Last month, four men who run the Pirate Bay, perhaps the largest movie-piracy Web site on the planet, were convicted in a Swedish court of promoting copyright infringement and sentenced to a year in prison apiece. These men were true believers, high-concept pranksters, and sworn enemies of the movie industry. Dubbing the proceedings a "spectrial," (an amalgam of trial and spectacle), they and their supporters drove a bus around Europe, rallying people to their side. Friends of the cause protested outside the courthouse, where the bus was parked and served as their public relations headquarters. The Pirate Bay operators reportedly tried to buy Sealand, a defunct oil rig in the North Sea, in order to escape national copyright laws. After the conviction, some 25,000 Swedes joined the Pirate Party, a political party affiliated with Pirate Bay and dedicated to the "reform" of copyright laws.
Some people, like Columbia law professor Tim Wu, are tempted to think that even though Pirate Bay is still functioning, the conviction proves that as a business model, movie piracy is dead in the water. Last year's box-office figures went through the roof, and when your biggest foe is a motley collection of coders and performance artists, it's hard to imagine that Hollywood is expiring anytime soon. "There's a difference between a life and death, existential threat and an irritation," Wu says. "An elephant might complain a lot about mosquitoes, but is that elephant in any danger of dying?"
Maybe not. But DVD sales and rentals—by far Hollywood's most important revenue source these days—peaked in 2006 and have dropped by $2.5 billion, or one-quarter of the total annual box-office take, ever since. According to Eric Garland, who monitors music and movie piracy at bigchampagne.com, more than 70 million movies were downloaded via those irritants at Pirate Bay every week—and Pirate Bay is just one of countless piracy sites on the Web. Almost one in five Internet-connected computers around the world has downloaded BitTorrent software. If anything, Pirate Bay proves that people who spend their lives ripping movies aren't in it for the money—and that even if you put them in jail, someone will always be right behind them.
Thanks to the bandwidth required to share movies and the rise of the DVD in the late 1990s, Hollywood was spared a few years before piracy reached its glitzy shores, and studio moguls were able to learn from the music industry's clumsy response to file-sharing technology. But that doesn't mean they've figured it out. Piracy grows bigger every day, and movie studios and television networks are scrambling to find a way to save their industry. Do you lace more and better encryption into your DVDs and Blu-Rays? Offer your own movies and TV shows online for a small subscription or a few commercials to sit through? Sue the bastards?
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Some studios, such as Fox and Universal, have opted for the hammer. Others, such as Warner and, improbably, Disney, have been moving toward making online entertainment as easy and convenient as possible. All of them have tried a mix of each, throwing everything at the wall and seeing what sticks. But with billions of dollars at stake, no one knows what will work. And according to Garland, they have only a few years before their window of opportunity closes and an entire generation grows up thinking free movies are simply their birthright.
"Young people are already being socialized to receive a hard drive full of first-run movies from the guy down the hall," Garland says. "In the very near future, most people will be watching what they want, when they want, on demand while they're sitting on the couch. The question for Hollywood is, do they want to be the people that offer that experience, or do they want to let someone else do it?"