Monday, August 23, 2010

Piracy Presentation From Paramount Pictures

Today at the West Coast IA offices, staff from Paramount Studio gave a detailed presentation of theft of intellectual property over the internet, specifically theatrical motion pictures. Among the bullet-points: ...

* In the past five years, "peer to peer" exchange of online movies has been supplanted and surpassed by on-line streaming from websites largely owned and operated by organized crime (some of the larges being in Mother Russia.)

* This site, according to Paramount, is owned and operated by the Russian mob. (Certainly professional looking, isn't it?)

* Theatrical features are camcorded the day of their release, and go up on-line almost immediately. Organized crime is now paying for good, (quick) camcorded movies.

* Pirate websites earn $20 to $200 million in profits per year. (Each. And there are thousands of them.) It's one of organized crime's preferred methods of earning money.

* Pirate sites often look slicker and more professional than legitimate sites (i.e. Netflix or Red Box). Most pirate sites infest computers with mal-ware and spy-ware.

* There are billions of visits to pirate movie sites annually, resulting in the loss of thousands of movie jobs. (The independent film industry has withered away to nothing. Sixty fewer theatrical motion pictures were made last year, largely because of internet piracy.) ...

Paramount execs detailed how media companies are working to shut down pirate sites and federal law enforcement agencies are now getting involved.

It was pointed out that suing individual site operators takes years, and really isn't a cost-efficient solution. Online streaming is steadily eroding DVD sales, and even lowering the price point of the little silver disks because

"Low price still can't beat free."

It's gonna be interesting to see how all this shakes out, since nobody thinks the problem is going away.


Anonymous said...

If this is true, piracy is a bigger problem than anyone originally thought.

I think the more people hear that these sites are run by the Russian mob, the less likely they will be to use them (theres still a certain percentage of human being who have souls).

Get that information out there!

Oh, and boo to Nina Paley and her "copying is not theft" horseshit. See what that leads to?

Mark Mayerson said...

I think blaming Nina Paley for the Russian Mafia is a stretch, don't you?

Mike said...

Agreed with Mark. Nina Paley gave consent to share her film. It led to awareness of alternative distribution methods of films.
The films the Russian mob 'pirate' are full-rights-reserved, from an un-consenting, older business model.

Anonymous said...

Im not tying Nina Paley to the Russian Mob. Honestly, Im not.

But Ive been in lengthy discussions with Ms. Paley (on her blog), and flat-out asked her opinion of illegally downloading feature films and watching them on her computer, and her blatant answer was: "It isnt theft."

Now, she can do what she wants with her own films, but her suggestion (and encouragement) of downloading and watching movies, and implying there's nothing morally or legally wrong with it encourages opinions, and leads to people using sites like movieberry.

I wish I was wrong, but Nina has clearly stated her position, and it ultimately hurts our business.

Steve Hulett said...

Streaming and down-loading copyrighted material from pirate sites is theft. Downloading copyrighted music from pirate sites is theft.

Streaming and down-loading non-copyrighted ("public domain") material isn't theft.

Anonymous said...

I'm sure the studios are all broken up over the demise of the poor independent film industry.

Independent filmmakers are on Youtube now, since you can do more with an iPhone 4 than you ever could in the heyday of indie cinema. I can make a short film, and millions of people can see it, WITHOUT Paramount's "help". I'm not making any money off of it, but it's not like any indie filmmakers ever saw a cent from Paramount anyway. Profit book-cooking is synonymous with Paramount.

I used to work at Paramount. Them crying tears over being dicked out of their profits must be pretty ironic to the ghost of Art Buchwald.

Youtube is eating majorly into tv's viewer numbers.

Piracy isn't the only reason studio entertainment is losing marketshare... The marketplace is changing, and stupid companies put their content behind walls.

And what's out there requires the customer to jump through hoops.

Wake up, dinosaurs... wake up.

Charles K. said...

"Pirate websites earn $20 to $200 million in profits per year. "

"There are billions of visits to pirate movie sites annually, resulting in the loss of thousands of movie jobs.....Sixty fewer theatrical motion pictures were made last year, largely because of internet piracy.)"

C'mon Steve, just because this isn't a school assignment and it's not your own work are no excuses for not showing your work or citing your references.

To quote Homer Simpson: "People can come up with statistics to prove anything, Kent. Forty percent of all people know that."

Anonymous said...

What a bunch of hyperbole.
"Billions of visits a year"?
There are less than 2 billion people on the internet (, so each person on average would have to visit these sites once a year.

According to, "" (mentioned in the article) is ranked as the 13,260 most visited site, while is ranked at 21 and gets over 200x more traffic (8 million vs 40,000). Based on, Movieberry earns $150 a day which is .6% of Netflix $25,000 a day. And the vast majority of's visits are coming from Uzbekistan, Sri Lanka, Kuwait, Qatar, and Bangladesh which are all huge markets for DVDs, right? 100% of netflix 8 million views come from the US.

I'm sure there are other streaming website out there, but they likely have the same statistics: primarily used in small countries which don't buy Hollywood movies anyways, and receive less than 1% of the funds due to international exposure than Netflix does in the US alone.

Anonymous said...

Piracy is turning it an amorphous boogieman that takes the blame for any changes in the industry. Since it has no face and no "defenders" it is easy to blame for everything.

Independent Films "dying"? Must be Piracy (because hip Pirates love downloading films such as Cyrus, Jack goes boating, and the Extra Man over tripe like The Expendables and Twilight, not to mention the fact a ton of independent movies are being made but released outside the "system" through the internet [see the thousands of short films on youtube and vimeo])

DVD sales are dying? Must be entirely due to Piracy (and not the rise of on-demand movies, Hulu, Netflix, Blu-ray, redbox, Youtube, video games/ipods and other entertainment options, or the fact we are in a recession and the DVD format is 13 years old and past its prime)

Less movies being made? Blame Piracy (and not the recession, or movie studio's poor financial management [MGM!], or focus on overpriced blockbuster movies which may or may not recoup their costs, or that the market has hit saturation and even good movies may make less money because there are too many options [and more entertainment options competing against movies, including TV shows with movie-style budgets and plots], or the fact that many more "movies" are being made but are not being released through the studio/theater system)

Yep, Piracy will be the doom of us all!

Anonymous said...

Lets be straight about movie costs.

Studio's pay themselves to rent space from themselves so those bloated production costs are inflated on purpose as far as I can tell. One year it's costing 8 million to make an animated feature , a few years later it's 100-200 million. Even if salaries doubled the costs that is only $18 million . That is unprecedented inflation even by housing standards where a $125,000 house artificially inflates to to 500,000. Perhaps the union could give the members an actual accounting of why movies cost that much more. Members are stumbling around in the dark having their salaries cut like at Disney and it is based on the ridiculous idea that the members costs themselves are the problem. How can the union even negotiate when the membership is ignorant of those facts ?

Please address the elephant in the room.

Anonymous said...

I heartily agree with Anonymous 11:58 am. What is the source of the astronomical budget increase on animated films? Are the crews really that much bigger? The infrastructure that much more expensive?

I'd be very interested to see some budget breakdowns and comparisons.

Anonymous said...

Let's see...300 people with salaries of ~80000 working for 2-3 years on an animated film comes out to between 48 and 72 million. And thats just salaries, not equipment and overhead.

How is this not accurate?

Anonymous said...

No movie I know had full crew on for multiple years.

Last movie I worked on was made in 36 weeks. The one I'm on now in less than that.

Anonymous said...

*sigh* Now you're just making work for me to prove the same point.

If you start to break it down, you'll probably come up with the same results.

Visual development and story people, directors etc start first and go for probably a year or 18 months, then the modelers and riggers for 6-12 months, then animators for 6-8 months (or more), editors, TD's etc. Of course, this doesnt include facilities, HR, voice talent, scoring, etc etc etc.

I dont doubt for one second an animated movie really can cost 100-150 million.

Anonymous said...

arrrgh matey! There be pirates about.

I am always too scared that my computer will pick up some STD (system transferred disease) if I ever visited one of those pirate bay places. Although there are a lot of lemon movies I will not pay to see. Too bad they didn't have a site for lemon movies you don't want to pay to see and it was driven by ads.

I bet we could come up with HUGE list of current releases that would do well at a legitimate site like that.

Anonymous said...

Its a corporatist state. Steve explains this time and again. And when you have leverage, you use it.

Consumers, for the first time this century, have real leverage against giant corporations, and they are using it. Which makes Steve's position kind of silly on this.

Steve Hulett said...

C'mon Steve, just because this isn't a school assignment and it's not your own work are no excuses for not showing your work or citing your references.

I wasn't taking notes, and so bullet-pointed major points. (There is one link.)

When I receive more detailed breakdowns from Paramount Pictures, I will post same.

Anonymous said...

Consumers, for the first time this century, have real leverage against giant corporations, and they are using it.

Meaning what? That it's easier to steal, now more than ever?

Honest question. I dont get it.

Anonymous said...

Look I get it that it's easy to hate "the man", and that Studios and their respective organisations are on the war path proposing all sorts of draconian measures that try and limit our freedoms of fair use.

I get it, and I am as loud as the next guy about these issues, believe me.

I won't talk about the semantics of theft vs copying. But plain and simple: downloading something that is copyrighted without paying the copyright owner the proper compensation is wrong, plain and simple.

How is this not clear to anyone?

Just because the studios prefer "outdated" delivery methods (DVD's for example), does not give anyone the right to download something without compensation. If you are unhappy with their business practices, then quite simple, don't download it or buy it.

You DO NOT have a right to watch copyrighted material just because it's not in a form you want. End of story.

Anonymous said...

Its really easy to understand:
They're jacking you


Anonymous said...

Still doesnt give you the right to steal. (plus is makes you look spoiled complaining about a few ads on a Blue Ray disc)

Next time I'm in the drive through and I think the wait is too long, Ill just crash straight through the front doors and take what I want.

Same logic. Seems silly, doesnt it?

Theres no winning this fight, because youre wrong.

Anonymous said...

Anyone who can sit through that horrible nina paley cartoon should be FORCED to pay for it.

No doubt the Russian mafia passed on pirating that self-indulgent wankery. Just like every other distributor.

Bruce Wright said...

I'm not saying anyone has a right to piracy. In fact, I think it's wrong, illegal, and should be procecuted.

What I'm saying is that stupid dinosaur media companies don't understand that piracy is a market pressure, and a signal that they need to adjust their economic model.

By behaving differently, they can deflate the piracy market. It means they need to deliver content differently, and adjust their old methods of gathering revenue based on their product.

Here's one: Sell DVD's of movies that are still in theaters. In fact, sell them AT the movie theater as you walk out!

Oh shit! The theater owners just had a heart attack that I said that!

Anonymous said...

Trying to "guilt" downloaders into thinking they are stealing won't work!

The problem with comparing downloading copyrighted material to stealing tangible objects is that when you steal an object from someone they no longer possess that object. When you download a copy of media, it is exactly that: a copy. The original owner still has as many copies of the object as they want, they didn't "lose" anything except (in the owner's mind) a potential sale.


In the minds of downloaders, they don't feel like they are stealing because the aren't removing any possessions from the owner. And the majority of time the downloader had no interest pay to see/hear the media in the first place (if they were interested in the media they would have paid for it, which is why the box office is still breaking records to this day). They see the download as "testing" the media. If they like it, they will buy it (this happens more often than you think) and follow the artist's future releases. If they don't like it then they delete the file and move on. In their minds the creator is in the exact place as before: the creator didn't lose any possessions and did not gain a sale (since the downloader would have never paid for the media in the first place, they only wanted it for free or reduced price).

The creators see each download as a loss of a potential sale. The downloaders see themselves has hesitant, on-the-fence consumers, and each download is the gain of a potential sale for the creator.

Not debating the downloading isn't illegal, just trying to demonstrate the different mindsets between creators and (young) consumers.

And yes, you have people who download everything and never have the intent to purchase anything regardless of quality/merit. But you also have consumers who buy everything regardless of quality/merit. But both are the minorities of the downloader/consumer spectrum.

Anonymous said...

Well, I disagree because I use Netflix for my "testing," and that still pays the filmmakers.

So even in the face of a reasonable, easy, convenient solution, many consumers will still opt for a completely, 100% free option. There should be protections in place to stop this.

I think they should install infa-red technology to stop video recording in cinemas. Not sure why that hasnt happened.

Anonymous said...

The "problem" with Netflix is it doesn't offer instant gratification for new media. If someone wants to "test" Piranha 3D today, they don't want to wait 4 months for it to be on Netflix.

Look at the shows such as Lost or Glee available on Hulu , they are some of the least illegally downloaded shows because they legally are available online the day after the airing. (although once the individual episode disappears the torrents really pick up).

Actually, if more movies were available to stream legally the day they release in the theaters then you would see less illegal "testers", but that paradigm shift won't happen any time soon. Too many lives dependent on the old system.

Anonymous said...

Or....crazy idea....go see Piranha 3D in theaters

Anonymous said...

With 3D raising prices of ticket to $15 or more, would you pay that much for a movie you were on the fence about?

The people who wanted to see P 3D this weekend saw it in theaters. The people who didn't want to see it at all didn't. The people who were on the fence about it probably didn't spend the cash to risk disappointment. But a percentage of that final group would probably be open to reviewing the film (or a portion of it) first before paying full price. The tech-savvy of that group could do that through illegal downloads. Thus the mindset mentioned earlier.

Although my understanding is you can't illegally download 3D films because they are all blurry (the camcorder needs glasses too). Thus one of the reasons more movies are going 3D.

Anonymous said...

(or a portion of it)

You a trailer?????

Go ahead and keep justifying theft, and Ill keep calling it theft...

Anonymous said...

Downloading is theft, there is no denying that. But you have to look at the psychology behind those who download in order to understand why they do it and why attacking piracy the current way will not work (and what some better solutions to it are).

The trailer is a lie. How many movies have you seen with an awesome 2 minute trailer that were terrible? Consumers don't trust trailers when they are undecided about a movie. They look at reviews, or more importantly peer feedback. But show someone 10 minutes of a movie for free and then they will have a better idea if they want to see it. Some movies do this. Many do not. Internet kids who got used to this on some movies now do it (illegally) to those that don't, and feel no guilt about it as explained above. To them they are protecting their potential investment and offering a potential sale to the creator.

Watch a movie for 10 minutes and you have a better idea if it is for you or not. But this won't work for the "bad" movies because then no one would pay money to see them after previewing them. Instead studios rely on trumped up trailers to dupe the masses in seeing the films opening weekend (and don't send out review copies so people can be warned ahead of time). And if the movies makes money the studios cheer, if not then they blame piracy. And those consumers who paid $15 for a terrible movie regret and try to find ways to avoid it the next time, such as finding a good peer review or testing the file themselves. Thus you have the mentality behind (some) pirates.

And the cycle goes on between distrusting consumers, overpriced theaters, and money hungry studio execs (who keep their money-starved artists in check with the 'You're starving due to evil pirates' line).

Anonymous said...

But you have to look at the psychology behind those who download in order to understand why they do it

People like free stuff. Simple.

(who keep their money-starved artists in check with the 'You're starving due to evil pirates' line).

Im not starving. Im paid well. But if piracy gets worse, I wont

Bruce Wright said...

The "people like free stuff... simple" attitude is exactly why record companies doddled like hell on shifting beyond brick-and-mortar record shops and radio payola "record promoters".

It's also why Apple's eating their lunch, right now. Apple figured out how to get people to buy music:

Sell it one song at a time, not make you buy a whole album to get just the song you want.

Let you *LISTEN* to the song you're buying *BEFORE* you buy it. No more sifting through record bins trying to figure out if the album with the dead pig's head on the cover sounds better or worse than the one with a naked demon lady giving a massage to a mummy...

Get it instantly on your device. Like now. Like, without going to the store.

The market changes. Understand how it's changing, or be driven out of business by it.

Adapt or perish.

Digital technology killed the old record-store business model, not piracy. Steve Jobs seems to be making money selling music, just fine, thank you.

Anonymous said...

I'd like to see an online movie store too. Id buy tons of movies (especially if they are HD and relatively cheap).

But I still wont condone piracy, or even be nice to apologists :)

Bruce Wright said...

I'm not condoning piracy, or apologizing for it.

What I'm attempting to do is explain this as an economic phenomenon.

It may also feel good to condemn teen pregnancy in the harshest terms. Condemn the Terrible Thing all you want. But those numbers aren't going to change until you start handing out condoms and college applications.

There's talking, and then there's changing behavior.

But the strongest changer of all is to shift the economic landscape in your favor. That's what Steve Jobs did.

Jobs saw the record companies falling all over themselves to keep from selling music to those damn pirate teenagers listening to pirate mp3s on their pirate ipods.... which everyone knows is a machine designed to steal music.

They wouldn't put their music on an online music store because that's EXACTLY what makes it so easy to steal... that whole digital thing! Bad digital, run away!

Who's laughing now?

Anonymous said...

Let's see...300 people with salaries of ~80000 working for 2-3 years on an animated film comes out to between 48 and 72 million. And thats just salaries, not equipment and overhead.

How is this not accurate?

It's not accurate because the bulk of production (not including small development crews) runs 9-12 months.

Not 2-3 years.

Site Meter