On March 7th, the 16th annual Osgoode Entertainment & Sports Law Association Conference brought together students and professionals to explore emerging issues in entertainment and sports law.
Susan Abramovitch (of Gowling Lafleur Henderson LLP) moderated the final panel of the day entitled “Piracy & Digital Distribution”, in which panelists Kevin Fisher (of Basman Smith LLP), Steve Teixeira (of Universal Music Canada Inc.), and Osgoode Hall Adjunct Professor Sundeep Chauhan (of the Motion Picture Association – Canada) spoke about how piracy has affected their respective industries of sports, music, and film.
Kevin Fisher discussed the unique aspects of piracy in live broadcast sporting events. Since the value in a sporting event exists in the broadcast, the piracy in this industry includes satellite signal theft, grey market and free-to-air systems, and event channel streaming online. Individuals can legally purchase a broadcast, set up an event stream on a user generated site, and broadcast the stream to the world. This has also led to a new sub-industry of directory sites that guide users to the pirated streams.
Steve Teixeira began his discussion by asking whether anyone in the room has ever pirated music, and most of those present raised their hands. However, when he asked how many people had stolen a physical CD, only one hand remained raised. Teixeira posited that this disconnect was the result of how the public values (or perhaps, devalues) the more abstract concept of digital music products as compared to physical products. He suggested that this social acceptance of piracy has serious implications for the industry and provided some insight on how the industry will move forward to work towards recapturing paying consumers.
Sundeep Chauhan discussed the increasing trend of dressing up pirated DVDs to look like legitimate products and selling them at a slightly lower price point, and the resultant displacement of the legitimate physical product market. He also discussed the impact piracy has had on the film ecosystem. Money taken out of the industry due to piracy has disrupted the ability of film makers to reinvest in the film industry. The trickle down effect of piracy has also resulted in job losses both within the industry and for those with jobs related to film production (such as makeup artists, chauffers, general contractors, etc.).
All three panelists agreed that litigation against end user consumers is not the goal of rights holders. After initial attempts to enforce rights against individuals by the music industry resulted in a public relations backlash, content owners realized that it does not make sense to alienate their consumers. It stands to reason that aggressively pursuing consumers and then turning around and asking them to purchase your content was not a viable strategy. Now, the goal is to pursue those who make content available and make profits through subscription fees and advertising revenue. These sites, referred to as “wealth destroyers” (Pirate Bay was an oft-mentioned example), drew criticism as they capitalize on the investments of others while drawing away the profits to be gained from those ventures.
The panelists highlighted education as an important resource to combat piracy. Erasing the grey area and shaping cultural values about online theft through education will be a valuable tool for content owners moving forward. Intermediary companies will also require this education. These companies pay for advertising space or are involved with the authorization of purchases on sites hosting pirated content. The damage done by “wealth destroyers” can be reduced, and hopefully eliminated, if companies are made aware of the consequences of their participation in piracy.
Although industries affected by piracy were initially resistant to new business models made possible by technological advances, entertainment industries are increasingly embracing emerging business models. The goal of these companies is not to resist innovation, but to ensure that the technology developers and entertainment industries collaborate to improve their products and services. For example, the key to the future use of technological protection measures (TPMs) is to reduce the restrictions placed on users while maximizing protection against would-be pirates. In the past, implementing TPMs often meant that individuals could not use their legally purchased content in legally protected ways such as format shifting. Now, TPMs facilitate new business models like iTunes, allowing rights holders to protect content and feel secure about releasing it online while providing their product to the consumer. For example, providing a time-limited movie rental at a lower price in addition to a purchase option. The use of these services allow further opportunities to meet the needs of different consumers by allowing for such things as differentiated pricing options.
It is clear that the entertainment industries are working to embrace technological changes and the new methods in which they can provide content. Teixeira noted that as time goes on, music streaming may become the way of the future. Whether it is through subscription or advertising models, the hope is to eventually increase revenue streams as these services build up a consumer base. Fisher suggested that with the right technology, live sport streaming can cut out the pirates as well as divert more revenue away from the middle men and directly back to content creators. Chauhan indicated that filmmakers want their content on as many platforms as possible and to work with consumers to provide options catered to their needs, making it just as easy to access legal content as it is to find pirated content. Perhaps embracing the very technology that initially allowed bootlegging to run rampant will end up saving these industries from piracy.
Allison McLean is an IPilogue Editor and a JD Candidate at Osgoode Hall Law School.