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How the iPod changed everything Add to ...

“That same attitude and belief should be with the music companies and the movie companies. Downloading is there, but the question isn't how do I stop it, the question is, how do I bring those people into those industry, working to make the product better so we can all benefit.”


But the music industry was just the beginning.

Since the creation of Napster, the movie and television industries as well as video game producers, book publishers and newspapers have all struggled to come to grips with the new reality and develop business models that work in the online world.

On March 31 this year, the executives at 20th Century Fox woke up to a development that they hoped was an early April Fool's Day joke. A copy of the unfinished and unreleased film X-Men Origins: Wolverine leaked onto the Internet and was spreading like a virus around the world.

It wasn't a joke. It was a nightmare. A recurring one.

Wolverine's (Hugh Jackman) berserker rage unleashes his adamantium claws in X-Men Origins: Wolverine. Twentieth Century Fox went berserk when the movie leaked online a month before its release date.

A copy of The Dark Knight was available online less than 24 hours after its U.S. theatrical premiere last July. Iron Man , starring Robert Downey Jr. was available the day before its release in May.

It's a scene that has played out all too often for the movie industry. Advances in data transfer technology, computer storage and Internet speeds have allowed movies and television programs to be copied, uploaded to the Web and sent around the world as easily as music files were in the days of Napster.

Sometimes, as was the case with The Dark Knight , the version of the film that ends up online is a video recording made by someone in a theatre with a clandestine camera. During Oscar season, copies of films such as Slumdog Millionaire , Frost/Nixon and Milk are ripped from the DVD screeners that are sent out to voting members of the academy. In many instances, it is not uncommon for downloaded copies to have a screen stamp saying which studio the film belongs to, and that piracy is illegal.

It's not just movies. Within hours of airing, television episodes are ripped from PCs and personal video recorders and posted online. An HD copy of a new episode of The Simpsons , House or How I Met Your Mother can be online in less than an hour after airing. In fact, television shows are the most downloaded files from The Pirate Bay, the world's largest destination file sharing search engine.

The Motion Picture Association of America estimates the film and television industries lost as much as $18.2-billion (U.S.) in revenue from piracy in 2005.

In Canada, the film and television industries account for as much as $5.2-billion (Canadian) in production volume annually, provide jobs to 130,000 Canadians in the industry and support countless more in movie theatres, catering companies and other services around the industry, said Wendy Noss, executive director of the Canadian Motion Picture Distributors Association, the Canadian wing of the MPAA.

“It's common sense,” Ms. Noss said in an interview. “All of the things we're learning over the last 6 months about market failures in other areas, where things defied common sense, things that defied logic, that were too good to be true. It just defies common sense that somebody can take something, make money selling it and that the legitimate market can continue to survive.”

Every time a copy of the latest episode of Lost is downloaded from the Internet or someone purchases a bootlegged DVD copy of Beverly Hills Chihuahua , the industry counts it as a lost sale.

However, some experts believe that file sharing can lead to sales. A recent study from the BI Norwegian School of Management in Norway found that those who download music illegally are 10 times more likely to pay for songs than people who don't.

Perhaps taking a cue from the destruction of the music industry, the movie and television industries have taken the initiative to get their content online. With demand for online video growing, television studios have worked with broadcasters to make more programs available online through network sites, partnership sites such as Hulu.com and now YouTube.

“There are more than 275 legal websites around the world that provide high-quality digital content online, and that ranges from ad-supported viewing, rental viewing, permanent downloads, subscription downloads, all of those huge arrays of consumer choice where consumers can get access to filmed entertainment the way they want it, on the device they want it, at the time they want it and at a variety of price points,” Ms. Noss said.

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