Washington, DC, May 24, 2005 --  

Even before the last of the record-setting sales had been made for the opening day of the sixth Star Wars film, bootleggers had copied the film and prepared it for sale to home viewers. The appearance of "Revenge of the Sith" video tapes and DVDs sold on the streets of New York, in Texas border cities, and throughout China¹ surprised no one, especially given the exact same thing happened after the release of the previous Star Wars film three years ago.

The events are so similar to what happened last time that today's news reports read like recycled newspapers from May of 2002.² Then, as now, a copy of the film quickly turned up on internet file sharing networks, providing a high-tech distribution channel to augment sales on the streets. Then, as now, the film industry cried bloody murder as their products were downloaded from the internet without authorization.

But for all the similarities to last time, there is one fundamental difference. In 2002, less than a 25 percent of all internet users in the United States had access to high-speed connections capable of downloading large video file.³ Back then, the country was stuck in a broadband rut, falling behind pioneer nations like South Korea. This slow adoption of broadband in America gave the film studios precious time to make changes to avoid the fate of the music industry, which saw its profits eroded by users freely swapping smaller music files over slower internet connections.

This window has now closed. About two months ago, according to Nielsen/Netratings statistics, the number of home broadband connections finally surpassed the number of dial-up connections⁴, giving millions of Americans the newfound ability to download full-length movies such as the bootleg Star Wars copy in wide circulation. Although film-swapping technologies have now reached the typical American household, the industry has failed to make reforms to mitigate its impact.

LucasFilm Ltd. refuses, for example, to sell copies of its latest Star Wars film to home viewers, choosing instead to perpetuate an archaic system intended to protect theater owners. By the time the company finally agrees to sell consumers the film on DVD and video cassette, millions of Americans will have already obtained it through unauthorized channels. During this time, the industry will point fingers and cry, "theft," a cry that rings hollow given that they provide consumers no legal alternative.

Like the music industry before them, the strategy of the entire film industry, including LucasFilm Ltd., appears to be to wish away the Internet, DVD burners and other communications technologies that enable alternate distribution channels. This stodgy attitude is shocking, given that LucasFilm Ltd. is hardly averse to technology. Aside from the presence of futuristic technologies in its films, the company has been a pioneer in the move to digital distribution and projection of its movies.⁵

The reality of the problem is less about industry appreciation of technology, and more about its desire to maintain control above all else. The film industry refuses to give up the tiniest amount of control over the distribution its films, even when it means bigger profits. Hollywood studios, for example, have expressed outrage over a handful of companies selling censored copies of films to make them more family-friendly. Rather than seeking profits by marketing its own edited versions, the industry response has been to file lawsuits to squash consumers' ability to openly buy independently-edited versions.⁶

Similarly, industry lawsuits succeeded in bankrupting the inventor of an Internet-enabled video recorder called Replay TV, which would have enabled groups of viewers to share recorded copies of movies and television shows.⁷ In the two years since then, studios have failed to provide consumers any similar alternative, despite opportunities to increase the industry's bottom line. As a result, enthusiasts have resorted to distributing do-it-yourself blueprints for the underground systems called Myth TV and Freevo.

The film industry's consistent anti-innovation, anti-consumer approach has forced viewers to engage in the same underground behaviors that have impaired the music industry. Consumers who wish to get around the studios' obnoxious whims have little choice but to take this path. Fortunately for consumers, advancing technology is making doing so easier than ever before.

Related Web Column:

Just Around the Corner
The Belated Arrival of Video-on-Demand, June 25, 2002

Notes:

1. Bronsville Herald, Illegal ?Star Wars' DVDs are Hot Items in Border Markets, may 22, 2005

2. San Francisco Chronicle, Attack of the Movie Clones, May 16, 2002

3. Web Site Optimization, Broadband Report, May 2005.

4. Ibid.

5. USA Today, Digital Film Revolution Poised to Start Rolling, May 17, 2005

6. Washington Post, Filmmakers Aghast at 'Scrubbed' Feature Films, April 27, 2005

7. Wired.com, Bankruptcy Blues for PVR Maker, March 24, 2003