Valenti Warns Congress: Internet Piracy Threatens Film Industry and HDTV Content

MPAA’s Valenti Warns The Dangers Of Internet Piracy Before Congressional Subcommittee

On the first anniversary of the enactment of the Digital Millennium Copyright Act (DMCA), Jack Valenti, President and Chief Executive Officer of the Motion Picture Association of America (MPAA), warned about the dangers of Internet piracy that threatens to devastate the future of American movies, the nation's most prized trade asset. "While the Internet has great potential, it can also cause enormous losses and damage to consumers and to intellectual property industries," said Valenti. Testifying before the House Subcommittee on Telecommunications, Trade and Consumer Protection of the Commerce Committee in late October, Valenti offered a demonstration of the very real threat of Internet piracy.

Valenti told the Committee that the digital world is far more dangerous than the analog world. "The 1000th copy of a digitized movie is as pure as the original, whereas in analog each copy is degraded in quality."

Valenti provided the examples of a site advertising VCDs of films such as "Eyes Wide Shut" and "Mickey Blue Eyes" both of which are not yet available in video form. "What is even more remarkable," said Valenti, "is that you can also purchase films that have just begun their theatrical run." He offered the film "Random Hearts," released just three weeks ago, as a prime example of this. "Toy Story II" which has not even been released in theatres is on the Internet.

During his testimony Valenti played a brief clip from the MGM film "Stigmata." "This film was illegally downloaded this week and the film is still in many theaters in the U.S. and has not yet opened anywhere else in the world. But it is available on the Internet for free."

Valenti also took the Subcommittee to the popular Ebay auction site where just yesterday one could bid on a VCD copy of "Star Wars: The Phantom Menace." "This is not available in any format anywhere in the world legally," observed Valenti. "MPAA works with Ebay and other auction sites to reduce this type of piracy," he added.

Valenti next addressed downloadable media, which he said, "poses a much greater threat to the creative community." He noted that this is the same type of piracy as the downloading of illegal software or illegal MP3 files, which has pillaged the music industry.

Valenti noted that "currently our films are protected by two factors - the amount of time needed to download a full-length motion picture and the lack of unprotected digital copies of our works. But, with the increased availability of broadband Internet access you can bring down a full-length motion picture in less than 15 minutes versus the four to five hours for non-broadband."

He also observed that the advent of digital recording devices and high-definition television poses the risk of works "being digitally reproduced without permission in commercially viable forms. Our ramparts are being breached on all sides."

Downloadable media piracy can threaten the foundation of the motion picture industry by allowing a single pirate with a single copy of film to produce thousands of copies in a few hours, which are then distributed to sites all over the world. "Thus with a single keystroke, a pirate can do millions of dollars worth of damage to the potential market for a motion picture, whether or not the pirate makes a nickel from this effort," said Valenti.

In addition to how quickly Internet piracy can spread, Valenti said equipment for piracy is inexpensive and highly portable. "Pirates do not need to remain in a fixed location but can upload illegal materials anywhere in the world on any computer that is linked to a network," said Valenti.

"Today, piracy of audiovisual products costs us more than $2 billion a year," stated Valenti. Technological measures are essential, but not enough. Education is required, as are strong legal protections. Last year Congress took a major step in protecting intellectual property on the Internet with the passage of the Digital Millennium Copyright Act (DMCA)."

Valenti also emphasized that the DMCA will not work as Congress intended unless access to the WHOIS domain name database is maintained. "MPAA's piracy investigators must determine which Web site is responsible for the illegal material. The WHOIS database is the first step in determining the ultimate Internet piracy."

Valenti pledged to continue working with the consumer electronic and high-tech industries to develop effective technological protections to prevent illegal copying of digitized films.

Concluding, Valenti offered a final thought, "One of the nation's greatest trade assets is at risk. If you cannot protect what you own, then you own nothing."