Washington Comes to Hollywood to Tackle Piracy

As we watch unemployment rates hover around 10 percent the entertainment industry is facing its own labor crisis — it isn't because of the economic downturn, but piracy.

Piracy is an increasingly menacing threat as download speeds improve, making it easier and faster for consumers to illegally download content, often not knowing that they're doing so. As Hollywood watches DVD sales decline, it's anxious to ensure illegal downloads don't destroy its business model the way piracy decimated the music industry. Piracy already costs the entertainment industry some $20 billion a year.

To address this growing concern Commerce Secretary Gary Locke made his first trip out to Los Angeles to meet entertainment industry leaders yesterday. He sat down with the head of the Motion Picture Association of America, Dan Glickman, representatives of its member studios, and the leaders of the Hollywood guilds to hear their concerns about piracy and discuss what can be done to stop it. Secretary Locke also oversees the rollout of broadband, so he emphasized several times the importance of enforcing *legitimate* uses of super-fast broadband speeds.

The stakes are high: The entertainment industry employs more than 2.5 million people, and it's responsible for $80 billion in economic activity and over $13 billion in federal and state tax revenue. And the 'biz' is a huge export, carrying a fourteen billion dollar trade surplus.

So what can be done? Both Locke and Glickman agreed that education is key-- consumers often find a website and punch in their credit card, pay for a movie download and don't realize that the site is illegal and they're breaking the law. Then all the federal agencies -- the FBI, Justice Department, Commerce Department, US Trade Representatives Office-- need to work together to find and shut down piracy sites. Glickman is pushing for regulatory changes. They pointed out that many of the pirate sites are backed by international organized crime syndicates, which means they'll need massive international cooperation in terms of creating laws and enforcing them.

Now the studio chiefs and labor leaders are compiling a list of actions they think the Obama administration should take.

They're also trying to figure out how to offer legitimate alternatives to illegal downloading.

As of now, digital revenues contribute just a small piece to studios' bottom lines.