Piracy: The New Business Model
Through the digitalization and advancement of network structures such as server-based, peer-to-peer (P2P), and torrent file sharing on the Internet; it is now easier than ever to illegally copy a digital product. Producers and distributors of a digital product can easily make duplications of the original and distribute them either legally or illegally over the Internet. Furthermore, an individual can duplicate and distribute a digital product through personal devices such as a computers, CD writers, or DVD writers. The Internet has become one of the most popular methods to distribute these digital products. With the increased ease of media sharing, crimes of movie piracy have drastically increased over the past decade. A recent study by the Institute for Policy Innovation (IPI) reveals that Movie Piracy not only has a direct impact on the movie business, but that is also affect the US economy on a larger scale. The research is based on the outcome of the MPAA funded LEK study that revealed that the movie industry lost $1.3 billion in the US, and $6.1 billion worldwide. Based on these figures, the IPI concludes that Movies Pirates (online and offline) are responsible for $5.5 billion in lost annual earnings among U.S. workers, 141,030 jobs lost, $837 million in lost annual tax revenue and $20.5 billion in lost annual output to all U.S. industries. Movie piracy involves instances of either illegal copying or bootleg materials. Illegal copying relates to illicit copies made of an authentic DVD, VHS tape, or Video CD, either legally or illegally obtained. Individuals might make copies of a movie they purchased or received illegally from third-party copies of authentic goods. For example, a film critic providing copies of an authentic film to friends and family before its wide public release would be an example of illegal copying. Bootlegging in the film business is primarily due to individuals secretly using camcorders in a theater who pass on the video to third parties for illegal duplication and quick distribution. There are three main forms of movie piracy: camcorder piracy, optical disc piracy, and Internet piracy. Each form of piracy provides a channel for illegal copying and distribution of films, Camcorder piracy concerns the illegal recording of a movie at its release by a theater patron or cinema employee. This practice is the main source of illicit film copies, about ninety percent of all pirated films, which end up in the illegal stream of goods on the Internet and in hard goods piracy in the real world (Smith & Telang). Optical disc piracy concerns bricks-and-mortar factories, these optical disc factories can generate hundreds of thousands of counterfeit discs from illegal and/or bootleg copies of movies in a range of digital formats for quick distribution and sale in the real world. Unlike camcorder piracy, illegal copies made in these factories tend to be of high quality because they utilize the same technology and equipment used in legitimate replication factories (Smith & Telang). Internet piracy relates to the hacking of vulnerable Web sites to steal movies or defeating digital rights management (DRM) tools on authentic films and then posting the materials on the Web for illegal file sharing. In an attempt to combat the loss of revenue spurned from piracy, the Motion Picture Association of America (MPAA) along with its global counterpart, the Motion Picture Association (MPA), have followed in the footsteps of the Recording Industry Association of America (RIAA) in its battle against music piracy, by using a multifaceted attack from courtroom, legislative, and technological strategies in an attempt to thwart piracy. The film industry has sued movie consumers and open content sites, like YouTube, and the Pirate Bay and for copyright violations and have won cases against companies offering file-sharing and duplication software for DVDs. From a...
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