August 18, 2005


The Motion Picture Association is the United States' largest studio lobbying group and they're the folks who rate the movies and sue people over piracy. They're always issuing press releases and "studies" about the impact of piracy but...where on earth do they get their numbers?

They estimate that the US entertainment industry loses $3 billion/year in "potential worldwide revenue". How can you estimate money that isn't actually earned? Apparently, not very well.

They really make my heart bleed with this example:

"One real-world example of piracy’s devastating impact on the legitimate marketplace is with the 1999 release of the film Star Wars: Episode 1 – The Phantom Menace. Pirate copies of the film (created by using camcorders in US theaters) flooded the Asian marketplace while the film was still in U.S. theatrical distribution. When the film opened legitimately in Asian theaters, attendance was far below expectations..."

God forbid the studios over-estimated the Asian audience's interest in this DOA stinker. Instead, just think about George Lucas having to comfort himself with only $924 million. He probably wakes up screaming: "I coulda hit a billion! I swear I coulda hit a billion!" I bet he hasn't maintained an erection once since being unmanned by wily Asian pirates.

Then there's their ten-country review of piracy, that you can download a pdf here.

Ignoring the fact that the Taiwanese film industry is a giant smoking crater where no films do very well, the MPA says that the US lost $41 million to piracy in 2002 in Taiwan, up from $30 million in 2000. Where are they getting these numbers? They claim that the seizure of "items related to piracy" went from 1.16 million items in 2001 to 2.32 million in 2002. "Based on the seized material, there has been a significant increase in piracy in two major areas, including pirated DVDs..."

However, in the same paper when talking about South Korea's market they claim that the pirates have become "larger, more secretive, and more sophisticated..." and cites as proof that in 2001 there were  3.5 million items related to piracy seized, whereas in 2002 only 232,000 items were seized. Apparently, this decrease means the problem is getting worse, not better, and "more pirated product is getting into the hands of consumers." Huh?

So an increase in Taiwanese seizures mean the problem is getting worse, but a decrease in South Koreean seizures mean the problem is also getting worse?

Could it be any coincidence that the MPA has been lobbying for South Korea to drop its screen quota system since 1999 (a quota system that many South Koreans credit for creating a marketplace ready for the 1999 renaissance of mainstream Korean cinema) whereas Taiwan has been opening up its marketplace for decades, a practice that some Taiwanese blame for the destruction of Taiwan's domestic industry? In fact, some Taiwanses filmmakers claim the glut of Hollywood product in Taiwan is keeping even popular Taiwanese films from getting competitive screen space.

Taiwan has toed the MPA line, but South Korea hasn't. So maybe South Korean piracy will always be getting "worse" according to the MPA?

Or maybe the problem is that calculating "potential worldwide revenue" (the money that the studios expect to earn based on their projections of past performance) is a fool's game where anyone can say anything they want, and there's no downside in overestimating performance since you can always blame piracy, rather than crappy movies, if your guesstimates aren't met?

Whatever the reason, the MPA seems intent on painting a picture of a massive Asian piracy threat, whether a country's seizure numbers are up or down. My question is: where are they getting their numbers?

August 18, 2005 at 08:49 AM in News | Permalink


do the studios ever realize that -- like Casshern and Hero -- if they hold a film up for 2+ years that means people are going to seek out the film in other ways? Now, I am honest and would never buy anything but a legit import BUT 1) Miramax cracks down on sites selling legit Non-US releases of properties they are still sitting on and 2) not-so-honest people are not averse to buying bootlegs, esp. if the film is held up in limbo by Miramax for 2 friggin years.

You work at Variety, does Miramax get the idea of the mass ill will they have generated, not to mention their butchered releases of older titles?

Posted by: glenn | Aug 18, 2005 10:21:31 AM

I think Miramax doesn't really care. Back when an on-line petition was being circulated (pre-HERO) asking people to boycott their product, several web-masters reported that Miramax was actually sending them the link to the boycott page and asking them to post it. There's no such thing as bad publicity, right?

The thing is, they're right. In the short term (which is the term most movie distributors think in since there's no guarantee any of them will be around in 5 years) for every one person who wants a subtitled and uncut release of LEGEND OF A FIGHTER there's 6 people who didn't even know the movie existed until they heard that other people were upset about it, and now they're buying a copy.

Some companies (Tartan, Vitagraph, sometimes Sony Pictures Classics) really reach out to the fans and make them a part of the marketing. But does it help or is it wasted effort? There's no real way to calculate that.

Posted by: Grady Hendrix | Aug 18, 2005 10:45:17 AM

I'm not entirely sure what the MPA 'agenda' is in decrying the ills of video piracy-are they attempting to work some machiavellan stranglehold on the distribution market? Is it some weird promotional scheme for broadband funneled all-digital movies? Like Grady said, is it to cover one's ass when your movie doesn't do well? It sure seems like it from the numbers they like to throw around.

Because I'm not sure that they genuinely care about this problem from a 'stop piracy' standpoint, though-I went to some enormous mall in Bangkok a few months ago and the movie stand sections were selling the same movies as the cineplex on the top floor was showing. Not in a "Come into the secret back room" kind of way either. Proudly displayed on the racks was "Sahara", "Episode III", "Hostage", etc. right out front. I kept waiting for an angry theatre manager to come down and start yelling, kick over their stands and such, but no such luck. I wouldn't know if this piracy what-not is as blatant in Korea, Taiwan, etc. as that, but I did find the whole experience rather odd.

Posted by: FiveVenoms | Aug 18, 2005 11:52:08 AM

I think online piracy is a legitimate concern but, pessimismist as always, I just know the MPAA will make it harder and harder for me to find legal imports of non Region 1 DVD's from overseas.

I thought the internet was supposed to make everything level (to quote that middlebrow idiot Tom Freidmann)?

Posted by: glenn | Aug 18, 2005 12:05:58 PM

I don't think there is a secret agenda or a conspiracy in any kind of organized sense, nor do I think piracy doesn't exist. But I think the threat of piracy has been greatly exagerrated and I think the MPA has an interest in exagerrating the pirate menace because a) they are throwing a lot of money into combatting piracy and making a lot of noise about it, so it'd look pretty dumb if it wasn't the World's Biggest Danger to Freedom Everywhere that they make it out to be, b) it gives them leverage both in Congress and overseas to get concessions from foreign governments and to get access to members of Congress, c) it serves the psychological issue of making sluggish box office numbers the fault of piracy. I think that's what executives who have to be responsible to boards and shareholders are happiest about, "This year's bad numbers weren't my fault. It's piracy!"

While piracy does exist, I think the dollar figures associated with it are pretty suspect, and I also think that it's s problem that's decreasing, not increasing. China and Hong Kong are prosecuting like never before, these days.

Posted by: Grady Hendrix | Aug 18, 2005 1:42:55 PM

Very interesting stuff, Grady. I think the link to the MPAA report is broken though.

Posted by: Brian | Aug 18, 2005 1:58:39 PM

I roll my eyes at the big hullaballo thrown at piracy in regards to numbers that I did when Metallica kicked up a stink about Napster. Instead of trying to embrace the technology, they fought it and of course, surprising as it may seem, some people bristled at the idea of being told of how they were and were not going to be able to get their music.

If people can get it free, they're gonna. If you make things more accessible and convinient, people will be more apt to get things that way. Why they haven't learned from the whole music via P2P makes my nuerons bleed. People aren't going to buy crap, as Grady pointed out. I sure as hell wouldn't pay for a $20 single. And Real Rhapsody has saved me from doing that on many occasion. I honestly don't understand why they aren't focusing energies that way. They'd get the leg up on booters offering movies avail that way- ppl would get studio quality [as long as their hardware was good..but I digress]. They have it via digital cable already anyhow...

I have a pal that will get bootlegs..but because he likes extras, he'll buy the DVD when it comes out. He just wants to know if it's worth the buy. Makes sense to a point when some bootlegs are cheaper than a theater ticket. -shrug-

Posted by: Chelle | Aug 19, 2005 7:33:17 AM

the only bootlegs I ever bought were films I was terrified I would never see because I heard Miramax grabbed the rights.

Later, I ditched the boots and bought the real, legal Asian DVD's.

However, it was easier to get the bootleg version than it was to buy the legal Asian dvd's thanks to Miramax's strong arm tactics on the sites selling the real non-US releases!

Posted by: glenn | Aug 19, 2005 8:38:31 AM

The link is fixed. Thanks for pointing that out.

Availability is a huge issue and it's not just a problem for consumers. I had the owner of a Chinatown DVD store tell me recently that they want to sell legit DVDs of certain titles, but they don't know where to get them. They don't know the vendors to contact or how it works -- they only know Asian vendors. They're worried about upcoming crackdowns, and if the anglo vendors would just make themselves known they would happily stock their product.

Posted by: Grady Hendrix | Aug 20, 2005 7:15:43 AM

well, on the bright side, Yesasia stocked House of Flying Daggers and Kung Fu Hustle import DVD's before their release in US theaters yet they still don't stock a lot of stuff Miramax has locked up -- though they did recently start selling Police Story and some other old Jackie Chan DVD's in their Asian versions...

Posted by: glenn | Aug 20, 2005 9:02:13 AM

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