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Thursday, July 31, 2003
Hollywood hunts for pirates


If you're thinking about downloading a bootlegged copy of X2: X-Men United or The Matrix Reloaded, you might want to look over your shoulder for the feds..

After watching the music industry be financially hammered by piracy, Hollywood moguls want to follow its recent lead and go after individual consumers who illegally download or file share copyrighted films.

"We can't allow what happened to the music industry to happen to the movie industry," says Jack Valenti, president and chief executive of the Motion Picture Association of America (MPAA).

The reason for the new stance is that movie executives are having nightmares that file-sharing consumers who've swapped music for years are developing a growing appetite for free movies. And they've been watching the Recording Industry Association of America's increasingly aggressive response to the piracy that is feeding a decline in sales. Four college students were sued in April for online swapping and settled for up to $17,500 each. In June, subpoenas went out to universities and Internet providers to identify more swappers, and the RIAA plans "hundreds" more lawsuits against individuals in September.

Worldwide piracy now costs the studios an estimated $3 billion to $4 billion a year. Much of that still is lost the old-fashioned way sales of bootleg DVDs and videos.

But as the music business has shown, potential losses from online digital piracy are much higher. And more and more consumers have access to high-speed Internet connections, which make it feasible to transmit movie files. They now are downloading 400,000 to 600,00 movie files a day, according to industry estimates.

In a recent America Online poll, nearly 70% of respondents did not believe or weren't sure that "swapping" movies online was illegal. But studio executives don't buy that.

The studios also are working on the next phase of DVD technology, with tougher encryption codes that might solve the problem, but that technology is still three to four years from market. "We're confident the next wave of DVD products will be much more difficult to file share with," he says.

Jail time. The recent federal prosecution of 25-year-old Kerry Gonzalez of New Jersey for stealing a preview copy of The Hulk and posting it online before the film's release was a warning shot. Gonzalez pleaded guilty to one count of copyright infringement and faces up to three years in prison and a $250,000 fine.


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