PIRACY IN THE FILM INDUSTRY

'Critically discuss what you consider to be THE most significant challenge of

managing art in an increasingly global context, and what this means in practice for

those involved (e.g. arts managers, policy makers, artists etc). Focus on an art form

of your choice and draw on real life examples to support your case.'

PIRACY IN THE FILM INDUSTRY

Film occupies a unique place in the world of the arts. Invented in the late nineteenth century, it has position itself decades after decade as a major popular art.

Today, we are entering a digital era, which implies that the cinema industry has been facing major disruptive changes caused by digital developments. One of them is piracy, considered as one of the main challenges of the film industry.

Piracy, no doubt, has had an effect on the film industry, the most obvious being its negative implications especially profit losses on movies.

The digital improvements in the film industry have permitted the customers to watch movies on the Internet very easily and for free or at a low-cost. Unfortunately, many viewers are breaking the law and are watching movies that are pirated, violating copyright and intellectual property laws.

Indeed, piracy augmented with the creation of new digital spaces as it allowed people to create ‘sharing networks’ on which they exchange media contents, but it has since evolved to the point where files are publicly distributed so that it is effortlessly accessible to every Internet users (Regnier, 2006).

There are two main types of piracy. Firstly, when a movie has been made available through legal distribution channels and has been hacked accordingly. Secondly, when a movie is released online before being legally distributed to the public, after being hacked and released online by someone from inside a production team (Crisp, V. 2017, pp. 56-76).

In all cases, it is harmful for the creators and artists, distributors, employers of the industry but also the states as it impede them from receiving their full earnings from a movie.

From the point of view of the producer and the distributor, piracy has a considerable negative damage and should be ended because a significant number of companies, administrations and persons working in the industry lose money due to piracy every year. To support this statement, it is interesting to analyse the

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numbers given by the MPAA1 as it reported a worldwide loss for the film industry of $18.2 billion in 2017 because of piracy. Moreover, the US has lost the most due to online piracy with $8.9 billion in losses in 2016 and this amount should continue to increase by 2022 with a projected loss of $11.6 billion (Digital TV Europe Reporter, 2017). Besides, this problem doesn’t only affect the American cinema, but also other major filmmaking countries, such as the Chinese or the Indian film market with growing number of film being pirated every year, and other smaller cinematography countries. We can state the example of France, where piracy was the cause of a loss of 1.4 billion euros in 2017 for the state’s film industry (EY, 2017). Plus, if piracy continues, it is likely that the production of movies will decrease and will have a harmful impact on the economies of all film-producing nations. Indeed, by impeding the people behind the production of a movie of their projected and legitimate profits, pirates dissuade filmmakers to create new contents because they would apprehend to not get fairly compensated for their work. Therefore, this can obstruct the industry and its consumers of getting new creative projects.

Also, I believe piracy have a direct impact on the attendance of viewers in the cinema. If we admit that a consumer who downloads movies illegally will not go watch them in the cinema, it is the exploitation and distribution parts of the film that will be affected, as they will not receive the remuneration hoped for. Approximately 1.3 billion movie tickets were sold in the United States in 2016 against 1.6 billion in 2002. Indeed, these numbers keep decreasing year by year as piracy is developing and prospering (Statista, 2018). Plus, mostly films from big production studios works well on the box office, which is about 5-10% of the movies released at the cinema annually (Statista, 2018). These few films make enough money for the studios to subsidize other films and especially independent movies. However, these blockbusters are the ones that are the most pirated and their hackers penalizes in priority independent films by directly attacking their source of funding (Elberse, A., 2015, pp. 150-187). Thus, if consumers keep frequenting the cinemas less because of piracy, there would not be enough money to finance all projected works

Concerning the performance of movies in the box office, an example of a movie that was hacked before it was released in theatres is Ang Lee's "Hulk" (2003).

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