Hollywood still doesn't understand why people pirate content
by Ben Drawbaugh 
posted Feb 27th 2009 at 7:53PM
We believe that the only way to really understand what is going on is to listen to both sides and this one of the reason why we like Home Media Magazine. We feel like it gives us an inside perspective into the minds of the Home Media market, and thus Hollywood. This recent post on said site by Erik Gruenwedel really exposes how Hollywood still doesn't understand piracy. While we recognize that some people will steal just for the sake of it, we really believe that most prefer the legit route -- when given a choice. But the tech savvy looking to move forward with how they consume content really don't have many options right now. With the CableCARD HTPC fiasco and the prices plus restrictions that go along with services like iTunes and Xbox Live Marketplace, what else is a geek to do? For a brief moment there with offerings like Hulu, It almost seemed like Hollywood was coming along , but then recently their true colors were revealed once again. The real problem of course is that while consumers look at technology a way to improve the way they consume content, Hollywood sees it as a threat, and even worse, as just a way to increase revenues and control over the content. And as far as downloading movies goes, can you say release window?
Filed under: Industry
Reader Comments (Page 1 of 1)
Tony @ Feb 27th 2009 9:36PM
Come on.. no one likes to be limited and hancuffed.
Eventually iTunes is gonna get shot in it's foot with it's Limitations and it's communism acts.
minimalist @ Feb 27th 2009 8:25PM
"While we recognize that some people will steal just for the sake of it, we really believe that most prefer the legit route -- when given a choice"
Its a nice sentiment and I really wish it were true. I used to repeat this mantra all the time with regards to music. But as several experiments with the pay-what-you-want model (Nine Inch Nails, Radiohead, etc) have proven, the majority of people will still steal even when given the choice to do the right thing for very little money. Reasonably priced DRM free music choices have definitely helped, but its not anywhere close to making up for the decline in physical sales.
It's sad really that people are so selfish. They'll essentially find any excuse in the world to justify what they were going to do anyway ("music sucks these days anyway", "the artists don't really make any money off of record sales", etc...). And when you give them what they claim they want they just switch to new excuses.
I guess all we can hope for is that industry people realize that they will never have the market they once had and that some legitimate money is better than nothing. But if they keep the media locked down they are well on their way to getting a whole lot of nothing.
Ben @ Feb 27th 2009 8:34PM
Actually I do think music is different. Call me crazy but I think musicians should get paid to perform not to write one jingle and be set for the life. The purpose of copyright is to motivate to create, not to do the opposite.
Also, the cost of music is still pretty high. I'm not familiar with the examples you gave since I really don't listen to music -- you're officially old when you stop looking for new music to listen to.
dagamer34 @ Feb 27th 2009 9:50PM
Honestly, I do wish to pay for content legally, however the way TV works just isn't the best way anymore. With the Windows Vista CableCard business, I can't watch any premium channels without paying for a new computer. That's BS!
It's really just easier to setup a Windows Media Center PC + uTorrent and automatically download TV shows.
radarskiy @ Feb 28th 2009 2:21PM
"But as several experiments with the pay-what-you-want model (Nine Inch Nails, Radiohead, etc) have proven, the majority of people will still steal even when given the choice to do the right thing for very little money."
However, NIN and Radiohead also made a boatload of money. I submit that revenue that you ACTUALLY receive is more important than revenue that you could potentially receive but don't. For some people the reservation prices is zero and will always be zero and it's not worth spending any money pursuing it.
Also, it's hard to categorize the act as "stealing" when you were specifically allowed to have a copy zero price.
acme @ Feb 27th 2009 8:46PM
because i don't want to pay for entertainment
Marc @ Feb 27th 2009 8:50PM
"Hollywood sees it as a threat, and even worse, as just a way to increase revenues and control over the content."
Why is it bad to increase revenue and have control when you are spending millions to create content?
I have no understanding of this argument... how is this different than any other kind of goods or services that every other company produces?
Because technology lets one procure the content anonymously doesn't remove the right of the creator to charge whatever they want for it, nor give the right for someone to decide they don't think it's worth the value the creator puts on it.
If you think the price of movies are too high, don't buy them.. that will send the message very quickly....
How complicated the restriction shouldn't be a bearing on the decision to pay for it.
Just my .02. (and yes, I work in the film business.. and get paid to do so... if the studios don't get paid so they can pay people like me...... :))
spankdog42@GMAIL.com @ Feb 27th 2009 9:32PM
Because you are screwing people.....Your content is most definitely worth less if it can be gotten for free (even if illegal)....
z0phi3l @ Feb 28th 2009 7:44AM
We HAVE been sending them the message, when P2P exploded the media conglomerates got the message, we don't like paying full price for crap, so what do they do? They decided it was better to sue their consumers, add in draconian and illegal DRM schemes instead of making a better quality product at a lower price.
Xyzzy @ Feb 28th 2009 9:10AM
Marc -- When Ben's talking about "control," he's not advocating that consumers be able to steal and share what they bought with others. He's talking about the fact that the studios are trying to make it so you can't do ANYTHING with the product.
If I buy a BD, why can't I rip it onto a home server and stream it to every PC and TV in my OWN house, for example? I can do that with DVD.
If I buy a video game, why can't I install it on both of my PCs and my laptops so I can play it anywhere? Lots of DRM on software nowadays tries forcing you to only have one "activation" per household. Heck, even Windows does that.
There's plenty of other examples, but the bottom line is that the media companies are trying to force consumers to do what THEY want with the product, not what the consumer wants to do with it. That causes a lot of people to go out and aquire the cracked versions of the media - so that they can do whatever they want with it.
These corporations need to realize that the majority of people DO want to purchase it legally -- look at this article from early '08:
http://www.nytimes.com/2008/01/04/business/media/04music.html
This quote is quite telling: "The number of digital tracks sold, meanwhile, jumped 45 percent, to 844.2 million,"
Those 844.2 million legal downloads could easily have been downloaded for free -- but people chose to take the honest/legal road.
Ben @ Feb 28th 2009 9:14AM
Xyzzy,
It should be noted that there is no question that ripping a DVD and streaming around your house in the US is a violation of the DMCA.
This is most definitly why it is such a bad law, there is no fair use clause. In fact when people ask me why I liked Palin more than Joe "DMCA" Biden, I tell them because he's one of the main reasons you can't put a DVD on your iPod.
Ironically, downloading it off the internet is not.
My point is that if you could rent HDTV shows off iTunes or Windows Media Center for $1 and they expire in a week, there wouldn't be as much piracy. (assuming you could play them on any device you wanted)
Also, if Hollywood didn't have release windows, there'd be less piracy. The fact is I'm not ever going to go to the theater. When I was younger, I went every week. But with two kids, two jobs and taking classes online, I'm the type who puts movies in my Netflix queue before they are even released to the theater. It's obvious I'm not alone or Netflix wouldn't make the effort to let you add them so early.
Nate @ Feb 27th 2009 9:27PM
Hollywood doesn't understand a lot of things. I'm pretty sure piracy is the least of these.
minimalist @ Feb 27th 2009 11:18PM
I see no difference between music and films except for the frequency with which people consume them. Both are the fruits of artistic labor and stand on their own indeopendant of live shows.
And what if the recording is the art itself (Sergeant Pepper, XTC, Miles Davis's Bitches Brew etc)? Do those artists not deserve to get paid for their work simply because some punk ass kid with a broadband connection can steal and not get caught? Or is some glib armchair libertarian going to tell them "tough luck, find yourself a business model" as is so common in the tech blogosphere?
Really I hate DRM as much as the next guy but I find a lot of the people who bitch about it are just looking for a justification for stealing. And the more they can surround themselves with people who repeat the same talking points the more they feel they are in the right. The anti DRM echo chamber is loud and very seductive. But that still doesn't make stealing right.
99 cents a track is far from a high price for music and if you are really that cheap you can go to emusic where you can get it as low as 25 cents a track.
But what the experiments I mentioned have shown is that when you scrape away all the BS excuses and give people the opportunity to pay as little as a penny for an entire album of music with no DRM they will still just download it off of P2P sites without an ounce of remorse.
DRM does indeed suck for honest users and it needs to go away. But lets not conflate that fact with the cheap justifications given by all the people who will continue to steal digital content as long as they can get away with it.
kevon27 @ Feb 27th 2009 9:46PM
Stealing is wrong. I you don't like the restrictions just do without the product (music, tv shows, movies). There is no justification for stealing and people just need to grow up.
Hate DRM's on music - by CDs.
Can't record your favorite TV show with your cable card media center? - Rent the show from netflix or buy the DVD/Bluray.
Pusta @ Feb 27th 2009 10:06PM
It's not that cut and dry. Let's say I do buy the DVD/Blu-ray of my favorite TV Series/Movie/etc, and now I want to put that DVD on my iPod to watch on a plane. According to hollywood, I should buy a second copy of the film/series on iTunes just to transfer to a digital device, ripping the DVD as far as they are concerned is piracy, even if I paid for it. There is something wrong with that model. Why should they care HOW I consume their media as long as I pay to consume it and do not distribute to everyone and their mother.
Jyncus @ Feb 27th 2009 9:47PM
I think most would agree that piracy is wrong, from an ethical standpoint. As minimalist stated, if people can get digital content for free, they're going to. Period. As far as how much that negatively affects the artists (not the labels), is debateable.
The real issue, as Ben argues, is the restriction behind said content and the rate at which Hollywood embraces new technology. Over in Japan, they have an entire wireless network dedicated soley for viewing TV content on portable devices. -- Meanwhile here in the US, it's been like pulling teeth just to get the studios to allow "their" content to be viewed on portable devices.
Get with the program already, Hollywood!
kevon27 @ Feb 27th 2009 9:49PM
And why can't you go back and edit your comment in Engaget? Sometimes this site pisses me of. The restrictions are worse than DRM music.
kevon27 @ Feb 27th 2009 9:52PM
Americans need to start reading books again. Americans a getting dumber and dumber every second. All people do now is watch tv, listen to music and play video games. There is to much entertainment and people brains are getting like jello (hmm, hulu)..
Read a book, save a brain cell.
iamjoecollector @ Feb 27th 2009 10:26PM
You tool. Reading a book does not make you smarter. That is bad cliche used by snootie loosers that somehow think that books teach more than anything else. Is reading Pride and Prejudice better than watching the A&E miniseries. If so, why? That's what I thought. I don't read books, I watch more tv in a month than some people do all year and I do quite well. In fact, I have noticed that people that don't watch tv and read books all the time are often clueless.
IseWise @ Feb 28th 2009 1:56AM
National Geographic Channel, History Channel, Discovery Channel, TLC, The Science Channel, etc.
Yea TV is terrible, how could I possibly learn anything by watching these channels.
JM @ Feb 28th 2009 11:42AM
Wonder why I never hear about people pirating audio books or e-books.
The Kindle will make everyone think twice about paying $10 a book when they realize the amount of books on torrents.
I will say Audible has some benefits but plagued with some DRM
Jyncus @ Feb 27th 2009 9:57PM
Wow, thanks for the rant. Really.
I think I got my share of entertainment for the day by reading your comments. Does that count?
Memo @ Feb 27th 2009 10:15PM
It is pretty obvious that Hollywood doesn't get it. But it is pretty cut and dry. Drop the price and quit making things so expensive. I can buy a 100 blank DVD's for around 15 bucks. Hollywood can get it for less than that yet they still charge 20 bucks for ONE DVD! CD-Roms are a lot cheaper and yet a CD is 15 bucks! A full album is 10 bucks online with all of these restrictions and yet they expect people to buy the music.
So here is your solution, as long as these so called artists get to live in million dollar mansions in places like Beverly Hills and penhouses in New York, I think they are doing OK even with the piracy. When they start living in dumps and studio apartments, then they can start to complain!
Dbs143 @ Feb 27th 2009 11:24PM
you DO realize that the difference is normal DVDs actually have CONTENT on them, and aren't blank, right?
Darwin Smith @ Feb 27th 2009 11:54PM
They could make it alot easier by getting together and finding a really good non-physical media based distribution model. Like Netflix streaming, but for new movies too, not just old ones from a few years ago.
kevon27 @ Feb 27th 2009 11:17PM
Congrats iamjoecollector. I am surprised that will all of your TV watching you can still hold down that job a McDonalds. I guess being a deep fryer cleaner does not require reading.
iamjoecollector @ Feb 28th 2009 3:27PM
Kevon,
Typical. You sir have successfully used the Dick Cheney Defense. You cannot wiin of the facts, so you moved on to personal attacks. Fry cook at McDonald's is the best you can do? In reading all of your books, it appears that you have not read one on comebacks. The question becomes: Why would you say such a thing? You know nothing about me, and thus, the chances of you being correct is so small that it is more likely than not that you would be very wrong. Therefore, it makes it very easy for me to make you look foolish because of your absurd response.
In addition, why would you use fry cook as an insult. Many individuals that work at McDonald's work extremely hard. Insulting them makes you look like an elitist pig. I actually appreciate the work ethic of these individuals. What is better: A person who works really hard at a job like fry cook or one that is unemployed for months on end because they think they are too good or they are too lazy to take such a job.
Sorry my friend, you lose.
Evan @ Feb 27th 2009 11:27PM
Many Canadians pirate video because there is no legal download alternative that offers the shows we want to watch, when we want to watch them, with a reasonable picture quality.
The whole situation reminds me of the state of anime - anime is released on DVD in North America a couple years after it is released in Japan, if at all. Even fans who want to abide by the law are not willing to wait two years!
Hollywood has to realize that people will find a way to watch the content that they want to watch, when they want to watch it, and how they want to watch it! The only way they can compete with piracy is to improve their quality and flexibility of service.
Rivertrance @ Feb 27th 2009 11:32PM
There's really one solution to archiving Premium HDTV & HD Movies...and I highly recommend checking it out and passing the love ;)
"The Hauppauge HD PVR is the 'coolest product of the year' -quote from EndgagedHD,
While it's still available: http://www.hauppauge.com/site/products/data_hdpvr.html
The bets deal I could find is on Amazon...
Cheers and Enjoy ;) Rivertrance.
Travis @ Feb 28th 2009 12:16AM
I've never pirated/stole a Hollywood movie in my entire life, but sometimes i'm tempted. The price on Blu-Ray movies is robbery at retail. $34 for ONE movie? Are you kidding me? It amazes me that they can still get away with charging $20 for one DVD movie. I see movies from the 80s at local stores in Special Edition versions and they still want $25!
I had this addiction to buying Blu-Ray movies, but now i've stopped when I realized they were raping me on prices.
Some movies however are worth the extra prices. For example, Criterion Collection movies are usually worth it since it requires a lot of extra work for them to make and they are probably not going to sell well to begin with.
They want me to not pirate movies, but often they don't even keep movies I WANT to buy in print. I wanted to see the movie "Testament" but now it's only available on amazon marketplace for like $40+
$15 for a CD is fair to me, but no downloadable version should ever be more than $10.
JM @ Feb 28th 2009 11:48AM
Online dealers like Amazon and Deep Discount can save you quite a bit of money. I think I get an e-mail from Amazon almost 3 times a week announcing deals like save 46% or save 50% etc on BDs
Mr_Fizzlepop @ Feb 28th 2009 3:36PM
And honestly, Rentals?
I am a big movie fan and own a ton of movies, but I sure don't buy them all.
Buying a movie should be for those movies that you see yourself watching again and again, say at least once every few years for years to come.
Between renting movies, no matter how you are getting them, and buying the 10% or maybe less that you'll want to watch at least once a year, you are spending maybe 8 dollars a movie at most? And that's at the retail BD prices, without going to some xtra trouble to find deals or wait 6 months for the price to drop 30% or more.
Rent 9 at 4 dollars each, buy 1 at another 36 dollars, means you spend maybe 7 bucks for viewing 10 movies and having 1 of those to watch over and over forever, and being able to sell it later to get back some of that money if you want.
Hell that's cheaper than buying 10 new books, which I hear make your brain grow out your ears anyways.
Jonsson @ Feb 28th 2009 2:17AM
Most people steal because they can. When people have choice of stealing something and get away with it, the become simple thieves and...steal. It is as simple as that. Illegal downloaders and rippers are simple thieves, nothing else.
It is nothing strange in Hollywood wanting to protect their investments.
Xyzzy @ Feb 28th 2009 8:53AM
I posted this above, but will copy part of it here -- if your theory were true, why were over 844 MILLION tracks LEGALLY purchased in 2007?
http://www.nytimes.com/2008/01/04/business/media/04music.html
"The number of digital tracks sold, meanwhile, jumped 45 percent, to 844.2 million,"
Jyncus @ Feb 28th 2009 10:17AM
"Protecting their investments."
Is that industry-talk for "restricting how consumers use the media they purchase"?
Warner Bros. made over $315 million in profit for Dark Knight last summer. (source: http://www.the-numbers.com/movies/records/budgets.php)
Perhaps if they allowed their customers to do things such as ripping to home media servers, streaming throughout the house, portable devices, etc. people wouldn't despise the MPAA/RIAA/Industry so much. I think they can certainly afford it. :rollseyes:
Jeano @ Feb 28th 2009 1:42PM
Sorry, but MOST people don't steal.
Most people who steal, steal because they can - not because of lack of money.
RogueAgent @ Mar 1st 2009 3:47AM
@Jyncus,
So what this "source" is concluding is that if a movies production budget is subtracted from the revenue, you get the profit..?
How much do you figure was spent worldwide on marketing The Dark Knight..? I don't think 2-300 mill. USD is unrealistic, and very likely more - subtract that from the "profit" mentioned in your link, and TDK is pretty close to just break even.
Jim @ Feb 28th 2009 10:43AM
The problem is not that they don't understand piracy, but that the entire entertainment industry hasn't grasped the end of a business model based on selling the same consumer the same product again and again.
From LPs to 8-tracks to cassettes to CDs, the music industry has made a lot of money selling the exact same product to the same people over and over. Digital has destroyed that business model. Instead of adapting to the change, the entertainment industry as a whole is desperately trying to find a way to make people continue to buy multiple copies of the same exact product.
The film industry hasn't even caught up to that point yet because they are still dragging their feet in releasing BluRays to sell to people who have already bought theater tickets, video tapes, laser discs, and DVDs of the same product.
Consumers know that they shouldn't have to pay again to get something they have already bought, but the industry still thinks they can operate without reacting to the change in the consumer mindset about those multiple purchases. The entertainment industry needs to change into a high volume, low profit margin business even more than they already are.
Artists are also going to need to change. Digital distribution will do away with the need for content distributors (the buggy whip manufacturers of the entertainment induistry). Musicians and film-makers will eventually rewrite their contracts to allow for direct distribution of digital copies of their works and cut out the middleman businesses to help lower costs and make their art more affordable and widely available.
It's hard to be a dying business, and the industry is trying hard to find its own relevance.
kevon27 @ Feb 28th 2009 1:28PM
If artist go digital and cut out the middle man, who will pay for the fancy music video that help sell their albums?
John @ Feb 28th 2009 1:55PM
Some people argue "I deserve to watch this movie or hear this music and if it costs too much I will just pirate it" or people will say "Making a digital copy does not hurt anyone since it is not a physical product".
The problem with arguments like that is the company that produced that content loses out. If $40 is too much for a Blu-ray movie then do not buy the movie! If no one buys it they will have to lower the price. Entertainment is not a necessity for life like food and water. "I had to steal this movie or I would have died of boredom. Poor me I have to steal it". The company or artist that created the content needs to be compensated for their work. Sure, sure companies and musicians make millions of dollars, true, but still they should be compensated for that work. It is not like a company or musician can create their content for free. In the case of movie studios they invest hundreds of millions of dollars to produce a film or musicians who invest their time and talent into creating a song. After all if the company or artist did not create that content then you would not have been able to enjoy it.
Suing people is not the best way to solve this problem. I do not think it is a good idea to limit what people can do with the content they purchase either. The business model needs to be changed so that consumers can enjoy entertainment while the companies are compensated.
Pingles @ Feb 28th 2009 3:34PM
I bought a Blu-Ray drive for my PC and plopped a Blu-Ray movie in it to watch in a window.
But I couldn't watch it.
It turns out that my new 22" monitor was not HDCP-compliant.
So I can't watch my legitimately-bought Blu-Ray on my PC.
If I had pirated the movie I'd be watching it. But because I BOUGHT it I can't. Next time I want to watch a movie, guess what I'll be doing...
Fred @ Mar 1st 2009 1:28PM
There is so much more to this than you guys are saying.
First its because online versus personal is an issue. What that means is that stealing online though illegal, in your mind is not as bad as stealing a DVD from a shelf. You don’t see the policing, you don’t see the consequences, and though they do not like to admit it, its not really enforced by the FBI. So you don’t see the fines and the jail terms as you od other crimes.
2.Hollywood lost touch with its own pricing. 10 years ago you could go to blockbuster and rent a movie for 99 cents. Now its about 3.99 give or take on new release and other crap. Netflix cut the month price down to per movie on what the average person watches comes to about 3 to 4 dollars. Buy a DVD at 4 times the price and watch it 4 times the movie. Lets not even talk about how Hollywood has somehow trained the American people to buy movies left a right and they never even watch the movie or the extras they allegedly they bought it for.
3. Movie Theatre prices are now outrageous… and go up every year.
So now lets look at it… why rent something for 3 to 4 dollars when you can go online and watch it for free. Why spend 20 bucks for two people to watch a so so movie when you can rip it online, and then reaffirm that it was a so so movie and glad you did not waste 20 bucks for you and your woman to watch that movie. Its wrong, but its not that bad. Or that’s what you tell yourself.
Jordan @ Mar 1st 2009 5:26PM
I am Canadian, living in Canada. In Canada there are no digital media copyright laws. That said, content that was produced in America has Americain copyright laws applied to is. But like the featured article on Engadget HD said a couple of weeks ago there are VERY few legal options.
http://www.engadgethd.com/2009/02/25/ask-engadget-hd-any-streaming-options-for-canadians/
The VAST majority of TV downloading I do is for shows that either I missed on my PVR for whatever reason or, more commonly, it is shows that I can't get here. Shows on FX, on Showtime, on HBO. Things I just can not, in any way legal way, get in Canada. It's not even about convenience, it's about availability.
On that note, something that Hollywood seems to have turned their collective backs on is the power of the release date. If they want this "Blu Ray" thing to take off, use that power.
"From now on, all Blu Ray discs will be available for purchase a month before DVDs."
THAT will give you a spike in both player and content sales. Availability again, is the principal reason I download a lot of my movies. I just downloaded "Frost Nixon" a couple of weeks ago. Not because I didn't want to buy it, it was because I couldn't. I was on a 5 hour plane ride to San Diego and I wanted something to watch.
YepIsaidit @ Mar 1st 2009 6:06PM
People pirate simply because they want free content. simple as that. Why pay for something you can get for free. Also you can do with a DRM free download as you want such as putting it on portable devices, burn it to dvd, put it on a external hard drive and so forth. but yes prices of things is to much and paying $9 to go see a movie in theaters, rent it or buy a movie that you are not sure you will even like compared to seeing it for free and not losing anything is a big reason why people pirate.
YepIsaidit @ Mar 1st 2009 6:10PM
also those who claim pirating hurts the music and movie industry, are completely lying. Movie and box office sales have been breaking records for the past 9 years. During the whole pirating era. Because there is more ways to listen to your music, music downloads sales are skyrocketing.
15 of the top 20 biggest box office movie grosses are from movies released in the last 10 years.
DVD and blu-ray sales are even doing higher sales then VHS did.
If you go by these facts and more, you'd think Pirating was helping the them make money.
So them claiming it hurts them is a bold face fucking lie.
Fred @ Mar 2nd 2009 3:22PM
One problem with your claim... movies make more because tickets cost more.Also adjust for inflation. Tickets are more because Hollywood is losing more money and need to make it up.
Your house even foreclosing is worth more than it was ten years ago.
Their are actually less people going to movies as proven by ticket sales, not pricing. Also movies are in the red more the last 10 years then before.
Alex @ Mar 3rd 2009 2:03AM
Seven ways of stealing from budget
3. "Layer".
Nobody writes and talks about it, but such things happen. Some big state company ordered the equipment abroad. It was bought not at the manufacturer, but at a foreign firm that purchases the necessary equipment, and resells it gaining 10-20 %. But if you would call there you would hear Russian voice. And as the equipment - boring, costs over $1 billions you would tell, who the customer is. By the way, RosUkrEnergo is a kind of such pattern.
http://ua-ru-news.blogspot.com/2009/02/seven-legal-ways-of-stealing-from.html
Kelsey @ Apr 8th 2009 6:42PM
Did you hear about how Apple is raising the price of iTunes? And the music industry thinks they are going yo turn more of a profit?! HA, think again. I found a video talking about the increase in iTunes prices that takes many different opinions. Both national and international.
http://www.newsy.com/videos/itunes_changes_its_tone/