Most Hollywood Producers Believe Copyrights Can be Protected Online

Posted on August 3, 2000

Almost three out of four film and television producers believe that copyrights can be protected on the Internet despite the major concern about online piracy, according to the Red Herring/Hollywood Reporter Report on Convergence in Hollywood. Copyright protection has emerged as a major issue for the entertainment industry, as demonstrated in court battles against providers of file-sharing technology, including Napster.

The Motion Picture Association of America estimates that piracy costs the industry $250 million annually, and that figure could rise dramatically if file sharing of video content becomes more widespread. Despite the possibility that file sharing could hurt the revenues of film and television producers, 70 percent of producers think that copyrights can be protected online, ensuring they are properly compensated for their creative efforts.

That optimistic opinion is found in a new study conducted by busingg and technology publication, Red Herring magazine, and The Hollywood Reporter, an entertainment industry news magazine. The survey results were presented at Red Herring Events' ``Herring on Hollywood'' industry conference.

The Red Herring/Hollywood Reporter study also found that producers who are involved to some degree in online production (20 percent of respondents) are even more optimistic about copyright protection, with 82 percent of them expressing the opinion that online copyrights can be protected.

``This study demonstrates that Hollywood's creative community is mostly optimistic about the Internet's effect on the entertainment industry,'' said Robert LaFranco, bureau chief of Red Herring magazine. ``They realize that revolutionary Internet technologies not only create great upheaval, but also present new opportunities for their creative efforts.''

``Hollywood's creative elite remain upbeat about the changes the Internet could bring,'' said Robert J. Dowling, editor-in-chief and publisher of The Hollywood Reporter. ``On the subject of copyright protection, while the results show that the creative elite feel copyrights will be protected online, the underlying message was that they simply must be, in order for the industry to further embrace digital media.''

The Red Herring/Hollywood Reporter survey of 70 high-ranking members of the Hollywood creative community found that while the creative community is optimistic about copyright protection, the study also revealed several other major findings:

• Distribution - The Internet allows the possibility for producers to bypass traditional distribution channels - movie studios and television networks -- and distribute content to consumers directly (just as author Stephen King began publishing a serial novel this year online, bypassing major publishers and book distributors). Producers are willing to consider severing their relationships with studios and networks in the wired world, but only if their new partners -- and their own staffs -- have the right expertise. Fifty-five percent of producers who said they were involved with online production favored handling online distribution themselves, compared with only 26 percent of producers who are not involved with the Internet.

• Dealmaking - Because widened Internet pipes would make distributing video content more convenient to consumers, producers could use direct distribution as a bargaining chip in their negotiations with studios and networks. Sixty-one percent of survey respondents said the Internet would give them dealmaking leverage. "We're working to expand our legal contracts on every deal," said one survey respondent. "So the online contract or window will be a very significant negotiating chip, giving us bigger deals and new revenue streams."

• Convergence - While low bandwidth and slow download times limit the convenience of online video now, most producers say that broadband pipes will begin to have an impact on online distribution in the next five years. Those faster connections are expected to open a wider universe of digital content. Fifty-nine percent of survey respondents say most entertainment will be delivered online within the next five years, while 11 percent say the shift will never occur. One of those holdouts said people enjoy going out to the theater: "Part of moviegoing is a communal experience, 75 people groaning in unison (at a scary movie). There's nothing like that."

• Content - Because most of online entertainment content has been produced outside of the mainstream Hollywood system, it often has an interactive or narrow focus for a targeted audience group. Hollywood executives were asked if increased Internet bandwidth would change the nature of traditional content. Most respondents, 76 percent, said Internet content will be mainstream as Hollywood directs its creative efforts toward interactive media.