Studios hit as Oscar buzz fuels piracy

LOS ANGELES — After Oscar nominations were announced on Jan 15, worldwide downloads of pirated Academy Award-nominated films skyrocketed 385 per cent in the 30 days after, based on new data from Irdeto, a Netherlands firm that tracks digital piracy.

The spike led to nearly US$41 million (S$55.7 million) in lost revenue for motion picture companies, said Irdeto, which tracked downloads of films nominated for Best Picture, Best Director, Best Actress and Best Actor.

The solution to the piracy threat is far from settled. One option is for studios to release films online and in cinemas at the same time. People want films before they are traditionally made available for home viewing, said Mr Rory O’Connor, Irdeto’s expert on online piracy and countermeasures. He called for a “global release date that allows companies to maximise monetisation”.

However, Mr Jeff Gomez, chief executive of movie marketing consultant Starlight Runner Entertainment, said a simple dump across all distribution channels is not viable. “The studios don’t want to challenge the theatre chains at that level quite yet,” he said.

Professor Michael Smith, an information science and marketing professor at Carnegie Mellon University, said the goal of the movie industry “is to try to figure out a way to get the high-price consumers to pay a high price, while still selling to the low-price consumers at a low price”. This amounts to the current model — cinema releases for a high, one-time viewing price; DVD sales for multiple viewings; then HBO or a similar service for a subscription price to view movies relatively cheaply.

“The question is, could you come up with something else that would work? The answer is undoubtedly yes,” Prof Smith said. One option could be paying a pay-per-view premium online at the time of release. “The problem is that every time they’ve tried to do it, theatre owners go nuts and say, ‘Hey, if you’re going to do this, we’re not going to show it in theatres’,” he said.

“This is a classic problem,” Prof Smith said. “I’ve got this new market, but if I go after it, I’m going to lose a lot of money in the old market ... So when do you jump? It’s the companies with less to lose that are going after the new distribution channel.” BLOOMBERG