships based on a particular actor/director/writer being part of the project). And we'll see less absurdity from people trying to squeeze obscene amounts of money out of a distribution model that is by its nature nearly free.

Re:why would anyone BUY an illegal copy?

[yeshuawatso]

Or they could just think the site is legit. I am guilty of running one of these sites back in '05 (iptelev.com). I could remember the flood of DMCA notices I would get every week. Although, I had a credo: Any movie in theaters in the US, UK, AU, FR, SP, JP, or HK won't be in the library. Basically, if it's not on DVD, you won't find it at my site. A lot of my customers were users of other sites (SaltWaterChimp.com for example) that streamed television shows on the Shoutcast channels. I did try to broker a deal with individual studios to stream their content on a pay-per-view basis (and succeeded with Lionsgate), but most of the studios wanted too much and way too many restrictions (DRM, USA only, expirations, quality restrictions, minimum price, etc). I was only charging $5 & $7 for my stream and on-demand access respectfully, with about 300 customers sustained and about 20 new customers a month. After talks fell through, I decided it was too risky to continue the service and shut down all the servers, issuing refunds to customers that either just signed up, or were in the middle of that month. I had servers in the US, Canada, UK, France, and working on one in Asia.

The cost to run my services at the price I was asking for wouldn't have been sustainable if I had a full fledge staff. Plus, cloud computing like Amazon's EC2 didn't exist (or I wasn't aware), so I had to build my own network. I had a lot of fun doing it, but I wouldn't start the service again unless I had deals worked out before hand. Complying with so many DMCA notices was time consuming and annoying. Plus, as I've aged (I was barely 18), I've learned that my services were causing harm to those studios. Although most of my subscribers were a little technologically advance (they found the shoutcast tv streams), there were a few who genuinely thought the service was 100% legit and they weren't doing anything wrong.

I started the service because there weren't any services out there at the time that were providing recent DVD quality movies at a decent price and without the need to download a large file to your computer. Vudu had just started and MovieLink just sucked. I didn't know about venture capital or even much about business (I had just started college) to seek funding for my service.

To stay on topic, people who are buying these illegal services, often times don't know that they're illegal. Every on-demand movie provider except Hulu requires you to install some arcane software to collect data on you and to control the DRM, so installing additional software to view media seems normal.

Contracts? The MAFIAA breaks them.

[tepples]

that they start putting contracts on each other

At least the Mafia honors such contracts, unlike the MAFIAA.

Ahem?

[Evildonald]

Just for discussion purposes.. does anyone know any urls of said websites?

Re:why would anyone BUY an illegal copy?

[MoonBuggy]

There's no logical problem with those two ideas coexisting. One could easily argue that the MPAA paying the creators as a one-off isn't the problem, but the MPAA then turning around and demanding perpetual payments in the name of the creators, who will see next to nothing from these payments, is a problem.

That said, I happen to believe that copyright (and the income stream that arises from it) is a good thing, but that terms are exaggerated grossly beyond their usefulness. I can't think of a scalable model off the top of my head that would allow sensible compensation to all involved with the making of a film (sensible being defined as 'enough to cover costs and provide enough profit to encourage further work') from a single set of payments. About 15 years, however, (as it was originally, I believe) is a perfectly sensible time to cover those criteria without locking work away from the public. I also think that the major studios (and the MPAA as their representatives) wield far too much power compared to their usefulness, and that power is tied to their grip on the existing back catalogue of media and their assurances of excessively long copyright on future works.

Re:Its funny

[tibit]

It's funny that it was the exact situation in Eastern Europe in the late 80s and early 90s. I remember it quite vividly. Suppose you wanted an up-to-date copy of Visual C++ and Windows DDK right around the time when Windows 95 came out. Good luck buying it from official channels -- you were quoted delivery times of months, and overheads in multiples of US prices. IOW: no legitimate way to get it in time allotted for your project. Going to the local pirate, you could get it in an afternoon.

Quick Question

[SolarStorm]

If RIAA and MPAA or whoever can charge me for every blank DVD and CD I purchase without proof that I have downloaded anything illegally why are we so upset with the mobsters. My musician friend says he has never seen a cent of what I have paid for my blank media.

Its funny, but I am being forced to look in the direction of some of these sites. I have been downloading movies and tv shows from iTunes because it was too easy. Now my wife would like to watch some of these on our TV, but guess what? I cant! Not without spending another $260 for apple TV. Not because my DVD player wont handle digital media... Our home movies play just fine from a thumb drive. But the stuff I have paid for wont! So my solution, download it from somewhere else.

Sorry I have no sympathy for the MPAA and its DRM. Create a business model that is affordable and competitive with the crimials, and the criminals will go somewhere else and I will continue to buy legit.

Finally, the MPAA attacks a proper target

[mykos]

Single mothers, poor college students, and elderly gentlemen are not proper targets. People ACTUALLY making money off piracy are the right targets, and they have no moral leg to stand on.