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November 5, 2004. NY Times Movie Industry Preparing Suits on File Sharing By MATT RICHTEL and SHARON WAXMAN
oping to head off the kind of rampant online piracy that has plagued the record industry, Hollywood's major movie studios said yesterday that they would begin filing lawsuits this month against people who make copyrighted films available for downloading over the Internet.
The lobbying group for Hollywood's seven major studios said the companies decided on the aggressive strategy after concluding that record companies suffered financial consequences because they waited too long to combat people who were sharing digital music files.
The move is the first major initiative for Dan Glickman, the former congressman and agriculture secretary in the Clinton administration, who in September became president of the Motion Picture Association of America. At a news conference at the U.C.L.A. School of Theater, Film and Television, Mr. Glickman said that after examining the issue of Internet piracy of films he concluded, "if we didn't act now, this behavior would become more and more common in American life."
Mr. Glickman, who was surrounded by leaders of Hollywood's labor unions, added that "the longer we waited, the worse it would be." Movie executives involved in the litigation said they expected as many as 230 lawsuits to be filed. Mr. Glickman would not confirm any figure.
The movie industry's decision to sue individuals adds more tension to the already uneasy relationship between the owners of intellectual property and the legions of music, movie and book fans who use the Internet to share copyrighted files.
After suing the makers and distributors of the file-sharing software programs, the record industry last year began to take aim at people who share music files. Since September 2003, the industry has sued 6,191 individuals, according to the Recording Industry Association of America.
None of the music suits have gone to trial. But there have been more than 900 settlements, averaging $3,000 in damages paid to record labels, the industry group said. It asserts the lawsuits are helping reduce piracy. But by the industry's own accounting, more than 2.5 million people a day continue to trade music files on FastTrack, which the industry group says is the largest file-sharing, or peer-to-peer, network.
Independent experts, however, remain unconvinced that litigation works. Jonathan Zittrain, an expert in Internet law at Harvard Law School, said the lawsuits had had "an insubstantial effect," given the millions of people still downloading copyrighted music.
By comparison, the sharing of movie files is still quite limited. BayTSP, a company that tracks file-sharing for record labels and movie studios, reports that tens of thousands of copies of popular movies are available for downloading from file-sharing networks.
Just how many people download movie files is harder to determine, according to BayTSP and movie executives, who say they do not have an estimate of the size of the problem.
What is clear is that it currently takes significantly more time and computer power to download movies than to download songs because movies are much larger files.
Even with a high-speed Internet connection, it can take two hours to download a film, said Jim Graham, a spokesman for BayTSP. Also, the quality of the movies can be poor, according to Mr. Graham, because at least in the case of new releases, the files are created from bootlegged copies shot by people who have taken a camcorder into a theater.
Mr. Graham said that people of all ages appeared to be sharing movie files. But he said that a high percentage of people downloading files appeared to be college students, because file-sharing activity drops by 20 percent to 25 percent during summer vacation and winter holidays.
The motion picture association did not say who would be sued, nor would it say whether it would go after heavy file sharers or people who have downloaded only a handful of films. Studios are entitled to damages of up to $30,000 for each illegally downloaded film under copyright law, but in cases where intent could be proved, damages could rise to $150,000, said Simon Barsky, the association's general counsel.
Mr. Glickman acknowledged that the record industry lawsuits generated ill will among consumers, a result that concerns some movie studios, with Walt Disney voicing the most reluctance about pursuing legal action. Twentieth Century Fox and MGM have been most eager to pursue the strategy, according to studio executives involved in the issue.
Gigi B. Sohn, president of Public Knowledge, a public-interest advocacy group that focuses on intellectual property and copyright policy, said the industry risked a public relations headache if it sued "grandmothers and 12-year-old girls."
Ms. Sohn said she also believed that the movie industry could curb piracy by offering alternatives to downloading pirated files.
At the moment, there is no convenient way to download movies legally. Part of the solution to piracy, Mr. Glickman said, will be finding a commercial structure, similar to the dollar-a-song online music stores, that can "get movies to young people."
Matt Richtel reported from San Francisco for this article and Sharon Waxman from Los Angeles.
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