The Motion Picture Association asked L.E.K., an international strategy consulting firm, to conduct a study on the financial losses incurred by the film industry due to piracy. The MPA (the international version of the MPAA) is comprised of seven major Hollywood studios - Buena Vista Pictures Distribution, Metro-Goldwyn Mayer Studios Inc., Paramount Pictures, Sony Pictures Entertainment Inc., Twentieth Century Fox Film Corp., Universal Studios LLP, and Warner Bros. Entertainment Inc.

The overall major statement expressed in the report is that 'piracy is the biggest threat to the US motion picture industry.' I disagree - I believe that lack of innovation is the biggest threat. The results of this report will provide the framework for my own thesis, which is to argue against the idea that piracy will take down the motion picture industry.  The lack of consumer choices and convenience leads to piracy.  This report appears to be pointing fingers in the wrong direction.  Throughout history, Hollywood has been very slow to adopt new technologies - whether they were beneficial to consumers or not. With as much risk as Hollywood deals with daily, any slight change can severely hamper the bottom line. One one hand I can understand their hesitancy, but not their focus solely on fighting piracy. The results of this study will form the backbone for my own research.

In 2004, the MPA appointed L.E.K. to spearhead the study not only to determine financial losses on a global scale, but also to pinpoint the demographics of the typical pirate.

Three major areas that the report focuses on:

-losses due to both 'internet and hard goods piracy'.

-analysis of the cost of piracy as it affects not only the domestic industry, but worldwide as well

-typical pirate profile

Internet piracy is defined in the report as movie goods downloaded from the internet or obtained from a personal source who had downloaded from the internet. Hard goods piracy, meanwhile, takes place in real space - a consumer either purchases a bootleg copy via a commerical source or obtains a copy from a personal source.

An $18.2 billion worldwide loss to piracy was reported. This figure indicates losses to the studios, foreign and domestic producers, distributors, theaters, video stores, and pay-per-view handlers. The MPA studios alone lost $6.1 billion. 80 percent of these losses are a result of overseas piracy. 62 percent represent hard goods losses, while only 38 percent are from the internet. Only seven percent of all digital piracy occurs in the US.

China, Russia, and Thailand represent the top three countries engaging in the most digital piracy (90% China, 79% in both Russia and Thailand). According to the report, piracy rates are determined from 'MPA member company legitimate revenue plus estimated revenue lost to piracy in each market. They are a static snapshot of the percentage of the potential market that is lost due to piracy' (page 6). In other words, the preparers of this report did not take into account any possible market growth if piracy did not exist.

The report also states that the typical snapshot of a digital pirate is male, aged 16-24, and resides in an urban environment.

The countries where the most potential revenue lost is highest are Mexico, the UK, and France. These mature markets ensure higher amounts of revenue compared to still-developing markets like China and Russia. In China's case, the country only allows the theatrical release of 20 non-Chinese films per year, therefore the amount that US studios make there is small compared to the free markets of Mexico, the UK, and France.

This piece is a brief written by Lawrence Lessig in his capacity as counsel for Creative Commons in support of Grokster in MGM v. Grokster (2005).  The argument presented in the brief essentially deals with the issue of free speech enabled by peer-to-peer software such as Grokster.  Essentially, it is argued that due to the high costs of traditional file distribution technologies such as FTP, the ability to host large files such as videos is limited to larger corporations that can afford to do such.  Peer-to-peer software, on the other hand, enables individuals and non-profit organizations, for example, to distribute larger files without incurring excessive fees.  Lessig argues that, should Grokster be held responsible for the copyright infringement of its users, it will limit the ability of non-infringing users to engage in this specific type of free speech.  Many examples are given, one such dealing with the aftermath of the Indian Ocean tsunami in 2004.  Many amateur videos were taken following the disaster, and only through peer-to-peer file sharing were these videos able to be made public, as the cost of traditional file distribution would have made distribution infeasible. and Creative Commons worry that such legitimate uses would be jeopardized if the Supreme Court ruled against Grokster.

This brief is of great importance to my topic.  There are currently very few cases dealing with peer-to-peer file sharing, and this gives another look at one of those.  While it seems that the Supreme Court disagreed with Lessig and Creative Commons, as they ruled against Grokster, it is nonetheless an important in insightful brief.  The issue of free speech is not what usually comes to mind in regards to peer-to-peer file sharing.  This brief provides a multitude of examples of the legal uses of peer-to-peer file sharing, including BitTorrent, and how ruling against Grokster could impede and severely limit such uses.

In the 1999 case Sony Computer Entertainment America, Inc. v. Gamemasters, Sony sought a preliminary injunction on Gamemasters’ distribution of accessories for the Sony Playstation game console. Sony alleged that Gamemasters violated anti-circumvention regulations of the Digital Millennium Copyright Act (DMCA) as well as state and federal unfair competition laws. Gamemasters, a retail store in California, was sued for selling a game enhancing device. The court granted the injunction and essentially eliminated all sales of such devices by Gamemasters.

This external device performed two primary functions when plugged into the Playstation game console. First, the game enhancer allowed users to temporarily modify aspects of the game, similar to the Game Genie, manufactured by Galoob Toys for use on the Nintendo. Nintendo v. Galoob Toys, as decided in 1992, declared that the Game Genie was not in violation of copyright laws as it was not a derivative work of the Nintendo console and the Game Genie was a fair use of the Nintendo game system. Second, and most importantly, this game enhancer permitted players to play Playstation games sold in Japan or Europe which were intended by Sony for exclusive use on Japanese or European consoles. The game discs contain electronic check codes which are checked by the console when inserted. Discs with codes that do not match the region in which the console operated were rejected. The game enhancer overrode this protection.

By invoking the DMCA, Sony stopped the use of potential copyright and trademark violating technologies. However, critics of the DMCA noted that this decision also allowed Sony to continue its controversial business practice. Sony divided its game distribution and operations into separate international regions. By disabling games from one region to be played in another, authentic Sony Playstation games played in one part of the world suddenly became illegal versions after crossing borders. With increasing video game products offering multiplayer and global competition, these restraints pose legitimate threats for the future of fair gaming, especially online games. Such restrictions enabled Sony to protect its anti-competitive business model and possibly promote price discrimination between different areas of the world.

            This essay describes what an MP3 blog is, and how record labels want to capitalize on the promotion that they provide while fighting file sharing at the same time. The essay discusses the types of copyright infringement and fair use and how they apply to MP3 blogs, as well as the factors that cause the court to view MP3 blogs more favorably than peer-to-peer networks. It discusses law suits against Napster and also by the RIAA against peer-to-peer users.  The article explains what establishes liability for infringing use, and the different expansions of the Copyright Act which have been brought by copyright owners in addressing new technologies. It then discusses some of these acts and gives some examples of violators. The next section explains the defense used when copyright owners bring suits, which is fair use, and it lists and describes the four factors in deciding fair use on a case by case basis.

            This essay incorporates basically every aspect of my research into why copyright holders are willing to waive certain copyright in cases such as MP3 blogs, while they continue to fight against much of new technology such as peer-to-peer services. It describes what MP3 blogs are and how they are used and different sites that can link to the unauthorized music.  It shows what the copyright holder needs to look for in order to bring a suit against infringing users, and also explains how the user of the work can try to use fair use as a defense.

            This is a long essay about corporate power in the music industry. The argument is that cross-ownership in the media tends to reduce competition and increases profits, in turn, forcing music production to become increasingly uniform and profit driven, and harming artistic expression. It has descriptions of corporate sponsorship, and the loss of diversity. The next section is about Clear Channel Communications, and how the consolidation takes away jobs, excludes a large variety of music, and provides listeners with a biased source of information. Next, is the analysis of a recent hit, which examines the predetermined song structure which results in homogenized music and play lists, this is called the sound of corporate music. The conclusion suggests that a number of musicians would prefer to circumvent the bureaucratic systems of the industry, and that in order to preserve the artists ability to express sometimes controversial and diverse views, that musicians and the population at large would prefer legislation that moves away from monopolies.

            This article is relevant to my research in finding out why copyright holders are willing to waive some of their copyright in such cases as MP3 blogs, which often involve unauthorized downloading of copyrighted work. In the conclusion of the article, it suggests that a majority of musicians are not so upset about free downloads and many who are independently minded, support distribution systems that are not connected with the industry devotion to profit. Some artists who want to make more controversial material release it for free on the internet. It also suggests that this is a reaction to media consolidation, and provides some argument that more copyright control leads to the growth of monopolies, and the limiting of new technology and expression.

            This article is written by Cary Sherman, president of the RIAA as a response to a speech by Consumer Electronics CEO Gary Shapiro in which Shapiro stated that downloading off the Web is neither illegal nor immoral. Sherman says that statement is wrong and misleading. Shapiro says that legal downloading from record companies and legitimate online music companies is fine but there is a problem with unauthorized downloading of copyrighted material, and sites Title 17 of the United States Code. Sherman writes that the fair use argument employed by Shapiro makes falsely seem as if copyright owners are against fair use, and that the fair use claim is unsupported when it comes to unauthorized use. Sherman argues against Shapiro's claim that downloading is different from taking a tangible property by writing that both owners have been deprived of something of value. Sherman refutes Shapiro's use of the first amendment and also says that companies are in fact aggressively pursuing a more flexible business model that does take advantage of new technology. Shapiro writes that the industry using technology and the internet is beside the point and that the real issue in what Shapiro is saying is that "digital stealing isn't really stealing" and the last thing we need is more polarizing rhetoric.

            For my research on why copyright holders are willing to waive copyright in some instances such as MP3 blogs because the new technology has benefits in promotion, this article is a firm example of the view from the record labels about copyright law and internet uses. It is written by the president of the RIAA, Cary Sherman and gives an argument in favor of strong copyright law, and a rebuttal to a speech by the Consumer Electronics CEO Gary Shapiro in favor of weaker copyright law. It provides the viewpoint of the music industry about downloading, but it is interesting in that it does not mention anything about record companies such as Warner who at times chose to solicit certain independent blogs and will send the bloggers music with the hope that the blog will help promote the record label's artist for free.

            This is a speech given by Gary Shapiro, the President and CEO of the Consumer Electronics Association about growing tension between copyright owners and new technology. Shapiro speaks about how new reproduction technology and transmission technology has increased the fears of the music and motion picture industries. He draws parallels to new technology in the past such as the VCR, and CD and cassette recording. Today with mass availability of copies of music and movies, the content community has used congress, courts, and the media to challenge new technologies. Shapiro says that he believes that hardware and software companies have an interest in working together to see more products,  and that they can misuse source protection and DVD encryption to sell more products while limiting new technologies. Shapiro says that lawsuits have shut down file -sharing services, threaten peer-to-peer networks, challegenged as illegal devices which allow consumers to skip commercials, and has subpoenaed ISPs to identify downloading subscribers. Congress has introduced legislation that will require technology to be shaped by a government-mandated copy protection system. Shapiro comments on the language used by Hollywood and the music industry using words like "piracy" and "stealing" to describe downloading. Shapiro asserts that downloading is neither illegal nor immoral. He says that downloading is not taking away a copy of the product from someone, and in some cases helps promotion. His principles for policymakers to follow ask that a very high amount of evidence be found before restricting technology.

            For my research on MP3 blogs and why copyright holders are willing to waive some of their copyrights and allow the blogs to post their music this speech shows a view which is far to the fair-use and weak copyright law. It is clear support for allowing the new technologies and the internet to be created and exist, and for there to be significant evidence of a negative effect on the copyright holder before the technology is restricted. The key line by Shapiro for my project is when he submits that downloading off the Web is neither illegal nor immoral. He sites fair use as being given on a case by case basis and that in many cases of downloading the use has "been shown to be neutral or beneficial to the copyright owners, and have either been tolerated or accepted as fair use." He also discusses how downloading can even lead to further sales, when people buy the whole CD from the song he or she heard on the internet.

    In Chapter 5 of Free Culture, Lawrence Lessig lays out anecdotes and archetypes of all manner of piracy.  The duplication of copyrighted CDs and DVDs in foreign markets is touched upon, but one of the main salient points is his defense of Peer-to-Peer file sharing networks, the groundbreaking networks and servers which made Section 512 absolutely necessary and the rulings on which still protect YouTube from harm.

    One of Lessig’s major talking points is his attribution of the four archetypal uses of P2P networking: stealing music, sampling music before buying, access to abandonware or other copyrighted content that is no longer available by traditional means, and those who search for content that has no copyright or a Creative Commons license and is meant to be shared.

    This is a highly utopian view of both P2P networking and the internet, but at the very least interesting to consider.  Lessig goes on to discuss drops in CD sales and later Jack Valenti’s ridiculous claims about VCRs as “tapeworms,” just waiting to drive the industry down.  If anything, the VCR and file-sharing networks both paved the way for the kind of content generation and also server networks that my final project will use and draw attention to.

The Digital Media Consumers’ Rights Act of 2005 proposes greater care taken by the music industry in letting consumers know the types of digital rights management included on compact discs that they buy.  It mentions increasing consumer dissatisfaction with current DRM practices, as well as general confusion by the mass public about the majority of new innovations in DRM technology, many of which are implemented without consumer’s knowledge.

    It finds most discs to be inadequately labeled with copy-protection warnings, and assures that it is deemed deceptive and unlawful for compact discs to be sold with inaccurate advertising of their digital copyright restrictions.  In this case, certain discs with copy protection must be clearly labeled that they are not, in fact, regular audio compact discs and that they may not be able to be played in some devices capable of playing compact discs.

    This law can only serve as support for the anti-DRM movement, which would find it even easier to warn people about DRM if items such as this were clearly labeled.  This is legislation concerning a number of digital restrictions that already exist in other formats, but are being brought to light more because of a lack of implementation of these technologies at their outset.

"Piracy battle a global one, Shiner tells AFM attendees." Hollywood Reporter -- Internaional (2005) Vol. 391 Issue 37, p96-96, 1/3p

This article from the Hollywood Reporter describes the message given y Josette Sheeran Shiner on behalf of the US Secretary of State at the American Federation of Musicians.  Shiner states that international intellectual property protection is important for everyone, not just studios in Hollywood.  Shiner states that the problem of intellectual piracy is rampant in the world in nearly all sectors, not just entertainment.

            Shiner credits the MPA for its work protecting film products, but she states that the problem is much broader than the ‘audiovisual sector.’  The same problem that exists with intellectual piracy in film also exists with “manufactured good from baby foods to automobile parts,” Shiner states, highlighting the need for better protection.  In attempts to strengthen protection of US goods, the United States has joined APAC and the G8 with hopes of timely positive results.

            As countries develop protection against piracy, Shiner claims that they tend to strengthen their own investment and brand names as well.  Shiner refers to China as a region in which positive progress has been made to protect intellectual property with encouraging results.

            This article points to the fact that countries that better protect intellectual property, better protect their own property, and in turn help cultivate it.  Intellectual property theft is extremely common in China and as steps are taken to protect rights, brands and exports are cultivated and delivered to the rest of the world.  Piracy in China has greatly hurt the Chinese film industry however, as law enforcement of intellectual property improves, the cultivation of film improves.

            American cinema benefits from this through distribution and potential value for American remakes of movies.  Few mainland Chinese movies are released in America due to the lack of quality from extensive piracy.  However, once practices change, both China and the United State can greatly benefit from better product production, distribution, and authorized adaptation.