Illegal Movie Downloads Are Growing, Hollywood SaysIllegal Movie Downloads Are Growing, Hollywood Says

Despite the movie industry's efforts to nip online piracy in the bud, the Motion Picture Association of America says its worst fears are coming true. People are illegally downloading more movies, and as a result they're paying to view movies less frequently, according to a study conducted by the MPAA and online research firm OTX.

The study, released Thursday, indicates that nearly a quarter of Internet users have downloaded unlicensed copies of films, and that half of those did so for the first time within the past year. It also found that more than one-fourth of downloaders are buying fewer films on DVD and videotape, and 17% say they're attending fewer theater screenings.

Not everyone is convinced of the veracity of the findings. Jim Burger, an attorney with the Washington, D.C., law firm Dow Lohnes & Albertson, says the study lacks any empirical evidence. Burger has been representing tech vendors in their negotiations with Hollywood over how copy-protection technology should be deployed and who should pay for it.

"It is impossible to tell with any clarity that this is a valid study," says Burger. "It's interesting, but as far as I can tell, it may be picked out of the sky." He says the MPAA is essentially making a connection between users saying they're downloading more films and the fact that Hollywood saw a 3% drop in box office sales in 2003, when the two things may be unrelated.

Burger says the study's findings could very well serve a political purpose as Congress considers the Inducing Infringement of Copyright Act of 2004, which would hold technology companies liable for enabling copyright infringements whether or not there is intent to do so. For the past few years, the Hollywood studios have pressured the makers of electronic equipment and digital media software into building copy-control technology into their products, but the technology vendors--among them Apple, Hitachi, Intel, Microsoft, and Sony--have insisted that doing so will cause them financial hardship, prevent consumers from exercising their right to fair use, and could ultimately hurt sales.

Already, many equipment makers have been manufacturing devices that comply with the Federal Communications Commission's so-called "broadcast flag" rule that takes effect in July 2005, requiring that TiVo-style personal video recorders and digital televisions include technology that would prevent redistribution of content over the Internet.

In the meantime, the MPAA has taken a multifaceted approach in attempting to nab movie pirates. It's been conducting raids of Asian shops where pirated DVDs are produced; it's joined with the FBI and other entertainment industry groups in planning a warning seal on future products; it's been lobbying Congress to strengthen laws to prevent copying and sharing of movies; it's started running in-theater advertisements warning of the penalties for piracy; and, most recently, it's offered a $500 reward to theater employees who assist in busting pirates using video cameras to record first-run screenings, a move that last week resulted in the arrest of a pirate spotted by a projectionist using night-vision goggles.

But the MPAA study indicates the all-out assault on digital bootlegging may not be having the kind of impact Hollywood was hoping for. Nearly three-fourths (72%) of those surveyed said they don't see anything wrong with downloading films after their release to DVD and video, and 17% of those who haven't downloaded any films say they're likely to give it a try in the next year.

The findings were culled from surveys of more than 3,600 Internet users in Australia, France, Germany, Italy, Korea, Japan, the United Kingdom, and the United States.