Hollywood hates pirates, but can it use them?

news analysis Attorney Nancy Prager sees only thievery in file sharing. Don't even try to suggest anything otherwise to her.

Director Michael Moore's Sicko is coming off a glittering debut weekend at the box office. This despite the documentary's availability on the Web for the past two weeks--distributed widely over the Internet by file sharers who violate copyright law. Prager, a Washington, D.C.-based copyright attorney, was asked whether those who downloaded the movie could have helped ticket sales by spurring word-of-mouth sales.

"No, no, no, no," Prager seethed. "This is depressing. We're not seeing a rise in the peer-to-peer influence market. Anything positive they may bring is instantly canceled. These guys aren't just spreading their opinions. They're spreading the actual movies."

Ever since Sicko first appeared on the Web, CNET News.com has tracked the film's presence online and asked whether file sharing depresses ticket sales. Some in the file-sharing community hold that pirates often stir interest on the Web that migrates to the physical world in the form of ticket sales. The response from Hollywood studios is largely: we don't need thieves to help us market our films.

"File sharing has been going on for years now and yet the movie industry continues to see record profits and revenues. Clearly file sharing is not killing the movie industry, far from it."
--Fred von Lohmann
attorney, Electronic Frontier Foundation

Online piracy is apparently becoming a priority to Hollywood, as the transferring of large digital files becomes less time-consuming and the quality of viewing improves. Already, billions of dollars are lost to illegal file sharing every year and the losses are certain to grow, according to the top U.S. movie studios.

So what can be learned from the Sicko controversy?

It is believed that tens of thousands of copies of Moore's documentary about the health care industry were downloaded without authorization during the past two weeks. The movie has also gone up on YouTube and Google Video, and was viewed by thousands before being removed. As the movie played on theater screens across the country this weekend, the film returned to Google Video and was watched more than 2,000 times.

Nonetheless, the movie opened in 441 theaters on Friday and earned an estimated $4.5 million for the weekend. That was good for ninth place at the box office. Pixar's Ratatouille was No. 1 with an estimated $47.2 million haul.

What is encouraging for Sicko's producers, the Weinstein Co., is that while the movie opened on relatively few screens, it averaged $10,204 per theater, according to a story in The Hollywood Reporter. The industry publication reported that only one other movie this weekend topped Sicko's per-theater average: Ratatouille, with $11,987.

If Moore's film has been harmed by file sharing, the damage is hard to find.

"File sharing has been going on for years now and yet the movie industry continues to see record profits and revenues," said Fred von Lohmann, an attorney with the Electronic Frontier Foundation, an advocacy group for Internet users. "Clearly file sharing is not killing the movie industry, far from it."

File-sharing buzz or buzz kill
After a slump in 2005, Hollywood saw revenue grow 11 percent to $25.8 billion last year, according to the Motion Picture Association of America, the trade group that represents the top movie studios.

Could file sharing have played any kind of role in the growth?

File sharers often argue that they are among the first to tell friends about a good movie. They say that this stimulates interest in people who don't share files. On the surface at least, this is the kind of buzz building that movie marketers are trying to ignite.

In a May 2005 report on movie marketing by The London School of Economics and Political Science, researcher David Lane found that the secret to stimulating ticket sales "is less about the film itself than about the success of pre-publicity and word-of-mouth recommendations."

Lane found that marketing techniques had changed in Hollywood in the past two decades and that what mattered most was "to get people talking about the film, creating prerelease interest and then to sell tickets--fast."

When Moore's documentary surfaced on the Web, it generated a host of news stories that served as free advertising. But there's no way to determine how many people learned about the movie from someone who downloaded a pirated copy.

What doesn't help support the premise that file sharing helped give Sicko a shot in the arm was that the movie drew mostly older audiences, according to published reports. Most file sharers are thought to be of college age.

"A Michael Moore film is going to be in the headlines no matter what it's about," said Gary Stein, an executive at Ammo Marketing, an advertising firm. "The news hounds were ready for a Sicko story and this one happened to be among the first to come out...You have to remember these aren't people that wake up in the morning and say to themselves, 'How am I going to get people to see this movie.' They get off on watching a movie for free."

And any measure of the effects that piracy has on a film must look at an entire theatrical run, said Prager, who represents independent music labels and has also negotiated movie deals. She points out that the financial performance of a documentary like Sicko may be particularly vulnerable to Internet piracy.

"This is not a big special-effects action movie that depends on the big screen," Prager said. "This is a film that people may be satisfied watching on their computers. That could really hurt the movie's sales."

In the end, nobody really knows what effects copyright infringement has on a movie's earning potential, said Jonathan Zittrain, professor of Internet Governance and Regulation at Oxford University. Zittrain does, however, see one benefit from the controversy.

"The real benefit of this kind of leakage," Zittrain said, "is that it pressures Hollywood to think outside of the box instead of hoping the Internet will just go away."

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Add a Comment (Log in or register) 38 comments (Page 1 of 2)
Umm...not really
by menty666 July 3, 2007 5:55 AM PDT
I don't know, maybe it'll hold true for other movies this summer like the new Harry Potter film and the Simpsons movie but frankly I wouldn't have paid the 10.00 to see Sicko in the theater anyway. There's a perverse accident like curiosity in seeing it, but that's just as easily satiated through my Netflix account in a month or two. Either way they wouldn't have gotten a whole lot from me.
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Isn't it funny
by skeptik July 3, 2007 5:57 AM PDT
While the industry is quick to banter about definitive statistics about how badly they are hurt by piracy, when it comes to measuring the benefits the response is: "Nobody really knows and it can't be measured".

A bit of a double standard, no?
Reply to this comment
It's greed that drives them..
by tektaktyks July 3, 2007 5:59 AM PDT
...they simply don't make enough millions.They made 4.5 million and they were hoping for...??? I wonder how many of those "Pirates" would actually go to the movies to see those films ...what about liars who tell you in the trailer that the movie is the :"number one,best picture/film of the year etc..."and u go and pay $12 and u want your money back after 20 minutes... Its nothing else but pure scam,a cheat a L I E,but nobody will pay u back...and most movies are pure poo and people who have access to many movies and watch them are more picky.So,i don't think "pirates" can help them by word of mouth unless they start making better movies.I think it could be killing ticket sales in cases of bad movies=most movies coming out.What about prices of dvd's? Selling them for $20 when it costs cents to make...They should think about something like iTunes for movies,$99 cents for viewing in high quality or something like that and focus on sales of HD/BR dvd's.There are things like Netflix,blockbuster and others,where u pay very little or there is your local Public Library where u get your movies on dvd for F R E E ! Tell Hollywood to stop cheating poor,simple out of their money,by promising them good entertainment.They are nothing else but thieves,cheaters and liars.
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Moore Tactic?
by georgiarat July 3, 2007 6:27 AM PDT
Having watched Michael Moore operate I would not be
surprised if he had the movie "leaked" just as those in
government "leak" stories for headlines. He drums up publicity
and does not have to pay for it.

The only "Sicko" in this movie are Moore and the idiots stupid
enough to pay the money to go see it. The undereducated too
dumb to understand his propaganda and the overeducated
without the common sense to know better.
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Yes they can totally use them
by Thomas_74 July 3, 2007 8:48 AM PDT
Check out the Scope platform by divinity Metrics, they sample multiple platforms to provide metrics and analytics for any digital campaign.. you can check them out at http://divinityMetrics.com .
Also see a post for Sicko done some days back:

http://www.divinitymetrics.com/blog/?p=24

Cheers..

Thomas.
Reply to this comment
Definition of Waste as it relates to this report
by BloggerRadio July 3, 2007 8:58 AM PDT
Bus load of attorneys goes off the road and over a cliff ... with one empty seat.
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Not impressed with Mr. Moore
by Dr_Zinj July 3, 2007 9:44 AM PDT
First of all, inspite of all the hyperbole and Mr Moore's docudrama, the healthcare 'system' in the United States isn't broken. It works, and in most cases, works well at delivering the care needed in a fast and efficient manner.

The trade offs for universal care is vastly increased taxation, long waiting lines for absolutely necessary care, and fewer options to who, where, and what kind of care you get. Certainly people in Sweden, the UK, and Canada all agree that people in the U.S. can get needed care far faster than they can in their countries. Funny, how nobody holds up the massively disparate mortality rates for people waiting for care and procedures in those countries compared to the U.S.

Mr. Moore is really good at putting on a show tarring and feathering the objects of his ire. But as far as workable solutions to problems, he's a pathetic loser.
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Unclear writing
by Nchantim July 3, 2007 10:39 AM PDT
The paragraph "Already, billions of dollars are lost to illegal file sharing every year and the losses are certain to grow, according to the top U.S. movie studios." makes it hard to distinguish if the writer is telling us that the studios claim billions of dollars in losses, or whether they just claim losses will grow, and that the "billions of dollars in losses" is a fact (which it isn't)
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We need us a good revolt.
by ethana2 July 3, 2007 11:16 AM PDT
If we had an iTunes equivalent for creative commons and public domain content, we wouldn't need these idiots any more than I, as a Linux user, directly need Adobe or Microsoft. Do you see me pirating software? It's not worth my time, as I think commercial stuff is crap anyway.

So lets do what we did with code, with music, and movies, and books. I'm contacting the participatory culture foundation now.
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Heart of the issue
by perfectblue97 July 3, 2007 11:19 AM PDT
What the industry doesn't seem to accept is that the heart of the issue is not that people are stealing their content and must be stopped but rather that people no longer feel valued by the industry or see value in the industry's products.

Movies and music are too generic and too manufactured, they are designed to make the most possible money by attracting the widest possible audience (for example, the big studios are making fewer R rated, and more PG-13, horror movies) and consumers feel cheated by these expensive shallow and samey productions so they have no qualms about ripping them off.
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