Piracy & the Film Industry
Today more than ever the threat of digital piracy hangs over the head of creative content makers.
The consumption of legal digital content has never been at a higher level. The seemingly limitless expansion of video-on-demand has brought new and old cinema to larger and larger audiences, which in turn has driven economic growth.
The problem is, this holds true for illegal consumption as well.
Digital piracy represents the largest economic threat the media and entertainment sector has ever faced. The rapid evolution and massive scale of wholesale theft have decimated the middle market as we know it, and the creative economy at large is being threatened.
To combat the illicit distribution of content, H&B have created tools for rights holders to help protect their creative property and fight back against digital pirates.
Online piracy threatens the Creative Economy as a whole
The raw numbers are staggering:
- Estimated 450 million illegal downloads in the US using peer-2-peer file sharing networks, not including streaming websites
- Worldwide estimates show over 5 billion downloads worldwide in 2016
- Pirate websites traffic had over 21.4 billion visits in 2016
- 78 million piracy removal requests in March 2016, that’s 1,700 per minute (Google Transparency Report 2016)
- Top piracy websites created over $209 million USD in advertising revenue in 2016
But even with this overwhelming evidence of real-time damage, rights holders still find they have to defend themselves against the perception that they’re greedy captains-of-industry, only looking to squeeze pennies out of poor consumers.
This is often accompanied by pontification on the merits of an open internet and the value in having all people be free to operate their digital lives without interference, followed by an appeal to generosity toward all those who are not able to afford to consume the content.
These are not mutually exclusive ideas, however. There is no reason to conflate the ideology of a ‘free internet’ with the use of technology to steal a person’s intellectual property. People can still be free to operate online as they would like without the theft that accompanies digital piracy. As for those who might not otherwise be able to view work that is “essential viewing” for that person, the structures and mechanisms by which artists get paid online are definitely in need of attention and overhaul, but that does not justify theft.
Artists and creators are very often driven by a desire to give to the world, to contribute good works for society to enjoy. They are often not motivated by financial success, but when they create work that is popular and successful, they are just as entitled to compensation as any other craftsman whose work has sold.
Further, when artists are successful, isn’t in our interest to ensure they have the means to continue creating? The residuals and royalties they receive from audiences are meant to give them the stability to continue creating work that was so good, people want to steal it rather than not watch it at all.
Unfortunately, over the last decade, rights-holders have had little or no recourse to achieve reparation for lost revenues and damages incurred by large-scale piracy. The big dilemma is that, by the time any anti piracy measure has been put in place – it is already too late.
What is Next?
To fully appreciate the scale of disruption that piracy can and does cause, it’s important to understand just how interconnected the industry is. Not unlike the financial crisis of 2008, the distress caused within the market spreads like a virus to other systems in other sectors that rely upon the stability of the core.
Pirated works lead distributors to slow their spend on acquisitions of independent films, which compounds the private equity sector’s ability to leverage pre-sales, which, in turn, inhibits senior lenders’ ability to deploy capital with moderate risk. As a result, film investment is diminished – not because of the lack of appetite for content, but because of the risks associated with the investment class, of which have been exacerbated by digital piracy.
We have closely studied the human interaction behind these large swarms of online data, utilizing basic principles that have been developed from the study of complex systems within the distribution network of illegal distributors.
To better understand the networks within these systems, we monitor upstream and downstream piracy incidences, creating a recorded network of takers and distributors. Cells or ‘nodes’ represent the person obtaining and or distributing content across the links to other nodes and cells.
Digital piracy is very much like a shoal of fish or a swarm of insects – mapping the patterns of these swarms is incredibly difficult, and so predicting their behaviour nearly impossible.
We found that this complexity is governed by far more simplistic rules that govern their interaction, providing us with a more tangible concept to provide a solution. Rules of interconnectivity between participants are far easier to understand and to effect change.
Our research shows that this particular shoal of fish tends to be made up of a smaller, deeply connected set of individuals surrounded by a wide periphery of associated users. We estimate the core of a swarm makes up on average 35% of the cells, but contributes to 95% of the distribution within the swarm.
Therefore, it is by disrupting this core that we can combat digital piracy most effectively.
These cells have a high degree of influence within a swarm. As is often the case, there are leaders, and there are followers, and to get to the root of the problem we have to target the leaders.
But how can we do that? By applying the principles of “emergence,” in which the whole is more than the sum of its parts, we treat the individual cells within the swarm as a whole object, and disrupt the connections between them. Self organisation within an emergent system depends on the rules of interaction and connectivity within itself, so by targeting cells, the individual distributors, within the emergent system and disrupting those cells’ connection to each other, we can effectively destroy the whole.
So, we monitor the upstream and downstream incidences of piracy, separate out the takers from the distributors, and then set our sights on stopping each leader “cell” (those 35% of cells that influence 95% of the digital piracy network). This means we can effectively disrupt a whole network to slow digital piracy. The cure is not easy, but there is actually a cure.