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How Hollywood Is Encouraging Online Piracy

The death of the DVD is pushing users to piracy



Jude Buffum

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Face it, movie fans: the DVD is destined to be dead as a doornail.

Only a few Blockbuster stores are still open. Netflix's CEO says, “We expect DVD subscribers to decline steadily every quarter, forever.” The latest laptops don't even come with DVD slots. So where are film enthusiasts suppose to rent their flicks? Online, of course.

There are still some downsides to streaming movies—you need a fast Internet connection, for example, and beware the limited-data plan—but overall, this should be a delightful development.

Streaming movies offers instant gratification: no waiting, no driving—plus great portability: you can watch on gadgets too small for a DVD drive, like phones, tablets and superthin laptops.

Hollywood movie studios should benefit, too. The easier it is to rent a movie, the more people will do it. And the more folks rent, the more money the studios make.

Well, apparently, none of that has occurred to the movie industry. It seems intent on leaving money on the table.

For all of the apparent convenience of renting a movie via the Web, there are a surprising number of drawbacks. For example, when you rent the digital version, you often have only 24 hours to finish watching it, which makes no sense. Do these companies really expect us to rent the same movie again tomorrow night if we can't finish it tonight? In the DVD days, a Blockbuster rental was three days. Why should online rentals be any different?

When you rent online, you don't get any of the DVD extras—deleted scenes, alternative endings, subtitles—even though you're paying as much as you would have paid to rent a DVD.

Yet perhaps most important, there's the availability problem. New movies aren't available online until months after they are finished in the theaters, thanks to the “windowing” system—a long-established obligation that makes each movie available, say, first to hotels, then to pay-per-view systems, then to HBO and, only after that, to you for online rental.

Worse, some movies never become available. Star Wars, Raiders of the Lost Ark, Jurassic Park, A Beautiful Mind, Bridget Jones's Diary, Saving Private Ryan, Meet the Fockers, and so on, are not available to rent from the major online distributors.

None of the movie studios would talk to me on the record about this subject, so I can't tell you why so many major movies are missing. Obviously somebody, somewhere, objects to releasing the rights—a lawyer, a director, a studio executive. (Disney's Web site answers the question this way: “Unfortunately, it is not possible to release or have all our titles in the market at once.” Oh, okay. So they're not available because they're not available.)

The people want movies. None of Hollywood's baffling legal constructs will stop the demand. The studios are trying to prevent a dam from bursting by putting up a picket fence.

And if you don't make your product available legally, guess what? The people will get it illegally. Traffic to illegal download sites has more than sextupled since 2009, and file downloading is expected to grow about 23 percent annually until 2015. Why? Of the 10 most pirated movies of 2011, guess how many of them are available to rent online, as I write this in midsummer 2012? Zero. That's right: Hollywood is actually encouraging the very practice they claim to be fighting (with new laws, for example).

Yes, times are changing. Yes, uncertainty is scary. But Hollywood has case studies to learn from. The music industry and the television industry used to fight the Internet the same way—with brute force: copy protection, complexity, legal challenges.

Eventually all of them found roads to recoup some of their lost profit not by fighting the Internet but by working with it. The music industry dropped copy protection and made almost every song available for about $1 each. The TV industry made its shows available for free at sites such as Hulu, paid for by ads.

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