According to communications watchdog OFCOM, 12 per cent of homes have broadband access, double that of the previous year. At the same time, technology's renegades have opened the 'freemium' floodgates by creating peer-to-peer (P2P) file-sharing systems, such as KaZaA, Gnutella and eDonkey, which allow consumers to download their favourite songs or shows overnight. Now the next generation of developers are forcing the film industry to face up to piracy as the movie-going public realises they can bring the cinema to their home.

Feature films and television programmes are among the most in-demand items on file-sharing networks according to Eric Garland, CEO of BigChampagne, a company that tracks P2P downloads internationally. “While the number of mp3 files still dwarfs movies and TV, bit for bit there are more films swapped online than anything else," he says.

The film industry is slowly beginning to address this issue. In limiting release-time leaks of The Last Samurai, every print of the movie was encoded with a hidden marker: scripts were labelled with owners’ names and irrelevant characters were meticulously edited out of tapes awaiting dubbing. No doubt this saved millions in opening weekend figures, although 50,000 copies of the film are now circulating on the internet.

According to AT&T, last year 77 per cent of pirated films available online came from industry insiders – from Oscar Academy members to cinema projectionists. Consequently the industry has slashed the number of pre-award “screeners” sent out for adjudication. The Independent Film Project fears that voters will now only have a limited time to see movies at the cinema, to the detriment of more low-key independent releases.

The one safety net for the film industry was that the size of high-quality movie files, typically 5GB, made downloading impractical. Success would be depend upon having a secure, robust connection to a user with large bandwidth. Step forward BitTorrent. The brainchild of Seattle programmer Bram Cohen, BitTorrent locates and connects people seeking the same file. That file is broken into ‘bits’ for downloading, after which you yourself become a platform for someone else to download from. The more people sharing bits, the faster the downloading becomes. By harnassing other users' bandwidth, downloads are completed much quicker than with KaZaA, until now the most popular mixed media P2P platform.

BitTorrent’s expanding inventory boasts a mouthwatering cache of US programmes, from ER to the OC, all of which have a worldwide audience. Its global reach is now rendering 'export lag' times a thing of the past. So has this software revolutionised public viewing? George Manning, 25, a programmer from Croydon, thinks so: “It has changed how I watch films. Everything is via my PC. Film quality is excellent thanks to much better compression techniques. I’ve just downloaded the BBC’s Wallander. It’s great.” Would home viewing discourage people from going to the cinema? Manning thinks so: “I recently watched a download of Mystic River. I wouldn’t have bothered going to see it at the cinema.”

BitTorrent does not advocate copyright infringement according to its founder, Bram Cohen. “BitTorrent can be, and is, used to distribute all kinds of content. There are millions of files distributed legally using BitTorrent. It’s no more a piracy tool than http and ftp [both used for everyday access to the internet].”

One defence that Cohen might rely on is that BitTorrent doesn’t provide the centralised search functionality that proved to be a major nail in the coffin of P2P music-sharing giant Napster. It has what US lawyers call "substantial non-commercial uses" according to Julian Midgely of the Campaign for Digital Rights. “BitTorrent is one of the few P2P protocols used widely for things outside of piracy,” says Julian Midgley of the Campaign for Digital Rights. “Some projects use the software to distribute binaries while academics may share large seismic sets of information.”

The American TV industry is not convinced and is closing down sites almost as quickly as they appear. But despite their efforts it only takes a short time for eager sharers to put up another BitTorrent web page linked to the latest programmes. It is as if copyright owners and regulatory bodies are trying to contain a piracy pandemic. 

EU law takes a tougher stance. Under the recently passed the European Union Intellectual Property Rights Enforcement Directive (EUCD), making a copy is an infringing act unless specifically exempted. Even making private copies of CD tracks in MP3 format on a PC is deemed an infringement (Article 6.1). Ian Brown, editor of the Foundation for Information Policy Research, claims that the directive encroaches upon civil liberties, "removing European citizens’ rights at the behest of Hollywood".

The EUCD also makes it illegal to circumvent a protection measure, whether intentional or otherwise, and outlaws any tool or service designed for circumventing. Eric Garland questions the logic of this legislation and believes that P2P platforms such as BitTorrent are simply allowing people to maximise the distribution potential of the internet. “In many ways the internet is one vast P2P network,” he adds.

Since Christmas, the number of BitTorrent users worldwide has jumped from the thousands to millions. Jack Valenti, Chairman of the Motion Picture Association of America, claims that around 500,000 films are being illegally downloaded each day. To him, the threat to TV is also clear. “Which broadcaster is going to pay for the new series of if millions have already seen it on the internet?” he asks. 

This is “demonstrably specious”, says Julian Midgley who claims that far fewer people will have downloaded the series than Valenti thinks. “Until pipes are wide enough to get films and TV series downloaded in reasonable time, online pay-per-view is a long way off.”

In the UK, little direct action is being taken to combat BitTorrent activity. Ian Thomson, of the UK Film Council’s Anti-Piracy Task Force, concedes: “We haven’t moved forward. We are a fragmented industry that's losing money literally out the front door.” The council recognises the potential for online cinema after the successful pilot premiere of last year. Thomson believes the platform could prove influential in promoting Brit-financed films, as long as “distribution channels are modernised and a legitimate market is upheld”. Otherwise, he fears that the “sea change in British film success could be scuppered by the film piracy onslaught”.

A 2003 study by Q2 Research, a London-based marketing company, revealed that 40 per cent of the UK population regularly use the internet each week. Of these, 23.5 per cent download music and three per cent download films. Indications are that the figures have doubled by now. But the FDA, the trade body for UK distributors, remains calm. Spokesperson Mark Beatty acknowledges the rapid increase of piracy but believes that by raising awareness of its harmful effects on the film industry and emphasising the larger-than-life cinema experience, “as it was originally intended”, the industry will prevail.

However, he continues: “Complacency is the enemy of action. We must always be looking at things from a customer needs angle; maybe that is pay-per-view downloading.” For now, British home cinema holds firm. The latest figures on consumer spending from media research consultancy Screen Digest revealed an increase in DVD and video revenue from £2.05 billion in 2002 to £2.4 billion in 2003. Similarly, cinema revenue rose from £645 million in 2001 to £742 million last year.

For many though, physical piracy will become a greater concern given the ubiquity of DVD players to harness the fruits of filesharing. Research by The Federation Against Copyright Theft (FACT) reveals that 'in-the-hand' piracy in the UK increased 83 per cent between 2001 and 2002, costing the industry an estimated £400 million. 

Many BitTorrent sites also distribute the BBC’s material. How does "the world's leading public service broadcaster" plan to protect its interests? “We do not advocate illegal online file-sharing,” says Janet Morrow, acting communications manager for BBCi.“We hope to provide broadcasting content on demand through the Creative Archive, which launches in the autumn, allowing people to download and manipulate clips from BBC factual programmes for non-commercial use.” She clearly states that this does not involve BitTorrent technology. 

Hollywood dare not ignore the prophecy of the music industry where international CD sales have fallen year on year by seven per cent since 2002. Despite movies being less of a repeat usage product than music, the film industry must invent a new business model for a new interconnected world. “Nobody believes you’re going to dissuade people from downloading,” says Eric Garland. “So the mandate is clear: charge for distribution of copyrighted material online without naively believing you can control that distribution.”
One fanboy shows which side he's on


A report about film piracy and the threat posed by programmer Bram Cohen's BitTorrent technology in 2003. This was commissioned by the Independen Read More

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