Impact Of Online Piracy On The Film Industry - Research Paper Example

The paper "Impact Of Online Piracy On The Film Industry" is a great example of a Business Research Paper. This study examines the issue of person-to-person (P2P) file-sharing of movies over the Internet, an activity which is legally defined as copyright infringement and commonly referred to as piracy. The specific focus of this research is the effect of P2P file-sharing on the British movie industry; the industry itself asserts that the effects are serious and financially damaging, and justifies strong copyright enforcement through legal actions for this reason. This study finds, however, that user motivations are not solely based on economic factors, and that the conventional way of regarding and enforcing copyrights may be completely ineffective in reducing or eliminating piracy. Based on the results of this and others’ research, new business models and methods are suggested to help the British film industry better address the issue.

Executive Summary

The objective of this study is to determine the extent of piracy of movies via peer-to-peer (P2P) file-sharing networks, and how business strategies of the UK film industry might be adjusted to better address the problems raised by Internet piracy. “Piracy” describes the illegal copying of copyrighted creative material such as music, film, and software for purposes other than producing a back-up copy for the purchaser’s own use (Gopal, et al., 2004), and takes two usual forms, either illegally-produced optical media (DVD) or digital files shared between users of a P2P network.

Because current copyright laws were developed before the age of the Internet and the widespread ability to transfer large amounts of material quickly, there is difficulty in separating what constitutes a copyright infringement from “fair use”. The doctrine of fair use in copyright law allows a degree of freedom to the purchaser of copyrighted material, such as duplicating it for the purposes of making a back-up copy or using it (with proper attribution), as a basis for creating derivative work. P2P file-sharing, then, can be reasonably well-defined in two totally different ways: either as an act by a user to obtain a copyrighted work with the explicit intention of not paying for it, or as an act protected by the doctrines of fair use and the non-interference of public authority in the free exchange of ideas; no differently, perhaps, and no more an infringement than letting a visiting friend listen to a new album or watch the new DVD movie one has lately purchased. The principle of strict liability in copyright law might indeed be unfair to users, but it is equally true that creators of artistic work as well as the production and distribution companies that manufacture the media to deliver the work to consumers are entitled to fair compensation for their efforts.

The extent of the damage to the film industry is an elusive quantity. The UK film industry offers widely varying figures, claiming losses of slightly over one billion dollars in 2005 (Motion Picture Association/LEK, 2006) to £338 million (about $580 million) in 2006. (UK Film Council, 2009) No doubt there are real losses to film industries around the world due to piracy, but there are two factors arising from Internet piracy, in particular, that may ameliorate the extent of the industry’s losses: First, all estimates by the industry make the assumption that everyone who downloads a shared movie file would, under other circumstances, purchase a movie ticket or legitimate DVD copy of the film. This may not be, and probably likely is not an accurate assumption. Second, the opportunity to download a movie may actually increase the likelihood of the viewer or persons acquainted with him to make a future legitimate purchase.