To Hollywood's dismay, digital piracy is the big ape in film
NEW YORK: Shortly before Christmas, Universal Pictures plans to unveil its $150 million remake of "King Kong," the 1933 classic featuring an overgrown beast with a soft spot for blondes, a craggy, fog-shrouded island inhabited by dinosaurs and a squadron of planes buzzing the Empire State Building.
The new movie, aimed squarely at the hearts, minds and wallets of the teenage-to-mid-30s audience that Hollywood prizes, has blockbuster written all over it. Peter Jackson, the maestro behind the "Lord of the Rings" trilogy, is directing; Naomi Watts is stepping into Fay Wray's shoes as the imperiled, scantily clad heroine; and the film is rumored to be embroidered with mind-blowing special effects.
But even the mighty Kong may not be safe from the clutches of a nebulous, tech-savvy network of film pirates who specialize in stealing copies of first-run movies and distributing them globally on the Internet or on bootleg DVDs. While Hollywood has battled various forms of film looting for decades, this time seems different. Piracy in the digital era is more lucrative, sophisticated and elusive than ever - and it poses a far bigger financial threat.
"Piracy has the very real potential of tipping movies into becoming an unprofitable industry, especially big-event films," Jackson said by e-mail from New Zealand, where he is putting the final touches on his version of "King Kong." "If that happens, they will stop being made. No studio is going to finance a film if the point is reached where their possible profit margin goes straight into criminals' pockets."
Film piracy is taking place against a larger backdrop of technological and demographic shifts that are also shaking Hollywood.
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Home theater components - like DVD players, advanced sound systems and flat-screen TVs - are helping to shrink theatrical attendance, as more film fans choose to watch while stretched out on their couches. And with the advent of high-speed Internet connections that can deliver large film files to personal computers, the movie business is confronted with the same thorny challenges that the music industry encountered several years ago with the emergence of file-sharing programs.
Hollywood reported global revenue of $84 billion in 2004, according to PricewaterhouseCoopers, the accounting firm. With most theatrical releases amounting to little more than an unprofitable, expensive form of marketing, DVDs have become Hollywood's lifeblood: together with videos, they kick in $55.6 billion, or about two-thirds of that annual haul, with box-office receipts making up most of the rest.
The Motion Picture Association of America estimates that piracy involving bootleg DVDs deprived the film industry of more than $3 billion in sales last year. That does not include lost sales from pirated works peddled online, for which industry insiders say they have no reliable data but which they assume to be substantial.
Online, piracy essentially has no boundaries. The packaging and distribution of bootleg DVDs takes place in a number of far-flung locations; among the hot spots are the United States, China, Russia, Britain, Indonesia, Malaysia, India and the Philippines. At the heart of this network, according to federal investigators and analysts, are cybergeeks who fashion themselves as digital Robin Hoods, stealing from rich studios and giving film fans a free ride.Operating alongside them are hard-core criminals who have the money and connections to efficiently hijack and distribute films within hours of - and sometimes even before - a theatrical premiere.
For the time being, the bootleggers remain a moving target.
Sitting comfortably in the darkness of a theater, a team of four "cammers" goes to work. One sits apart from the group and acts as a lookout, while another unfolds a small digital video camera hidden inside his clothing and records whatever movie is rolling across the screen. The two other members of the team are planted in front of the person doing the recording, trying to keep the path clear of those blackened silhouettes that pop up in the frames of many bootleg films.
Once the movie is filmed, it is uploaded to the network in a race to see who can post the first clean version of a popular film on the Internet.According to the law enforcement authorities and court documents, the Web sites where the films are posted are invitation-only affairs that bootleggers call topsites. Most of them operate in secluded online zones known as the darknet.
According to BigChampagne, a California company that tracks online media use, including illegally downloaded films, there are hundreds of thousands of customers. For the week through Aug. 9, BigChampagne said, an average of 102,895 people a day downloaded the new "War of the Worlds," using a file-sharing program called BitTorrent. In the same period, "Wedding Crashers" had an average of 100,134 downloaders a day.
