Last week, the Expendables 3 was leaked online three weeks prior to the movie’s on-screen release date. It was downloaded close to 100,000 times in the first 12 hours and days later had already surpassed 500,000 downloads, making it the most pirated movie of the week. Pre-release privacy costs films millions, while reducing creativity, stalling innovation, and harming free speech. While our beloved action heroes were unable to protect their movie from copyright infringement, the Internet community can adopt initiatives to reduce future leaks.
The Expendables III is not the first movie to be pirated before it was released in theaters. This type of leak has occurred for a variety of prominent movie releases, including Star Wars Episode III, Revenge of the Sith, Disney’s the Avengers and X-Men Origins: Wolverine, an incomplete work print copy of which appeared several weeks before the official theatrical release in 2009. Pre-release piracy hurts films because the people who are most interested in seeing the film are those most likely to pirate the pre-release, and therefore not pay to see it in theaters.
The Governmental Accountability Office (GAO) estimates that piracy as a whole may cause the U.S. economy to grow more slowly because of reduced innovation and lost trade revenue. One of the few studies to analyze the damage of pre-released piracy, conducted by a team of researchers from Carnegie Mellon University, found that on average the practice causes a 19.1 percent decrease in revenue compared to piracy that occurs post-release. To put that into perspective, the Expendables 1 raked in over $270 million in box-office sales worldwide and Expendables 2 made just over $300 million. If the Expendables 3 was projected to make a similar amount of money as its predecessors, the pre-release piracy would cause it to lose between $51 and $57 million in revenue. Carnegie Mellon’s report found that slightly less than 10% of movies get pirated early, but given the sheer number of movies released each year, with over 50 movies released in January 2014 alone, this is no small chunk of change.
Losses like these could ultimately lead to a chilling effect of creativity in Hollywood, where studios continue to pursue the same tried-and-tested money-makers at the expense of new out-of-the-box ideas. To take steps to curb piracy, lawmakers should continue to discuss voluntary initiatives like the 2013 Copyright Alert System (CAS), which alerts and educates Internet subscribers about online piracy. In this system, Internet service providers (ISPs), like AT&T, Time Warner, Verizon and Comcast, voluntarily engage with their subscribers when they pirate online. Other voluntary initiatives promote legitimate content services in search engine results, prevent users from sharing copyrighted materials on sites hosting user-generated content , and discourage ad networks from showing ads on sites hosting infringing content.
Congress should support full adoption of these voluntary initiatives to help make our entertainment industry less expendable. Unfortunately, our action heroes cannot help in this ongoing battle against online piracy. No matter how much he says it, Sylvester Stallone is not “the law.”