Intellectual Property is Everything and Everywhere in ShowBiz

Each year, countless celebrities traipse down the red…or champagne hue…carpet to give memorable interviews and receive critical acclaim for their work. The Oscars wouldn’t be much of a show, though, without the millions of fans who flock to screens big and small to see films such as The Whale and Everything Everywhere All at Once. Thanks to the sway of strong intellectual property (IP) protections, actors, directors, set workers, and investors can rest assured that critical acclaim will translate to commercial success. IP is the star of the show, even as a growing chorus of lawmakers and pundits question the wisdom of copyright and trademark laws. To creators and their fawning fans, IP is everything and everywhere in the multiverse of movie magic. 

An average Hollywood-caliber film has about 500 or so employees engaged in everything from acting to technical expertise to carrying duct tape to make any last minute fixes. If movies cannot successfully reach consumers through legitimate channels, the workers can’t get paid. According to a 2015 analysis by University of Maryland and Carnegie Mellon University scholars, box-office revenues could increase by 16 percent if piracy were eliminated. Based on pre-pandemic box office figures, that would amount to a yearly windfall of $300 million, or about $700 each for the industry’s estimated 450,000 employees. 

Despite claims that piracy has a positive promotional effect on films, there’s little evidence to suggest that IP violations bolster the movie industry. Study authors Liye Ma, Alan L. Montgomery, and Michael D. Smith find that any positive word-of-mouth promotion via piracy amounts to less than 2 percent of box office revenues. And, with the rise of targeted, digital advertising by production companies, even this small impact is likely to disappear altogether. Piracy is clearly a significant drain on the entertainment industry, with downstream effects including increased ticket prices for consumers and fewer entertainment jobs.

Asking a handful of movie producers or a trade group such as the Motion Picture Association to go after pirates is a losing proposition because of the sheer size of the problem. Government needs to actively enforce property rights by going after the leading purveyors of privacy. The piecemeal shutting down of sites featuring bootleg content is not sufficient when black market consumers can easily shift to other websites offering bootlegs. Rather, federal authorities must identify and shut down en masse the source sites that feed copied content to illegal streaming sites. 

Through their efforts to combat piracy, regulators in the United Kingdom learned that the latter is far more effective than the former. While the 2012 blocking of Pirate Bay failed to meaningfully alter behavior, the 2013 coordinated blocking of 19 pirate sites led to a significant shift toward legal channels of consumption. In the U.S., it is rare for shutdown orders to be comprehensive enough to encompass the third-party service providers allowing bootleggers access to bandwidth. Even the most comprehensive orders mandating that third parties stop enabling pirates only target a handful of websites at a time. This needs to change to put a meaningful dent in the bootlegging of movies and television shows.

The U.S. should also make clear that not only big Hollywood productions are protected by copyright laws. The recently formed Copyright Claims Board (CCB) is a tribunal designed to field claims totaling less than $30,000 and offers a streamlined alternative to costly litigation in court. However, nearly 70 percent of claims to date have involved pictorial, graphic, and sculptural works rather than small film productions. The CCB should make clear to fledgling movie producers that affordable legal recourse is available for copyright claims.

All creators are entitled to their due, whether it is $2,000 or $20 million. Intellectual property is the “Top Gun” America has in its arsenal for continued innovation and creativity.

David Williams is president of the Taxpayers Protection Alliance.