KPMG Report – Movies & TV Widely Available on Legal Services

I’ve lost count at this point how many times and ways I’ve rejected the premise that piracy is a consumer-driven response to claims of scarcity in the market, especially in the United States; but now KPMG has released the results of a study of motion pictures and television programs that rebuts such pro-piracy claims with actual data.  You can read the details of the report for yourself, but suffice to say that if you’re an American, you really have no excuse not to be watching filmed entertainment through one of many available legal channels.  From my point of view, the KPMG report doesn’t reveal a lot that cannot be surmised anecdotally simply by scanning available titles on iTunes, Amazon VOD, Google Play, Netflix, Hulu, and so on.  But the report does verify these casual observations for anyone seeking a more methodological examination.

Naturally, KPMG could not study every possible title and account for every taste, but by looking at a sample of 808 unique films with measurable popularity based on revenue, critical acclaim, and awards, the firm found that 94% of the films studied were available on at least one (and in most cases several) of 34 legal distribution services included in their research.  These services included Subscription Video-On-Demand, ad-supported Video-On-Demand, and Electronic Sell-Through services.  The study did not even include TV-everywhere services or online catch-up services offered by networks for fans who might have missed episodes when broadcast.  Naturally, the report also does not look at original programming for web-based networks like Netflix’s House of Cards, though shockingly enough, these programs as well as network titles made rapidly available on such services are still pirated in remarkably high numbers.

Data aside, I can say personally that I currently use four non-broadcast, web-enabled services these days and still don’t have time to watch everything of interest. And so, I continue to wonder what kind of ultra-leisurely lives are led by those who complain about a lack of access to filmed entertainment.  Simply put, if you need pirate sites to feed your demand for these media, you have WAY too much time on your hands. Certain individuals may claim that specific titles of interest cannot be found through any legal channels, and such complaints often give way to over-reaching claims that piracy is about preserving culture; but year after year, sites like TorrentFreak reveal that the most pirated titles are, not surprisingly, the most popular titles according to the same kind of criteria used by KPMG for its study.  All highfalutin claims aside, if pirate sites had to rely on fans of arcane, art-house cinema, they would all fold.

To put the time thing in perspective, if we only count the titles included in the KPMG study, they translate into roughly 6.5 hours of viewable material per day for a whole year.  I don’t know any adults with full lives, jobs, responsibilities, etc. who have 6.5 hours a day, every day to watch TV shows and movies. The only people who have that kind of free time are children, who really shouldn’t be watching that much of anything, legally or otherwise.  And I suppose adults who possess great wealth might have that kind of time on their hands, but then they can afford all manner of access to media and are far more likely to spend their leisure time sailing or heli-skiing or something more exotic than six-plus hours a day watching TV and movies.  So, claims of scarcity by anyone in the US at least really need to be scorned and then ignored for the adolescent whining that it is.

One aspect of this subject I do find interesting is that despite chronic claims by various pundits and consumers that legacy industries need to “adapt,” the filmed entertainment industry has actually responded very rapidly to changes in viewer habits and desires as consequences of changes in technology.  In fact, industry-wide modifications and even experiments in distribution have been virtually in synch with advancement in the capacity to send and receive high-quality video signals worthy of our high-quality monitors and televisions.  One chart on Page 8 of the KPMG report shows a trend in decreased time between primary and secondary release of motion pictures, and this downward curve over the period studied more or less matches the technological improvements that make services like Netflix and iTunes work in the first place.  When you consider the scope of these industries as well as the number of potential stakeholders in a particular title (e.g. the number of licensees involved), the industry as a whole has actually done a pretty good job of keeping up with the times.  I get that there remain a number of Veruca Salts out there singing “I want it now,” still unsatisfied perhaps with a three-month window between a theatrical release and a low-cost, online rental; but certain demands are  simply unreasonable if we’re to have a market at all.  Of course, while waiting for that one title to become available, the KPMG report shows that even Veruca has legal access to about 585 hours of other things she can watch.

History Loop: Film & Copyright

Last weekend marked an anniversary in copyright and film history.  On August 24, 1912, the 1909 Copyright Act was amended under the leadership of New Jersey congressman Edward Townsend to protect motion pictures as a medium distinct from photographic works.  In the century that has since passed, filmed entertainment became, and continues to be, one of the most important products made in the United States, both culturally and economically.  That extending copyrights to protect the medium itself was a legislative move of unprecedented value to society is, I believe, beyond question.  Yet, for those who know their film history, 1912 does unavoidably draw the mind to American cinema’s uniquely turbulent beginnings.  While it may be tempting, as certain critics read what follows, to vilify copyright law because of the players involved at the time, that would be missing the more subtle idea that we may be witnessing a historical remake of sorts with a very different cast of characters.

From the earliest days of working motion picture technology, the craft, the business, even the film stock itself was volatile.  “The flickers,” as they were called, literally used to explode, but people made and watched them anyway, using projection booths lined with sandbags to mitigate potential mayhem.  What better metaphor could one possibly find to express the passion Americans feel about their movies?  Just as they were called “vulgar” at the turn of the last century while audiences viewed them in secret, today we still love the movies even when we’re complaining about them. And the number of Americans who work in some way related to the technology of moving images is far too varied and nationally dispersed to be described by the single word Hollywood.

But before there was a Hollywood, the center of American motion picture production was indeed New Jersey, and the major producers grew as extensions of the manufacturers and patent holders on the technologies that made film possible.  There is no getting past the fact that these business owners were ruthless men or that the Townsend Amendment, proposed as it was by a New Jersey representative, was almost certainly one component of a tactical design to maintain exclusive ownership of all production and distribution.  While it is not unreasonable to say that contemporary, independent filmmakers are courageous, it’s worth noting that around 1912, being “indie” could get you killed.  In fact, the studios we think of today as “Hollywood” were all founded by independent filmmakers, some who risked life and limb to defy an illegal cabal known as The Patents Company, comprising producers like Edison, Vitagraph, Biograph, Kalem, and Selig.  Also known as The Edison Trust, these producers attempted to use injunctive power to control production based on certain patent claims.  One particularly flimsy claim was ownership of a process called The Latham Loop, which rationally parallel’s the contemporary move by Amazon to patent the process of photographing items on a white background.

Anyone who has ever loaded a film camera or projector knows that one must make loops above and below the film gate in order for the celluloid to pass smoothly, advancing one frame at a time.  The Patents Company laid claim to ownership of this process — a claim that was rejected — and since they could not rule by law, they employed other methods, including intimidation and violence to stop independent projects by such filmmakers as Carl Laemmle, founder of Universal Pictures.  A common practice, according to the pioneer director Allan Dwan, was the use of snipers to fire at the cameras to disable production, but there were also assaults and shootings of production workers.

The storybook version of film’s migration to California is all about sunshine and the accessibility of varied locations, but a more acute motivation for the westward trek was the independents’ need to get away from the Patents Company and their heavies. Allan Dwan is among the best witnesses to this transitional time, beginning his career on the East Coast, then establishing one of the earliest California studios, Flying “A” Studio in La Mesa, CA.  He explains in Peter Bogdanovich’s wonderful collection of interviews Who the Devil Made It? that it was smart practice to film scenes in remote locations because proximity to a railroad put your crew within reach of Patents Company goons sent across country to break up the shoot.  Additionally, because of this persistent threat, many of the gun-wielding cowboys and gangsters in those two-reelers were in fact gun-wielding cowboys and gangsters, who served as both production security and as background characters.  Dwan tells the story of one encounter with a Patents Company thug, who arrived one day in La Mesa:

 “We took a walk up the road to talk it over.  I hadn’t been out of college for too long and was in good physical shape. So I wanted to get him far enough out of town to see if I couldn’t beat his brains out. We stopped at a bridge over an arroyo where people had thrown some tin cans.  There was a bright one sitting out there, so to impress me he whipped a gun out of his shoulder holster and shot at the can and missed it by about five yards. I pulled out my gun and hit the can twice, and that afternoon he left town. He was accompanied to the depot by my well-armed cowboys.”

Of course, Dwan and his contemporaries went on to become part of the studio system, which produced just about every classic motion picture that ever made a fan or  budding filmmaker fall in love with the movies.  Yes, business was still business, and as in all business, there were villains and heroes and plenty of prosperity and heartbreak to go around; but the important shift with the triumph of Hollywood over the Edison Trust was a move away from technology-based claims on the right to produce toward competition among the studios predicated on the talent they could get under contract. And from the late 1930s to the late 1960s, this system produced an extraordinary volume of films, including at least a few titles that will be on any enthusiast’s desert-island list.  This contract-based system laid the foundation for the next inevitable phase in the industry — name recognition and the transfer of power to individual artists.  Yes, this began with movie stars, and to be sure, not every actor is a great director or producer, but the breakup of the studio system coincides with the ability of individual artists in several disciplines to control their work based on their capacity to draw a crowd.  As a result, most feature films today are produced by hundreds, if not thousands, of independent production companies.

A century and some change since the Townsend Amendment, we’re reviewing copyright and arguing about its relative value in a time antithetical to all that the Latham Loop represents.  Where once manufacturers who held patents on technology tried to hyperextend their control over creative works, today’s manufacturers and technologists are driven to put more and more means of production in the hands of every prospective filmmaker in the world.  As such, arguments made in the blogosphere and in congressional chambers say that low-cost digital capture technology combined with Internet-enabled distribution models means that copyright loses relevance in this “new market.”  But what I find interesting at this moment in history is that it seems to me those who assert such claims are making the same mistake as the Patents Trust Company — looking at films as though they are produced by the tools rather than the people who wield the tools.  Affordable, digital cameras and free distribution on YouTube have nothing to do with the value of a film being protected under copyright. What’s being protected by copyright is what a film makes us feel; and so this recent anniversary, though it pays some reluctant homage to men of dubious intent, is indeed a celebration of the American filmmaker.

Lionsgate Aggressively Pursues Leak of Expendables III

Well, what have we learned about pre-release piracy and its likely impact on this past weekend’s lackluster performance of Expendables III at the box office?  About two weeks ago, someone who had access to a DVD-quality file of the franchise’s latest installment leaked that file for the purpose of upload to illegal file-sharing sites; and prior to film’s release on August 15, it had been viewed an estimated 2.2 million times.  Some industry watchers will say that piracy clearly played a role in this case, damaging critical opening-weekend sales; others will point to the possibility of “franchise fatigue” and say that, with or without piracy, fans of the original Expendables might not have turned out for Number Three in profitable volume anyway.

For sure, we can expect folks to solidly assert one view or another depending on their opinions about piracy (and perhaps of the franchise itself), but the truth is that we probably can’t know with any certainty how many ticket sales did not materialize due to the leak.  What we can know, however, is that is that it shouldn’t bloody matter with regard to the larger conversation about piracy.  I say conversation generously because it isn’t a conversation any more than arguing with my seven year-old about bedtime is a conversation.  As I said in my last post about this story, pre-release piracy is a dick move; and if nothing else, it would be grand if stories like this leak would help place this narrative that piracy is “about something” into the lunatic fringe where it belongs.

I’d like to point out that the two million plus “fans” who chose to watch this film before its release will not be the targets of Lionsgate’s aggressive legal pursuit of the players responsible for the leak.  As such, it would be great if we could mothball this tedious tale writ by the whiny defenders of piracy (including Peter-I-hate-prison-because-they-don’t-serve-vegan-Sunde) that continues to cast individual viewers as victims in this context.  To the contrary, Lionsgate is very much out for blood it seems, but they’re gunning for the people who actually stole from them and profited by doing so.  In fact, the production company last week was granted permission by District Court Judge Margaret Meadows to force the likes of Google and GoDaddy to provide the identities of site operators who had been hosting copies of the film, and a round of subpoenas was sent out.  This was in addition to Lionsgate already filing suit against six file-sharing sites for hosting copies of the leaked film.

There’s more, and there will be more to come from this story.  This kind of piracy is a particularly big deal.  It begins with an act akin to embezzlement, someone in the production chain taking a product with a $90-million-dollar price tag and selling it to a black market before it even reaches the legitimate market. That’s not a social agenda in action. It’s not about diffusion of culture or the democratization of access or free speech. It isn’t a response to “Hollywood’s failure to adopt new distribution methods.” Whoever stole the original file wasn’t thinking about any of that crap, he was just doing it for money.  And he stole from his friends and colleagues.  That’s all this is about.

So, no, the viewers of  the pirated Expendables III will almost certainly not find themselves in the crosshairs of Lionsgate’s lawyers, but there’s no avoiding the fact that without their participation, piracy-for-profit simply wouldn’t exist.  If you don’t want to see a movie, don’t see it.  Let films like any other product live or die in a legitimate market on their own merits.  If you do want to see a film so badly that you just have to watch it online before its release and without paying for it, then at least have the decency to shut up about it. Because it’s just a dick move. Nothing more.