Filesharing, the MPAA, and YOU!

Pardon the corny title, I couldn't resist.

Despite the large volume of advertisements about the risks and consequences of illegal filesharing, along with nearly 2000 civil suits issued by the RIAA and impending legislation that would lift the burden of proof from the prosecutor's shoulders when dealing with alleged filesharers, P2P trading of copyrighted works is as popular as it has ever been. With the rising popularity of networks that handle the large file sizes of movies well (eDonkey and especially BitTorrent) and the increasing affordability of media that store large files (writable CDs and DVDs) and high-bandwidth Internet connections, the MPAA (Motion Picture Association of America) has a lot to worry about with regards to piracy.

While it thankfully hasn't started suing its customers yet like the RIAA (Recording Industry Association of America), the MPAA is trying to cut off piracy at the source. It recently sent operatives into movie theaters playing The Day After Tomorrow, equipped with night vision goggles to seek out movie pirates using sophisticated camcorders to record the film.

Last year, more than 52 million illegal discs were seized around the world, in addition to the millions of Internet transmissions of movies in P2P networks and communities. Every month, more than a billion files are traded globally. These are mostly music, but remember than even 0.1% of that count would be a million movies shared every month.

The affect of the proliferation of movie piracy on the film industry's finances is difficult to judge for a number of reasons. Who can say that a user who downloads a movie will not later see it in the cinema or buy it on DVD, due to disappointing quality of the illegal copy or other reasons? Indeed, many users download films they would never pay to see or rent, find that they really enjoy the movie, and only then decide buy it. And, it is impossible to know if most P2P users would actually pay money to see some of the films they download.

Despite all of these unknowns, the MPAA argues that illegal distribution of movies costs the industry as much as a billion dollars every year. And yet, the 2004 box office is on course to be one of the biggest in the last decade, even taking into account the inflation of ticket prices.

In some ways, the MPAA is in a fortunate situation. The illegal filesharing of music was popular a few years before trading movies online became popular. So, the MPAA can look at the history of the RIAA's attempts to curb illegal filesharing and learn a few things. Here's a taste of we have learned:

1. Suing even as many as 2000 of your customers won't stop the majority from sharing. While the initial waves of lawsuits resulted in a decrease of traffic on the targeted FastTrack network, traffic on other networks has increased, indicating a migration, not flight. Filesharing is still going strong, despite the RIAA's fear campaign.

2. Technology designed to prevent copying copyrighted works can be easily circumvented. DRM (digital rights management) technology employed by Apple's iTunes music store has been thwarted repeatedly (and quickly) by freeware developers. A university student overcame BMG's album copy protection technology simply by holding the Shift key when inserting the CD into his computer. Essentially, if any kind of media is played on a computer or any device that can connect to a computer, it can be copied to an unprotected form and distributed. Techies know this. Why the MPAA and RIAA don't it is beyond me.

3. Filesharing software continually improves. Not only has the transmission speed of files - and thus, the number of files traded - increased with the latest generation of P2P programs, but also protection for users against industries like the RIAA has steadily improved. While 100% secure and anonymous filesharing software is likely impossible, new P2P software has made it more and more difficult and expensive for the RIAA to destroy P2P networks or their users, ever since they successfully shut down Napster in 2001.

4. People love the convenience and affordability of online distribution! Apple iTunes had a very successful launch year despite competition from FREE networks offering infinitely larger libraries of downloadable content. Not to mention the obvious popularity of P2P itself.

Taking these lessons into consideration, it would seem that two approaches might be wise for the MPAA to pursue:

The MPAA or a federal agency could set up a voluntary collective licensing program - similar to what is now in place in Canada - that would allow users to cheaply and conveniently obtain the movies they want from existing peer-to-peer networks. The copyright owners would be paid through 'taxes' on items related to filesharing, like writable discs and DVD/CD writers, and possibly membership to P2P networks or Internet bandwidth. The result? Almost no distribution costs for the record industry. Convenience and affordability for consumers. Paychecks for the artists. It's all good.

The MPAA could set up its own online distribution network for its movies. This has already been implemented in a sense via sites like CinemaNow, but certain factors hold the success of these services at bay. One is distribution cost. Online distribution from a central server can be quite expensive for large files like movies - it's several times cheaper to use P2P networks, where the distribution bandwidth is shared by hundreds or thousands of users, instead of burdening a single server. Also, the file quality of streaming films through services like CinemaNow will annoy many, if not most, users. And, not only is CinemaNow's price of movie 'rental' or 'purchase' generally higher than it would be at a video store, but also it charges a hefty monthly or yearly subscription fee! Imagine if your local video store required you to pay a $30-a-month subscription fee and again for each movie you rented, just as before! Again, the distribution costs (and thus, the prices) would drop if these services adopted P2P, even after improving the quality of the distributed media. Finally, the selection of these existing services is still not up to par with what an experienced filesharer can find among existing, FREE P2P networks.

Will the MPAA send more operatives to more of their movies, in hopes of catching more 'uber-pirates'? Probably. Will they start suing the consumers like the RIAA? Perhaps. Will they wise up and embrace the popularity of P2P and use it to further their profits rather than try to kill it? I sadly doubt it. The definitive answers to these questions, in some part, may be answered by whomever is chosen to replace departing MPAA head, Jack Valenti.

Stay tuned.