How Much Does File Sharing Really Cost Hollywood?

from the questions,-questions... dept

The MPAA is famous for throwing around all sorts of completely bogus numbers when it comes to the "costs" of online infringement. Even parts of the US government have mocked the MPAA for its way of calculating "losses" from infringement. In one case, the calculation was so ridiculous that even the MPAA had to admit that it had fudged the numbers. However, the folks over at TorrentFreak decided to see if they could come up with a more reasonable calculation by doing a thought exercise: what if everyone who shared unauthorized movies and TV shows via BitTorrent, suddenly switched to Netflix instead? How much more revenue would that bring in?

The answer? Not a hell of a lot. Now, the report makes a large number of assumptions -- all of which are laid out directly, and whenever possible, they sought to use a number that favored the MPAA. So they assume that every download is a "lost sale" and are extremely quick to inflate how much BitTorrent traffic is movies and TV. They also assume that all BitTorrent traffic is infringing. Again, the idea is to be as favorable as possible to Hollywood. In the end, they find that it's possible the studios might have made about $60 million more under this simplistic scenario. They then point out that the MPAA's own budget is greater than that. We can quibble about the methodology, but assuming that the methodology stands up, it certainly raises significant questions about the true size of the "issue."


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    PaulT (profile), Dec 1st, 2011 @ 6:34am

    It's certainly anecdotal, but I can point out lots of times where DRM, windowing, region coding, poor packages, high prices, licencing restrictions and even bad sleeve art have cost the MPAA money from my pocket - and I'm the type of moron who still buys so many movies I'm edging into triple figures for the discs in my collection I haven't even watched yet!

    File sharing? Not so much.

     

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    Anonymous Coward, Dec 1st, 2011 @ 6:44am

    Yes, but how much does Netflix cost Hollywood?

    There's a reason they're trying to drive up costs on their streaming.

     

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    Marcel de Jong (profile), Dec 1st, 2011 @ 6:45am

    It's not about piracy, that's just a talking point, just a narrative. (the sugar to make the medicine go down Congress' throat)

    The real issue is about control.
    The middlemen of the RIAA- and MPAA-backed labels and studios can't control what gets released to the market anymore, because of the internet.

    Indie artists suddenly have about as much opportunities for profiling their works to the public as artists who have signed up with the large corporations.

    And these corporations are running scared. They are so fixed on keeping their old cushy jobs, that they don't dare to change their business models to suit the new reality more, because that would mean more work for them and possibly less profit. So intent they are on keeping that control, that they are willing to destroy the internet and criminalize the fanbase of their artists.

     

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    Marcel de Jong (profile), Dec 1st, 2011 @ 6:48am

    It's about control

    It's not about piracy, that's just a talking point, just a narrative. (the sugar to make the medicine go down Congress' throat)

    The real issue is about control.
    The middlemen of the RIAA- and MPAA-backed labels and studios can't control what gets released to the market anymore, because of the internet.

    Indie artists suddenly have about as much opportunities for profiling their works to the public as artists who have signed up with the large corporations.

    And these corporations are running scared. They are so fixed on keeping their old jobs, that they don't dare to change their business models to suit the new reality, because that would mean more work for them and possibly less profit. So intent they are on keeping that control, that they are willing to destroy the internet and criminalize the fanbase of their artists.

     

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    anonymous, Dec 1st, 2011 @ 6:50am

    it isn't and never has been about the amount of money that the entertainment industries may or may not be losing. it is and always has been about control and the idea that people must buy the media only in the ways those industries say (little plastic disks), when they say, where they say and for the price they say. it will never be about 'protecting the artists, the troops, uncle Tom Cobbley or anyone else'.

     

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    Anonymous Coward, Dec 1st, 2011 @ 6:59am

    its all about control, not as much to do with piracy.

    People need to think about how it was before the internet came along.

    Was it possible to access the global market with your wears, directly?

     

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    Anonymous Coward, Dec 1st, 2011 @ 7:04am

    It does make me wounder where RIAA- and MPAA get their numbers from.

     

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    Marcel de Jong (profile), Dec 1st, 2011 @ 7:08am

    Re:

    Out of some intern's ass, is my guesstimation.

     

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    Chuck Norris' Enemy (deceased) (profile), Dec 1st, 2011 @ 7:12am

    Re:

    How much does Netflix cost Hollywood? What an asinine question! In my case, I have seen a lot more content because of Netflix that I would never have seen otherwise. So Hollywood gets a cut of my reasonable monthly fees and I watch less commercial television (which is free because of ad revenue). Now the library...that is where I get a lot of free content from Hollywood! =]

    There's a reason they're trying to drive up costs on their streaming.

    Cause they are greedy bastards who want to be paid more money for something that costs very little to provide on a worldwide scale. The box office is blowing records every year. If you spend $100M to make a good movie that people will watch you will make your money...well maybe not by Hollywood accounting standards.

     

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    Mark, Dec 1st, 2011 @ 7:16am

    Re:

    It costs them nothing. Netflix pays for the content it uses. As well as for all the bandwidth, marketing, customer support, and everything else that goes to getting/maintaining/servicing customers. How much do you think the MPAA/Studio's give back to Netflix for all of that? My guess would be 0.

    Now, the studios are trying to extract a higher price from netflix, but that is not the same as costing them money (maybe opportunity cost, but it depends on what the market will accept, and we saw how well the last Netflix price increase went).

    Plus, it also adds additional, non-monetary value, in the form of good will from the the public. People are getting content that they want, in a way that they want it that is both simple and convenient and a price that the /Market/ is willing to bear. You cannot put a price on that (although the MPAA & studios are really trying hard to do that, which would take away that good will)

     

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    Eileen (profile), Dec 1st, 2011 @ 7:16am

    All of this goes to show that the government/corporate ruling class have zeroed in on a time-tested strategy for control of the populace: fear. Whether the bogeyman is "terrorism" or "drugs" or "pedophiles" or "pirates"... it's all just an excuse to get laws passed which further the real agenda: making it easier for the oligarchy we have to stay in place, to get richer, and to suppress dissent or anyone trying to challenge the system.

    Sad for a nation founded with such principles.

     

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    Josef Anvil (profile), Dec 1st, 2011 @ 7:26am

    What about my DVDs?????

    In all fairness to the trolls, the article assumes that the traffic on BitTorrent would shift to Netflix or some other legal streaming service.

    The MPAA would argue that it's losses are actually on lost theater tickets and movies that are still in the theaters, that way they can say that their numbers are lost sales instead of lost subscriptions to a streaming service. And we all know that everyone who downloads/streams a new movie, would have paid to go see it.

     

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    Anonymous Coward, Dec 1st, 2011 @ 7:33am

    But it's really expensive running a massive anti-copyright infringement group! They've got to justify themselves and their presence to the people paying them somehow, and what easier way than blaming things beyond you and your clients control?

     

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    David (profile), Dec 1st, 2011 @ 7:38am

    Simple Answer

    How many file sharing servers and domains does "Hollywood" own? 0.

    The simple truth is that infringing does not COST them 1 red cent.

    What does happen is that they make less profit. Let's at least get real about that

     

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    Anonymous Coward, Dec 1st, 2011 @ 7:43am

    Re:

    Given the size of the MPAA numbers, that intern must be the start from goatse

     

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    The Infamous Joe (profile), Dec 1st, 2011 @ 7:45am

    Re: Simple Answer

    What does happen is that they make less profit. Let's at least get real about that

    You state this as a fact, when it's not even popular opinion. Citations/work?

     

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    Sarah, Dec 1st, 2011 @ 7:50am

    3D as theater incentive?

    I just had a thought. Possibly unrelated, but might the obnoxious trend toward "gimmicky" 3D effects (snakes leaping directly at the viewer for absolutely no story-related reason other than to take advantage of a new tool they can play with) really be just that -- a lack of taste when it comes to cramming 3D into their movies -- or is it an attempt at providing added value to the theater experience to combat piracy and encourage consumers to come out and buy tickets? I mean, there's a reason Avatar did so well in the theaters, and I'm willing to bet that reason isn't because everyone has forgotten about Fern Gully by now.

    Now, I'm not saying there isn't a use for 3D -- I'm looking forward to seeing Hugo, because from what I've seen I think 3D will be a valuable and artistically interesting layer to the movie. (And Avatar got me as close to my lifelong dream of flying than anything else ever has!) It's the blatant, heavy-handed uses (I keep thinking about that snake -- Harry Potter, perhaps?) that I find distasteful. Either way, this consumer is going to the theater for Hugo when I otherwise maybe would have just waited for it to come out on DVD. If Hollywood wants to keep butts in theater seats, this reinventing the theater experience seems to be doing a decent job.

    Long story short -- I'd be interested to see an overview of these same numbers after a few years to see if 3D has changed any of the factors.

     

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    out_of_the_blue, Dec 1st, 2011 @ 7:53am

    Two major flaws: only US traffic, of only Bittorrent.

    Plus assumes that all content is priced at Netflix rate, neglects higher prices / returns in theaters, advertising income, the costs of money at risk and a hundred other major points.

    Even the writer there sums up (emphasis added):
    What does this mean? Nothing. Itís a simplistic attempt to put a number on BitTorrent piracy in the US."

    Someone above has the exact wrong view of where money comes from:
    >>> "How much do you think the MPAA/Studio's give back to Netflix for all of that? My guess would be 0."

    No, Netflix gets ALL of its income from content, so it's entirely gravy for Netflix, wouldn't exist without someone else making product. Netflix doesn't create anything, it's simply in middle between producers and public, skimming off both.

     

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    Digitari, Dec 1st, 2011 @ 7:59am

    Re: Two major flaws: only US traffic, of only Bittorrent.

    so netflix has 0 cost to setup servers to stream movies and gets it's bandwidth for free huh? they have zero fixed costs is what you are saying???

     

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    AR (profile), Dec 1st, 2011 @ 8:00am

    Just a thought

    From their own non-factual numbers;
    The "costs" from piracy are $60 million (actually less)
    Add another $60 million (actually more) for the MPAA to fight piracy.
    Thats $120 million.
    They could easily cut those costs in half.

    Just eliminate the MPAA!!
    Save $60 million plus.

    It seems its costing more to fight piracy than what they claim they are actually losing from it.

    And I thought I didnt have any business sense.

     

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    The Infamous Joe (profile), Dec 1st, 2011 @ 8:04am

    Re: Two major flaws: only US traffic, of only Bittorrent.

    Netflix doesn't create anything, it's simply in middle between producers and public, skimming off both.

    How would you describe the record labels, with respect to the artists and the public?

     

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    Dark Helmet (profile), Dec 1st, 2011 @ 8:04am

    Re: Two major flaws: only US traffic, of only Bittorrent.

    "Netflix doesn't create anything, it's simply in middle between producers and public, skimming off both."

    You mean other than an innovative and convenient platform for getting that content? Jesus Christ, do you view theater owners as doing "nothing but skimming off of other's content"?

     

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    Anonymous Coward, Dec 1st, 2011 @ 8:06am

    Netflix gets ALL of its income from content, so it's entirely gravy for Netflix


    Yes, all those costs for bandwidth, marketing, mailings, and the content are just "gravy".

    What colour is the sky in your world?

    Netflix wouldn't exist without someone else making product


    which they pay for

    Netflix doesn't create anything, it's simply in middle between producers and public, skimming off both.


    "Walmart doesn't create anything, it's simply in middle between producers and public, skimming off both."

    "Home Depot doesn't create anything, it's simply in middle between producers and public, skimming off both."

    "Your local grocer doesn't create anything, it's simply in middle between producers and public, skimming off both."

    For fucks sake, stop acting like hollywood is getting shafted. Netflix pays for everything it does - including the "content".

     

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    PaulT (profile), Dec 1st, 2011 @ 8:08am

    Re: Two major flaws: only US traffic, of only Bittorrent.

    "Netflix doesn't create anything"

    Except, you know, its entire platform, its software, the extra tools and features that make it popular and useful, and the infrastructure it runs on. But, apparently that doesn't count because... something...

    Do you also have this low opinion of TV networks, radio stations, libraries and retail stores, or is it something you reserve for internet sites that don't pretend it's 1996?

     

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    Anonymous Coward, Dec 1st, 2011 @ 8:18am

    Re:

    Control of distribution is part of Copyright law. It is about control, control of how a product (movie, music, television show, etc..) you either created (or purchased the rights for) is marketed and distributed. Distribution rights for movies (and music) get complicated because companies will sell those rights to other companies in different part of the world. A movie might be distributed by Lionsgate for example in the US but Sony might handle worldwide distribution.

    And yes, it IS about control. Just like book publishers release hardcover books before the paperbacks are released. And game publishers release the full-price retail version before the reduced-priced "greatest hits" edition. This isn't some new concept that was created by the movie and/or music industry, it has been an established system for decades if not centuries. If you don't like the "little plastic disks" don't make that purchase. If enough people don't want the disks the industry will change, but if someone instead chooses to take matters into their own hands and pirates the movie it just gives the industry just cause in pursuing more stringent anti-piracy laws.

     

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    Kevin H (profile), Dec 1st, 2011 @ 8:19am

    What does it cost?

    Well that is relative. Actually speaking of the act of piracy, it costs them nothing. There is no way to truly say that everyone who downloaded a movie or CD would have paid for it otherwise. So they have no real loss there, but if you look at what they spend on lobbying at state and federal levels. The researchers they employ to track it. The lawyers they higher to sue and litigate in their name. The fees they pay to groups like the RIAA. Suddenly you can see why it costs them so much.

     

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    Marcus Carab (profile), Dec 1st, 2011 @ 8:20am

    Re: Two major flaws: only US traffic, of only Bittorrent.

    No, it's sitting in the middle providing a valuable service. Why can't you see that?

    Or think of it this way: what are the studios doing? They don't create anything - directors and actors and editors do. So I guess the studios are just middlemen skimming off them.

    And what are the directors and actors and editors doing? They don't create anything - they are just taking a story from script to screen. So I guess they are just middlemen skimming off the writers.

    Similarly, what do ALL brick-and-mortar stores do? They don't create anything - they are just sitting in the middle between manufacturers and consumers.

    And what are manufacturers doing? They don't create anything - they just convert raw materials into different shapes, sitting in the middle between miners and consumers.

    And what are miners doing? They don't create anything - they just pull stuff out of the ground, sitting in the middle between geological processes and the consumer.

    See how stupid it is to pick one random person in the chain and decide you hate them because they are "in the middle"?

     

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    Anonymous Coward, Dec 1st, 2011 @ 8:21am

    Re: Re:

    How much does Netflix cost Hollywood? What an asinine question!


    Yes, the asinine-iness was intentional there.

     

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    Kevin H (profile), Dec 1st, 2011 @ 8:22am

    Re: Two major flaws: only US traffic, of only Bittorrent.

    1/10 OOTB. You should go get some coffee or something. You usually set a high bar for the other trollholios around here, but that was pathetic. I expect much better than this of you.

     

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    Anonymous Coward, Dec 1st, 2011 @ 8:34am

    Re: What does it cost?

    Hmm... Actually, I'd like to see the detail on that. Just how many millions have the MPAA/RIAA wasted over the years in their quixotic quest to vanquish piracy?

     

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    PaulT (profile), Dec 1st, 2011 @ 8:40am

    Re: Re:

    Hmmm... this seems to be your tactic this week. Not working really is it?

    Anyway, the thing you seem to miss is that all of those things stem directly from natural physical limitations. Regional controls on movies, for example, occurred first because prints of movies were bulky and too expensive to produce a worldwide stock, and then because VCRs needed to operate on different TV standards, requiring regional differences. There were still people who would import and break those restrictions, but most people recognised they were necessary and accepted them.

    The internet has removed those physical barriers, and thus the recognition that they are necessary. With that necessity gone, so is the willingness to accept the restrictions. People won't wait for you to supply the market when it's best for you, they will find their own sources while you try to "maximise" profit by refusing to service demand.

    Deal with it, and service the market as it exists today, not how it was 20 years ago.

     

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    Azalus (profile), Dec 1st, 2011 @ 8:43am

    The real question

    Based on these numbers, which seem pretty generous, the question is:

    "Is it more cost effective to have entire company divisions devoted to developing anti-piracy solutions than it is to write the money off as a loss?"

    In addition, pursuing legal battles and greasing the palms of congressmen contribute to the cost of piracy.

    If the companies did not spend so much on battling piracy and accepted like everyone else that it will occur and just ignore it, they probably would have a larger bottom line.

     

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    David (profile), Dec 1st, 2011 @ 8:45am

    Re: Re: Simple Answer

    How about Dictionary.com?:

    Cost (n): the price paid to acquire, produce, accomplish, or maintain anything

    Infringement has no direct cost. They are not buying or producing or maintaining infringement. What does happen is less money paid back to them after they lay it out to produce content. This is a common misnomer that goes through reporting in a lot of ways, like when a company predicts a profit of 10 million and they only have a 7 million profit, it gets spun as a 3 million loss. Calling it a loss does not make it one. Anymore than calling the making less in profits from potential sales of infringed material is a cost.

    Although I am willing to admit that they dump money down a hole by having lawyers chase after infringers, but that is a choice they make and not one that comes from infringement.

     

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    Anonymous Coward, Dec 1st, 2011 @ 8:45am

    Re: Two major flaws: only US traffic, of only Bittorrent.

    "No, Netflix gets ALL of its income from content, so it's entirely gravy for Netflix, wouldn't exist without someone else making product. Netflix doesn't create anything, it's simply in middle between producers and public, skimming off both."

    Sometimes blue you seriously astound me with how crazily you perceive things. "It's entirely gravy for Netflix" LMFAO!!! So Netflix purely profits from what it does is what you're saying? They don't pay for servers or support or delivery or anything. Right? That's what I'm taking away from your statement. Which is of course completely erroneous.

    Netflix may not create content, but they are creating a service. Something that the entertainment industry is profiting off of and not doing itself. Netflix is doing anything but skimming off both. If anything, Netflix is working to give the customers what they want, something the studios have YET to do themselves. And because of the studios greed, people are slowly leaving Netflix due to rate hikes (brought on because the studios are raising rates on Netflix, after being shown that YES such a business model, streaming, can and will succeed and profit handsomely, who in turn raises rates on the customers to satisfy said greed of the studios).

    If anyone is "skimming", it's the studios. They're not doing anything at all. Providing their content. Please. It's already provided in other ways, except the one the people want. Netflix stepped in and filled a void and did so with huge success. The middlemen yet again are the studios, per usual. Making a buck while doing nothing at all.

    blue come on, I never thought I'd say this, but I seriously can't tell if you're trolling or just stupid.

     

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    monkyyy, Dec 1st, 2011 @ 9:04am

    we all know the riaa/mpaa is all about limiting competitors from making new tech that make media making so very very cheap anyone can make stuff w/o them

     

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    Anonymous Coward, Dec 1st, 2011 @ 9:38am

    Re:

    I need a multiplier button on the Insightful button for this comment!

     

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    Jayce, Dec 1st, 2011 @ 9:51am

    only what they spend on DRM

    cost, n. an outlay or expenditure of money, time, labor, trouble, etc.

    Money people just don't give you is not a cost, therefore the answer is it only costs them what they spend on useless DRM.

     

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    ScytheNoire, Dec 1st, 2011 @ 10:06am

    Less than what they waste on lawyers

    But that $60 million could be used to fund another horrible Adam Sandler movie.

     

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    The Infamous Joe (profile), Dec 1st, 2011 @ 10:15am

    Re: Re: Re: Simple Answer

    What I mean to say is that, sure, copyright infringement might (might!) reduce potential sales, but it also has other potential benefits. So, it is also possible that it's a wash or maybe even a net positive.

    I agreed with all your post until you stated as a fact that they make less profit.

     

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    khory (profile), Dec 1st, 2011 @ 10:32am

    Re: Two major flaws: only US traffic, of only Bittorrent.

    Are you daft?

    Netflix isn't "skimming" off anybody. They provide a means of distribution for content creators. Netflix pays the costs associated with distribution as well as paying for the content it provides. All the studio has to do is license the content and collect their check. Not a bad deal.

    Netflix provides consumers with the convenience of watching what they want, when they want, on the screen they wan, and for a fair price. People gladly pay for that. That isn't "skimming" either.

    If the studios would work with rather than against Netflix, I believe piracy, in the US at least, would decline a great deal. They should try it and find out for sure.

    All people want is to have their entertainment delivered in a convenient way when they want it. No hoops to jump through. And they don't want to be price-gouged for it either. Why is that so hard to do for Hollywood?

     

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    jupiterkansas (profile), Dec 1st, 2011 @ 10:46am

    Re: Re:

    I just x2'ed it for you.

     

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  42.  
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    Dixon Steele (profile), Dec 1st, 2011 @ 10:55am

    Re: Re:

    "If you don't like the "little plastic disks" don't make that purchase. If enough people don't want the disks the industry will change, but if someone instead chooses to take matters into their own hands and pirates the movie it just gives the industry just cause in pursuing more stringent anti-piracy laws."

    Here's the thing: People aren't pirating the "little plastic disks", by and large, they are pirating the content found on those discs. That's a very important distinction. For years, they were telling the industry "We don't want to buy your discs, with their region coding, staggered release dates and copyright protection systems that prevent us from watching them where, when and how we want. We love your content, but will not support your current delivery mechanism." And the industry took that clear message and did what with it, exactly? Ignored it, while systematically opposing any other startup that attempted to address the issue? Seems like a viable solution...

     

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    David (profile), Dec 1st, 2011 @ 1:15pm

    Re: Re: Re: Re: Simple Answer

    I guess what I meant was "they make less profit than they want to"

     

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    JEDIDIAH, Dec 1st, 2011 @ 2:11pm

    Tort reform for the rich, Crime and punishment for the poor.

    Nope.

    Once the cat is out of the bag, then it becomes my cat and my personal property rights should not be infringed. They have the right to make contracts and have other bound to them. Beyond that, Big Content should have no special powers.

    They should not get to destroy the internet. They should not get to tell me what kind of devices I can own. They should not be able to stop me from re-distributing their product in a region that's being ignored.

    Yes. The consumers have some rights too.

     

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    LyleD, Dec 1st, 2011 @ 2:34pm

    Re: Re:

    And how's that 'Control' working out for you?

    If you want to act like a two year old and throw your toys out the pram, you go ahead buddy.. The rest of us will just keep saying 'fuck you' and consume your product in the best way we see fit..

    Your established system is dieing, and good riddance. There's no place for it in a modern interconnected world.

     

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    David (profile), Dec 1st, 2011 @ 2:41pm

    Re: 3D as theater incentive?

    You are probably right about this, or why would the latest "Harold & Kumar" movie have 3D?

     

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    Keroberos (profile), Dec 1st, 2011 @ 3:30pm

    Re: Two major flaws: only US traffic, of only Bittorrent.

    No, Netflix gets ALL of its income from content, so it's entirely gravy for Netflix, wouldn't exist without someone else making product. Netflix doesn't create anything, it's simply in middle between producers and public, skimming off both.

    By your own logic, The MPAA/Studios get all their profits off the backs of others. Theaters, DVD retailers, video rental stores, digital streaming services, DVD distribution companies, and the DVD mastering/manufacturing businesses, all of these were created/funded by third parties to distribute the studios product, so you could say that without these distributors the MPAA/Studios would not be able to exist at all.

    Of course the same is true in almost all industries, there are are entire chains of companies involved in the creation/manufacturing/distribution of almost all products. So to say no one should profit from anyone else's product is not just wrong, it's flat out ridiculous.

     

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  48.  
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    nasch (profile), Dec 2nd, 2011 @ 9:28am

    Re:

    All of this goes to show that the government/corporate ruling class have zeroed in on a time-tested strategy for control of the populace: fear. Whether the bogeyman is "terrorism" or "drugs" or "pedophiles" or "pirates"... it's all just an excuse to get laws passed which further the real agenda: making it easier for the oligarchy we have to stay in place, to get richer, and to suppress dissent or anyone trying to challenge the system.


    I don't think you have it quite right though in this case. They know the public is never going to be afraid of pirates (the attempts to convince us that piracy supports terrorism, for example, have been somewhat half-hearted and entirely unsuccessful). So they're trying to make us afraid of the media companies. Download our songs and we'll sue you. Post our stuff on YouTube and we'll have your account suspended. Upload our movies and we'll shut down your web site.

    It's amazing that any organization can believe that making their customers fear them is a viable long-term business strategy.

     

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  49.  
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    Jerry, Dec 2nd, 2011 @ 11:41am

    Erroneous info

    Like most comment boards on entertainment copyright issues, this one is about 80-90% full of fallacious arguments. One of the best (of many) on here is:

    "Once the cat is out of the bag, then it becomes my cat and my personal property rights should not be infringed... They should not be able to stop me from re-distributing their product in a region that's being ignored."

    The truth is, the underlying copyright never becomes "your cat." If you want to understand this industry, it' sometimes helps to make parallels to other situations. For example, if a store is robbed and you get there before the police and take even more stuff from it, is the stuff you stole "your cat"? After all, it's "out of the bag." How is this different?

    The illusion that media is physical product is often what gives way to the misnomers associated with it. A CD, or a movie or a book is only a 'physical' product as a delivery mechanism for the content, which is the real "product." Outside of software, I can't think of another business that has these issues.

    Your comment that they "should not be able to stop me from distributing their product in a region that is being ignored" is the height of absurdity. First of all, you are now reversing your edict and admitting that it is "their" product, and as such, you should realize that "they" can distribute "their" product anywhere "they" want (and without interference from you.) So please, relax your fallacious sense of entitlement. When you advance millions of dollars for distribution rights to a studio, then maybe you can decide where it's distributed. (even then, the studio will have to agree with you. Remember, it's still "their" movie.)

    Everyone deserves to get paid for their place in the chain, just like in the physical world. Movies that are not paid for obviously hurt the creators because the production budget is based on an estimate of potential income (just like building a house, car, etc...) (You could make the same arguments about a lot of thing, like say, a live event. Should you be able to get into a concert or sporting event for free since the act has already paid to get to town and set up their show, so it doesn't "cost" them any more to let one more guy in the door, right?) When people consume the content without paying for it, they are getting a free ride and thus effecting the money available for the next production and on down the line.

    Yes, studios (like the labels before them) have to adjust to a new reality in the digital realm, but trying to justify not paying for content with slogans like "greedy studios", "Netflix does nothing," "studios do nothing," "It's my cat," a) is speaking around the real issue, and b) gets us nowhere.

    When the public gripes about issues like these, it's often because they don't know the real ins and outs of a business. Sure it would be nice if every seat in a plane were first class, but how would that affect all ticket prices (you'd pay more to fly is how it would affect it.) Conflating incremental cost as free, is just one mistake people make on these boards. A few years ago, we used to hear "well, a CD only costs a dollar so they should just charge a dollar." Yet, when was the last time you failed to factor in production costs to a product? I don't mean the pressing plant - I mean the script, the acting, the set design, the location costs, the music licensing or scoring, PR, marketing, advertising, etc, etc. Oh, and guess what? Do you know the largest cost a movie studio has every year? Failed projects. So if 10 movies get made at $100mm each and one makes $250mm in return, who pays the shortfall? Hmmm... Oh, that...

    Until you accept the real issue, that everyone who contributes to the end result - writers, actors, studios, distributors, etc. must be paid a fair cut for their role in the process, these circular arguments will get nowhere.

     

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  50.  
    identicon
    Eric, Dec 2nd, 2011 @ 12:21pm

    Torrents are GOOD Marketing for Hollywood.....

    The truth is that Torrent downloads build buzz and are good marketing for Hollywood.

    If anything, Hollywood MAKES MONEY from Torrents.

    Why????

    Well, what I heard is....

    Let me ask you, how many times have you downloaded a torrent, watched the new movie, and then went to the Theater to watch it or bought the Blue Ray Disk???

    Torrents let you discover movies / TV shows you would normally not watch, then because of their low-quality or other issues, you then decide I want to see the actual movie.

    Lets face it, how many "movie theater" video rips have you watched with bad audio, and the silhouettes of people that walk in front of the camera?

    Or, worse yet, the darn video stops suddenly at the third act, just as it gets "good"!!! Right!

    Without admitting guilt.... You know I'm right!! Stop laughing and read on....

    So, you like the movie, and decide its worth buying or watching in the theater.

    Hollywood makes $$$$$$ and everyone is happy.

    - Eric

     

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  51.  
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    Ed C., Dec 2nd, 2011 @ 1:49pm

    Re:

    Though this has basically been said many times before, it's still worth saying again...and again--not because there's any hope the media execs will eventually "get it", as they're largely paid not to, but because more people will realize just how much of the problems with modern media are caused by these legacy gatekeepers.

     

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  52.  
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    Jeff Rife, Dec 2nd, 2011 @ 2:09pm

    Re: Re:

    Actually, Netflix "costs" the MPAA companies a lot of money in the same way that file sharing "costs" them a lot of money.

    In other words, in the eyes of the MPAA, if they could get Netflix to pay them ten times as much in licensing, that would obviously increase their bottom line by 10x. This would only work if there was no file sharing, though, because then everyone would be using Netflix, and nobody would cancel when the price gets raised to $100/month.

     

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  53.  
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    nasch (profile), Dec 2nd, 2011 @ 9:14pm

    Re: Erroneous info

    If you want to understand this industry, it' sometimes helps to make parallels to other situations. For example, if a store

    Oops. Your analogy went off the tracks right there.

    The illusion that media is physical product

    If you understand this, then why are you making "rob the store" analogies?

    Everyone deserves to get paid for their place in the chain, just like in the physical world.

    If they're successful in doing business, yes.

    When people consume the content without paying for it, they are getting a free ride and thus effecting the money available for the next production and on down the line.

    And yet... they just keep making more productions. It almost seems like they can survive and keep doing business despite all the piracy.

    When the public gripes about issues like these, it's often because they don't know the real ins and outs of a business.

    The public doesn't know the ins and outs of any business. If you can't make money without your customer thoroughly understanding your business, you're doing it wrong.

    I mean the script, the acting, the set design, the location costs, the music licensing or scoring, PR, marketing, advertising, etc, etc.

    All fixed costs. Have you read about the difference between fixed and marginal costs, and which are most important to pricing?

    Do you know the largest cost a movie studio has every year? Failed projects. So if 10 movies get made at $100mm each and one makes $250mm in return, who pays the shortfall?

    What is your point, exactly? That I shouldn't download movies because a lot of them are pieces of crap that don't make money?

    Until you accept the real issue, that everyone who contributes to the end result - writers, actors, studios, distributors, etc. must be paid a fair cut for their role in the process, these circular arguments will get nowhere.

    And unless the studios accept that ending piracy is a pipe dream, we'll only wish we'd gotten nowhere, since if PIPA and SOPA pass, where we are now will be a fond memory.

     

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  54.  
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    nasch (profile), Dec 2nd, 2011 @ 9:16pm

    Re: Torrents are GOOD Marketing for Hollywood.....

    Let me ask you, how many times have you downloaded a torrent, watched the new movie, and then went to the Theater to watch it or bought the Blue Ray Disk???

    I wonder which the movie industry would rather have, the person you describe above, or someone who doesn't watch any movies? It should be obviously the former, but I'm actually not sure.

     

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  55.  
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    Cowardus Anonym, Dec 4th, 2011 @ 7:06am

    Re:

    In the bigger picture, when a country's major export is entertainment (music, movies, TV, theater, books...), that now falls under GDP and revenues. The RIAA/MPAA back an "industry" that generated trillions of dollars (licenses, royalties, ...) and is protecting it (yes trillions-if one move grosses $1billion at the box office, and even half that after if DVD sales/rentals, promotions, tie-ins, toys, ... just imagine).
    Now with piracy, they see a real threat to an economy (and can justify using the government to enforce).
    I agree, their numbers on the Loss amounts can be exaggerated but then, would they tell the truth as to face an audit on amounts they haven't been honest about? ;)

    Netflix pays license fees, etc, and if the people are sending a message that entertainment cost is too high, then the media moguls would be better to remedy that, instead of feeding their greed with penalties toward the forward thinking.

    As for TorrentFreak, um, that is a pusher with nothing more than self-service on its agenda. Entitlement is not a blog platform to justify theft.

     

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  56.  
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    nasch (profile), Dec 4th, 2011 @ 12:45pm

    Re: Re:

    Now with piracy, they see a real threat to an economy (and can justify using the government to enforce).
    I agree, their numbers on the Loss amounts can be exaggerated but then, would they tell the truth as to face an audit on amounts they haven't been honest about? ;)


    So if you agree their numbers are inaccurate, which numbers are you looking at that indicate a threat to the economy?

     

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  57.  
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    anonymous other guy, Dec 4th, 2011 @ 3:20pm

    hollywood

    I cant help but think what americans would have done in past times. Hollywood is a bloated piggy bank and greedy for every cent. What if people stopped flocking out to the theaters and giving them these hundreds of million dollar box office opens? just dont watch it till it comes out on dvd, as with theater prices these days, 2 people going and you could have purchased it. after a while, they will change their ways and back off. If piracy was such an issue, they wouldnt have these box office numbers to tout about.

     

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  58.  
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    themechanic, Dec 4th, 2011 @ 9:52pm

    Re: downloading movies lost sales

    i download a movie and if good i actually purchace a genuine copy if i can find one ... same for games ... i am so sick of paying good money for crapand in some instances have downloaded the movie several times as corupted data and lost links etc and i also backup the movies i buy as kids and dvd's dont mix (i also have in area of 3000 movies in original boxes only opened and copied to disks for viewing )
    if unable to download many i would not have purchaced as they had crap review

     

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  59.  
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    Jose, Dec 4th, 2011 @ 11:56pm

    There are many reasons why people download movies, such as, high prices, quality of entertainment, availabiliy of product, etc... I just think if the price to see a movie in the theater was lowered, then a few more people could potentially purchase a ticket. Also, making sure it's not a crappy movie. And idk why most companies do not sell their movies over the internet, given that people already download pirated content, maybe.charge $8 or $10 for a digital copy.

    On the same note, most people who downloads pirated movies do it because of the simple fact that it is available. Otherwise they just wont purchase it and watch it.

    Idk if anyone remembers the old ways to copy a vhs or a cassette. Piracy is nothing new to movie or recording companies, they are trying to do something about it, but they have yet to learn that if they keep their 90's mentality and noisiness practice, then they won't have much support.

     

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  60.  
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    guruSUPERmaster, Dec 5th, 2011 @ 12:16pm

    MPAA sucks. Period.

     

    reply to this | link to this | view in thread ]

  61.  
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    scvblwxq, May 15th, 2012 @ 6:26pm

    Re: Simple Answer

    When somebody downloads a movie the studios don't have to spend some money, that doesn't need a citation.

     

    reply to this | link to this | view in thread ]


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