Category: Piracy

New Study: Impact of Pre-Release Piracy

People like to quibble about the harm done to the motion picture industry by online piracy. They split hairs over things like whether or not each pirated view represents a lost sale or chime in with arguments that piracy is a form of promotion or a natural market reaction to outdated practices.  If a lot of the arguments for piracy sound like rationalizations, it’s because they are.  And when you hear rationalizations you’re hearing the voices of people who know that what they’re doing is wrong.  But even if we were to take any of the pro-piracy rationalizations as serious analysis, they fall completely apart the moment we’re talking about one of the more obnoxious practices in the whole paradigm — pre-release piracy.

It’s happened a lot, but most recently, The Expendables 3 was leaked online three weeks before it was scheduled for theatrical release.  There’s no other way to put it:  pre-release piracy is a dick move.  It says to everyone who worked on the film, most of them regular folks with regular jobs, that you’re actually eager to see the film but that your own narcissistic desire to be ahead of some imaginary curve is more important than all the investment of money and labor that made the film in the first place.  More than any other form of piracy, pre-release piracy is a huge middle-finger to the grips, electrics, camera department, wardrobe, props, etc. that their jobs mean nothing compared to your need to see a mediocre-quality version of the film on a small screen before anyone else sees it in the theater where it was designed to be released.  Okay that’s my opinion, but what about the impact?

A new study by researchers at The Technology Policy Institute at Carnegie Mellon University is the first to examine the effect of pre-release piracy on revenue. Their conclusions state that, on average, predicted box-office revenues can be reduced by 19% by pre-release piracy compared to post-release piracy.  Theatrical release is the one window when there are no other legal means of viewing a film, and market changes caused by digital technology advances have closed that window considerably.  DVDs go on sale much sooner than they used to after a theatrical release, and some films are released in theaters and through VOD channels simultaneously.  Audiences for big, action films like the Expendables franchise tend to want to see these movies with friends, in theaters, and on big screens.  Profitable opening weekends are a critical slice in the pie-chart of returns investors are seeking when they fund these rather expensive films.

People reading this will, no doubt, have various reactions, including at least a few sentiments directed against big, Hollywood action movies; but that is a flawed lens through which to view the problem.  The Expendables 3 isn’t necessarily my kind of fare per se, but that is entirely beside the point.  What matters in the macro view is whether or not the effect of piracy poisons the ground where legitimate business should otherwise thrive.  When that happens, it’s detrimental to the entire, economic ecosystem in the industry.  Anyone who thinks they can cherry-pick-pirate what they consider the “corporate” fare out of existence and protect whatever their idea of a “better” film might be, is sorely mistaken.

In the big-movie market, if investors are scared off major motion picture investment because pre-release piracy threatens the most critical phase of first sales, that means fewer films get made overall and that the only big films that do get made employ financial models to offset expected losses.  In other words, if it can’t be in a Happy Meal, it won’t be on the screen.  But the smaller movie market has similar challenges with regard to windows of opportunity to recoup investments, and that translates into the probability of making the next film.  If those windows are artificially closed by piracy that preempts the real market from voting with its pocketbook, this will not result in a healthier industry by whatever measure, economic or cultural, you prefer to use.

With easy access comes easy hypocrisy.

I can’t help but be aware of a disturbing harmonic buzz in my head when I read two stories on the same day that point to a particular digital age dichotomy. Remember Sarah Jones? You might have helped her story go viral. Sarah was a camera assistant, who was killed when she was struck by a train during filming of the Gregg Allman biopic Midnight Rider. I read today that the producers of that now-cancelled project have surrendered themselves to Georgia State authorities to face charges of involuntary manslaughter stemming from the February 20 disaster. But also today, I read that the app Popcorn Time, which makes movie piracy easy for everyone with its Netflix-like interface, is being “improved” for the Android platform. The hypocrisy underlying the concurrence of these stories is typical of our times. The same technology that enables people to know about Sarah, to share her story, even to join the campaign pledging better on-set safety, also allows some of the very same individuals to flick a thumb and start pirating motion pictures that are made by tens of thousands of people just like Sarah.

Here’s a clue:  if you enjoy motion pictures and actually care at all about the well being of the individuals who do the heavy lifting to make those films happen, don’t pirate. It’s a no-brainer. In an effort to justify this behavior, you can quibble all you like about where you think (because you actually don’t know) the money goes; but in general, the money (a.k.a. the project investment) pays for worker wages, union support, insurances, location fees, and, yes, safety procedures and personnel. Unfortunately, accidents and negligence still happens; and it is always the responsibility of managers and fellow crew members to keep checks on our ingrained culture that wants to get the shot at almost any cost. Surely, firsthand accounts of the Midnight Rider production sound like the kind of amateurish crap that goes on all the time and thankfully only rarely results in serious injury or death. So, while I’d certainly stop short of saying piracy kills filmmakers, I will not hesitate to say that, in general, economic stability is better for maintaining worker safety in every industry. And we have yet to fully see the effects of piracy on this industry.

We have a bad habit of talking about piracy with regard to finished and popular filmed entertainment. Partly, this is because it suits piracy’s supporters to say things like “XYZ tentpole made a gazillion dollars, so piracy does no harm and probably even helps.” But for every Avengers and Game of Thrones out there, there are hundreds or thousands of small and medium budget pictures being made, many of which are the films most treasured by serious fans. 

Digital-age utopians love to extoll the virtues of independent, guerrilla filmmaking; and when they do, it’s a little like listening to middle-class white kids gripe about the struggle of some oppressed minority. It’s both true and utter bullshit at the same time, especially if the self-appointed proponent of indie filmmaking is also pro-piracy. The reality is none of these people has a clue about the very specific set of skills Sarah Jones had developed and was developing in her role as an AC. Those skills don’t come cheap, and neither should they. But among the indisputable ill effects of piracy is that it exerts economic pressure on the industry as a whole, and it will always be the small to midsize, indie producers who will present the earliest symptoms of the diseases caused by this pressure. These symptoms may include lower standard wages for skilled workers and/or shortcuts around various production practices that affect general working conditions, including safety. 

Yes, Sarah’s untimely and entirely avoidable death should be a wake-up call to production teams everywhere to remind themselves that no film is worth unreasonable risks to a crew member’s safety. But as this tragic story also draws attention to the many otherwise invisible hands behind the scenes, perhaps consumers ought to consider their responsibility to support a sustainable industry rather than casually line the pockets of poachers who do absolutely nothing.

Lefsetz Says Losing Value is Progress

From time to time, one encounters an editorial that so deftly weaves the offensive with the inaccurate that it leaves the reader stammering.  I suppose this was the goal of the latest OpEd from digital futurist Bob Lefsetz, which appeared in Variety last week under the title “Film Biz Can Learn a Few Things From the Music Industry When It Comes to Piracy.”  I quote:

Thank God we’re in the music business. We’ve already been through the transition; we’ve already been pushed back to zero. We’re in an era of rebirth so strong that if you think the music business is in trouble, you’re not in it. Blockbuster acts make more money than ever before. Piracy has been eviscerated, killed by YouTube and legal streaming services, and from here on, it’s only up.

If we strip away the tone of Lefsetz’s article, which conjures a notion of fiddling while Rome burns, and just mine it for its didactic elements, he appears to be asserting this:  that the music industry, after being forced finally to understand the digital age, is now on the leading edge of a financial renaissance, embracing and learning to coexist with technological reality that has transformed consumer demand.  Despite the underlying, economic reality that the music industry is worth about fifty percent of what it was fifteen years ago, Lefsetz could not be more sanguine about its future, and he challenges the film industry to learn quickly from music’s example in order to spare itself some pain.

Central to Lefsetz’s ebullience is the continued well being of what he calls the superstars.  He offers the following:

Superstar talent may make less money off recordings than in the past, but the live business far exceeds the money it once made. And then there’s sponsorships/endorsements and privates and sync and so many avenues of remuneration that no one who is a superstar is bitching.

Never mind that what Leftsetz is saying here just ain’t true or even mathematically possible, the elitism inherent in his proclamation is a direct contradiction of those democratizing promises made by his kindred techno-utopians in the first place.  Because what he’s saying is, “If you’re good, you’ll make money,” but by “good,” he means a blockbuster performer like, say, Lady Gaga.  But what if you’re good like Tom Waits or Rufus Wainwright?  Are these musical geniuses, who do not have screaming hordes of teenage fans or, heaven forbid, endorsements from Doritos, not good enough to make it in the brave new world Lefsetz foresees?  And I like Lady Gaga; I think she’s fun, funny, and talented, but I certainly think we need to keep fostering a more diverse library than artists like her are going to produce.  Unfortunately, in Lefsetz’s future the Gagas make a living (and we’ll get to what kind of living in a moment), while the fledgling Wainwrights remain hobbyists.  Not only is that unfortunate for culture, it’s unfortunate for the subsidiary jobs that won’t be supported by that next Wainwright not going pro.  And for all the exuberance, the data are clear that the disruptive technologies we’re talking about are not replacing those jobs.

As for cinema, we’ll set aside the apples-to-oranges flaw predicated on what I assume to be a void in Lefsetz’s knowledge about filmmaking and just stick to the macro view of the market he’s projecting.  If we apply his same “superstar” rationale to the film business, what we conclude is that the Marvel Comics franchise will be fine — and I have nothing against it — because those kind of films can always sell Happy Meals, but the next Wes Anderson, John Sayles, or Marjane Satrapi can expect to see the Spotification of their earning potential as summarized in a recent tweet by Bette Midler stating that 4.1 million plays on Spotify earned a whopping $114.  If you’re an indie filmmaker, try selling that kind of model to a prospective investor.  See, the part where Bob is just flat out lying about the future is that, if you’re good (i.e. make something people want), you will be presented with a choice between being pirated and earning nothing or streamed legally and earning next to nothing.

Finally, Lefsetz says something so inscrutable toward the end of the article, that I can only conclude he actually hates successful creators.  He says the superstars will still make good money, but of course not as much as techies or bankers.  It’s one of those short, stupid statements that act like a fragmentary grenade in the mind because it’s just some arbitrary opinion presuming to set a value on something people actually still demand in large volume.  An uber-wealthy banker is practically synonymous with criminal  to many people these days, so why not say, “Superstar musicians will never make as much as drug kingpins?”  It makes as much sense.  And which “techies” is Lefsetz talking about?  Because unless they’re saving lives, who decided their contributions are worth so damn much?  Okay, the market did, but only sorta.  I mean Zuckerberg is a billionaire, but that’s valuation based on speculation by investors, which more or less sums up the economic roulette game that is Silicon Valley.  Is Lefsetz really saying that Zuck’s real-dollar value is greater than, I don’t know, Bono’s in a consumer-based market?  Let Facebook charge for accounts, and we’ll find out.  No, what Bob is saying is that Bono is a big enough star to comfortably survive the devaluation of music caused by technology, and then he’s arrogantly suggesting that what we’re seeing is a rational market.  The part he’s leaving out is the next Bono you’ve never heard of, and quite possibly never will.

I think the film biz can learn one thing from the music industry with regard to piracy:  kill it as soon as possible.