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Movie Piracy: Ethical Crisis and Economic Impact

Though movie piracy may seem an ordinary part of the modern reality that the counter-piracy advocates need to put up with, the act of stealing someone’s artwork is still illegal, unethical and economically detrimental. The pro-piracy fighters argue that the increasing access to Internet naturally nurtures the open access to all its content, including the one that is protected by numerous intellectual property laws. Thus, it would be logical to lift the ban on the piracy, which is supposedly helping the movie industry live and prosper, while helping the artists promote themselves within the growing audience. The piracy advocates argue that this helpful phenomenon cannot be deemed theft, as, first of all, there is not object to be stolen, and, secondly, the copyright is still present on the pirated movies, thus, the artists and movie makers achieve their objectives of creating a new and publicly recognized piece of art. However, most of the pro-piracy activists do not take into account the unethical side and economically degrading consequences that the piracy brings to the artists, studios and the society, whose standpoint is that the law-enforcement should be based on respect to one’s intellectual property rights, equality and justice.
The movie piracy industry is often a part of other activities of the organized criminal groups. Downloading or buying the pirated movies supports the existence of these organizations. In his testimony before the U. S. House of Representatives John Malcolm, the Senior V. P. and Director of Worldwide Anti-Piracy Operations for the MPA and MPAA said: “ It is being done by business-minded thugs who fund this activity through money raised from other illicit activity such as drug dealing, gun running, and human trafficking (utilizing the same distribution networks), and who, in turn, fund these other activities through the money they raise through piracy” (qtd. in Albanese 18). While separate stand-alone users of the illegal film copies are engaged in unethical actions of economical facilitation of the organized crime, they do not constitute the target group for the piracy fighters. Downloading or buying pirated movie for personal use without the intention to earn money on the distribution of the film copy is illegal, but not economically detrimental. The real hazard comes from the initial thieves, who steal and replicate or share the movies with the big audience, and these thieves should be one of the main targets for the fighters against the crime. Now, many piracy advocates state that the replication and file-sharing exist for several reasons, among which are the high prices for the product, the already high revenues of the film studios and the necessity for the audience to familiarize itself with the product before actually proceeding with the purchase of the legal copy. The invalidity of the argument is based on the fact that while many people cannot afford to pay the price for the movie, most of the audience, who prefers illegal usage, has the opportunity to spend money on the legal copy of the movie, and while many infringers can justify their actions by either the high prices, or the necessity to know the product before buying it, they are actually taking a fully-responsible and conscious decision to use cheaper or free option, thus, financing the numerous illegal international criminal groups, who will only keep on reacting on the economic demand for more products. According to Keintz although in the United States the piracy exists mainly in the form of illegal file sharing, in the countries like Spain the piracy is presented in the form of the replicated physical copies of the pirated content and managed by organized crime networks (Keintz 2005). The encouragement of piracy leads to more money going to the organizations that operate not only in the sphere of intellectual property, but are also engaged into more serious crimes.
The second unethical and economically detrimental side of the movie piracy is that it deprives the artists and simple studio workers of their potential income. The supporters of free access to the pirated content argue that the movie makers gain increasingly huge profits every year and the industry’s current prosperity is undeniable. According to the pro-piracy activists, the mass downloading of the films actually makes a favor to the film studios and artists by promoting their artworks. One of the grounds of this argument is that only that content, which is interesting and valuable to the public, will get any significant profit from the sales, but then such famous movies gross a big amount of money regardless of the piracy rate. That is indeed proven by the practice: we can see many Hollywood films that have broken records in their grosses. Unfortunately, this argument is not valid, as while the piracy does not lead to the bankruptcy of the industry moguls, it still have an adverse impact on it’s legal earnings. According to the Wall Street Journal’s Sarah McBride and Geoffrey A. Fowler: “ Last year [in 2005], according to a person familiar with the matter, copies of movies downloaded or received from people who had downloaded them cost the studios $447 million in the U. S., whereas copies stemming from professional bootleggers cost the studios $335 million. An additional $529 million in losses came from consumers making copies of legitimate films they bought on DVD or VHS” (The Wall Street Journal 2006). But most importantly movie piracy does have a drastic impact on the financial future of the young, unknown, and independent artists, who either do not strive for getting huge deals, or have not been able to step up to such opportunities yet. The substantial impact of piracy only on big Hollywood studios is a common fallacy, while in reality people share and download all kinds of movies, including the films created by independent studios in the genres that are not extremely popular. Their creators have the same bills to pay, as the Hollywood billionaires, with the exception that the former may not have enough earnings due to low legal sales caused by the movie piracy. Moreover, an extremely big part of the visible income from the movie goes to various distributors and intermediate participants of the whole process of the movie making and distribution. And while big studios do not feel a necessity to cut down the costs, production and labor force, the smaller ones may need to downsize the personnel.
Movie piracy should be legally treated as a theft and attended with the same seriousness as the theft of the physical objects. The pro-piracy argument establishes the position that the digital content cannot be deemed an object of thievery, as it cannot be physically counted and, thus, the losses from its theft cannot be accurately estimated. Although it is truly hard to understand how much money a movie would have made if not for the piracy, however, even the lowest expectations of the potential sales are usually naming a considerable amount of money, which should not be taken away from its rightful owners illegally. The Federal Investigation Bureau supports this idea by criminalizing the movie piracy as a part of the intellectual property theft: “ But it’s not about picking a pocket or holding up a bank. It’s robbing people of their ideas, inventions, and creative expressions—what’s called intellectual property—everything from trade secrets and proprietary products and parts to movies and music and software” (The Federal Investigation Bureau, 2010). Most artists cannot work for free only for their possible glory, because they are the same workers as those, who steal the products of their labor. The very nature of their product suggests the necessity for it to be installed in some sort of physical container, either a CD or a computer file, and buying an illegal copy or downloading the file constitutes a theft of a physical object that contains the protected intellectual property of an artist. Although the lost sales of such objects cannot be estimated correctly, each such stolen object is a part of the possible sales and every person buying or downloading the movie is aware that other people are likely to take the same illegal actions and affect the profit of the movie makers by substantially reducing it.
All in all, the unethical side of the movie piracy and its negative economic effects lead to the necessity of improving the existing laws and regulations on this matter. The failure to produce a single working document and the opposition of the technology companies and Internet users has led to the cancellation of several legal initiatives, including the Stop Online Piracy Act. These events mean that there is a lot to be negotiated between the representatives of all parties: the movie studios, the technology moguls, the government and the Internet users. With Internet popularity growing each year and more content being uploaded daily, the current and suggested regulations seem outdated, thus, while the new round table for the future negotiations is yet to be set up, all the interested parties need to take their respective reasonable actions to prevent current increase in the film theft, especially concentrating on the illegal online sharing.

Works Cited

Albanese, Jay S.. Combating piracy: intellectual property theft and fraud. New Brunswick, N. J.: Transaction Publishers, 2007. Print.
” Intellectual Property Theft.” FBI. FBI, 16 Apr. 2010. Web. 14 Dec. 2013. .
Keintz , Brett . ” The Recording Industry’s Digital Dilemma: Challenges and Opportunities in High Piracy Markets.” Review of Economic Research on Copyright Issues 2. 2 (2005): 83-94. Print.
McBride, Sarah, and Geoffrey A. Fowler. ” Studios See Big Rise In Estimates of Losses To Movie Piracy.” The Wall Street Journal. The Wall Street Journal, 3 May 2006. Web. 14 Dec. 2013. .