LITTLE ROCK — A new high-profile movie bootlegging case involving the coming Oscar hopeful American Gangster shows that Hollywood's supposedly reinforced preventive measures on piracy aren't as reliable as the industry thought.
The movie, which stars Denzel Washington and Russell Crowe, is being distributed by General Electric Co.'s Universal Pictures and is set to open to the public Friday. The premiere took place Oct. 19 at the Apollo Theater in New York.
But the movie has been available since at least Wednesday at various file-sharing sites on the Internet. High-quality DVDs were being sold for $5 on Thursday morning in Los Angeles, where someone in a car pulled up in front of a Wilshire Boulevard office building andquickly sold a few copies before moving on.
While studios have come to accept that their movies will quickly find their way onto the Internet after their theatricalreleases, they have been fighting hard to prevent them from landing online before they hit the big screen. For the past few years, the studios seemed to be succeeding in that mission, with few prerelease-piracy issues. The companies have taken extensive security precautions at prerelease screenings in theaters and have been vigilant about stamping watermarks on other copies of films that circulate in a quest to identify potential pirates.
But early releases are on the upswing again. Earlier this year, Ratatouille, the animated film from Walt Disney Co.'s Pixar, began appearing online about 10 days before its official release.Other titles that have been affected this year include Weinstein Co.'s Sicko and Lions Gate Entertainment Corp.'s Hostel: Part II. The events show that leaks may be occurring during postproduction, when various vendors working on each film have access to it.
The impact of such releases on a film's ultimate box-office and DVD performance is hardto gauge, but industry officials say there is no doubt that it hurts.
"The longer you can prevent a scenario like this one with American Gangster from occurring, the better the return on investment for a studio," said John Desmond, vice president of SafeNet Inc.'s MediaSentry, an online piracy-research company.
In the case of American Gangster, the problem is compounded by the excellent quality of the bootleg versions, which appear to be pristine, lacking even the "not-for-distribution" scroll at the bottom of the screen that would identify it as an "early screener." If a movie is going to be pirated, the ideal for studios is for poorquality copies to predominate online for as long as possible, Desmond said, since consumers are then more likely to buy a theater ticket rather than a poor-quality bootleg DVD.
Universal officials say they aren't sure how a copy of the movie leaked. In recent years, studios have clamped down on many sources of piracy, such as copies leaking out from postproduction houses or members of the Academy of Motion Picture Arts and Sciences, who vote for the Oscar awards and typically receive DVD copies of films at the beginning of theannual awards season. But Universal says that isn't the case in this instance.
"There have been no screeners sent out to members of the academy so that's 100 percent impossible as the cause of how this leaked," said Michael Moses, a Universal Pictures spokesman.
American Gangster is a project many years and more than $100 million in the making, and the studio has high Oscar hopes for it. The early release is "disappointing and devastating, but unfortunately, it's part of doing business," Moses said.
Equating every bootleg copy with a lost sale is faulty logic, many in the industry say. Many people who buy the illegal copy are prepared to spend $5 for the bootlegged movie but wouldn't have forked out $20 for the legitimate DVD, let alone paid for the whole family to see it in a theater.
The situation leaves studiosin a predicament. They need to hammer hard on piracy, presenting it as a serious problem worthy of crackdowns by law enforcement, lawsuits and massive public-relations campaigns.
At the same time, they are sometimes reluctant to concede ground to the pirates. After the leak of Hostel: Part II, Tom Ortenberg, president of Lions Gate Films Releasing, told the Los Angeles Times it wouldn't hurt box-office sales much because the early leak was of such poor quality. When the movie didn't do well as well as he had hoped, director Eli Roth blamed piracy.
The industry has prosecuted individual pirates - though the consequences are often underwhelming. When Star Wars: Episode III - Revenge of the Sith leaked online a few hoursbefore its 2005 release, the industry used forensic technology to determine that the leak originated with an employee at a postproduction house who had lent a copy of the movie to friends, one of whom uploaded it onto the Internet.
Eight individuals we re charged in that case, most with misdemeanors. The man who originally took the movie was sentenced to two years' probation and a fine of $2,500. The uploader was fined $1,000 and sentenced to four months' house arrest as part of a threeyear probation.
Business, Pages 23, 24 on 10/29/2007