The Movie Studios: Blinded by Piracy

When a bull enters the ring, the matador pulls out a red cape and waves it in front of his eyes.  Predictably the bull goes mad and charges toward the cape.  He leaves all his better instincts behind. 

We all know how the bullfight ends. Not well for the bull.

Replace “bull” with “major movie studios” and replace “red cape” with “piracy” and you have in a nutshell the bind within which the movie studios have placed themselves.

All they can see is the red cape. 

When they need an explanation for any of their myriad woes—bring on the red cape. When they try to think about the opportunities that the Internet might bring them—bring on the red cape.  This obsession with the red cape blinds them to anything new, anything innovative, any thing that might help them invigorate their business.

The red cape was on display recently on the Cannes Panel: Studios Fight Piracy While Indies Embrace Digital Future, reported on by Anne Thompson. The panel featured a lot of back and forth between Ruth Vitale, the executive director of CreativeFuture and Tim League of Alamo Drafthouse about distribution and piracy. One exchange is particularly illuminating.

Vitale, warming to her subject, said that people who download illegally are putting money in the pockets of criminals, the Russian mafia, and felons… That money ”could have gone back into making more movies and TV shows,” she said. “They’re in drugs, child prostitution.”

Like I said, the red cape really causes the bull to get a little irrational. Vitale would have us believe that anyone who illegally downloads a movie is funding the drug and child sex trade. Really?

She then goes on to say that filmmakers should stay away from VHX or Vimeo because they do not use DRM that is approved by the studios. 

I guess Joss Whedon and Kevin Spacey did not get the memo.  They are releasing movies that they own on those platforms today.

Fortunately Tim League was on the panel to help calm down the rhetoric and focus on reality.  As Thompson writes:

 League thinks the solution is to “make the experience of going to the movies compelling,” he said, “to engage with young people and get them excited about foreign language films. I admire edgy engaging films and market them to young people, which puts us in the digital space. We worked with BitTorrent to promote ‘The Act of Killing,’ which has new sophisticated product bundles next month with DV extras as a package with a link to where to download the movie in a legal fashion with a credit card. We have email addresses. We’re not sure if we’re promoting to people to pirate it. Sometimes if our films show up on Bittorrent we high five because it means it cares!”

League and Vitale represent two paths within the film industry.

Vitale articulates the studio position.  She believes that piracy is the defining issue of the Internet.  It is the red flag that shapes every approach the studios take towards the Internet and blinds them to any other approach. They believe that they must convince young people to see the error of their ways and swear off piracy.

I say, “good luck with that”.

League represents another approach.  Find out where your audience is and engage with them on their own terms.  Don’t ask them to change—“make the experience of going to movies compelling.”

If this requires the movie studios to change their business model—change it. If this requires the movie studios to engage directly with their customers—engage directly.  If this requires the movie studios to get on BitTorrent–because that is where millions of film fans live—get on.

Vitale heads up an organization that has the name Future in its title.   Yet, it is focused on the past.

League heads up an organization whose name refers to an event deep in the history of the United States.  Yet, it is aimed at the future.

The red cape blinds the bull. The red cape of piracy blinds the movie studios. 

We all know how the bullfight ends.

About Chris Dorr

I consult with companies on digital media strategy and business development. Clients include Samsung, MTV Networks, Tribeca Film Festival, Shaw Media and Canadian Film Center. I created the Future of Film blog for Tribeca. I have worked in the movie business for Disney Studios, Universal Pictures, Scott Free and in the digital media business for Intertainer, Sony and Nokia. Contact me at chris@digitaldorr.com or follow me at @chrisdorr
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  • Grateful Regardless

    Love Ruth but her gig requires her to parrot that nonsense. As Peter Dekom said, several years ago, those who would fight piracy are building a bridge in the middle of the ocean. Tim has it right: give the audience something they value. The studios mostly make product, not movies, and most exhibitors deliver a sub-par experience in which to consume that product. Not a model for success

    • chrisdorr

      Cotty, thanks for your comment. I agree, Ruth is very smart but the job requires she take this point of view. Hopefully more Tims will emerge. The movie business needs more like him.

  • Ali

    I have tried reporting piracy twice now and noone seems interested or gets back to me so I dont know whats happening so i would probably not report it again.

  • http://www.filmbusinessresearch.com Michael Franklin

    Another stimulating post and I hope the presentation of the debate as a right/wrong zero sum game is a prelude to the interesting middle. Certainly the studio position, characterised as zealous pursuit of traditional model defence though legislation and litigation has much truth to it, the desperation to hang on to a Home Ent ownership model via Ultraviolet etc in the face of the evidence of Netflix etc is stark. But these companies do not have the agility or appetite for risk / perceived defeat to head over to BitTorrent and try and do a deal. The key is an easy, relatively well priced legal alternative to piracy. That means working with exhibitors to collapse windows and realign profit share across the value chain – it has to be a holistic approach. As recommended in recent speeches by Lord Puttnam the smart exhibitors are getting into VOD (Alamo as a perfect branded example). It is the 2929 model or JV approach that offers potential solutions and the challenge will be to achieve this in a way that does not re-introduce the Paramounnt decision issues.

    On a side note I think its a little disingenuous to dismiss the crime/piracy link. There is a wealth of academic research and evidence showing the connection, originally stemming from pirated DVDs as part of organised crime including far worse elements. How far one divorces the consumer is a philosophical question. Jon Taplin’s work at USC Annenberg offers great insight into the complicity of google in piracy and other areas which serves as a important complement to this debate. These things of course don’t mitigate the studio idiocy of hidding intertia behind – “piracy is a crime” notices and warnings to a generation brought up on consumption post napster @filmbizresearch

    • chrisdorr

      Michael, some very good points. I think the middle ground on this panel was represented by Tim League who, though a theater owner, realizes that to get his audience he has to reach out to them where they live–i.e. online and often on Bittorrent. And by the way, some major record labels are doing deals with Bittorrent. There is no logical reason why the major movie studios can not make this effort. They just have to get over their fear and understand the world as it is, not as it was.

      I also believe the crime/piracy link is way overblown and used simply as a scare tactic. Are there some shady characters involved in sites that offer pirated copies of films? Yes Have major US banks laundered money for drug cartels? Yes Bad behavior exists throughout the world. But to hang everything you do on this as a justification for not changing your business is sheer folly and bad business practice.

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