Film theft in the UK - Future of Copyright

10
4 Film theft in the UK:
the current climate
The business of film
The film industry is based on a business model
which involves a complex series of release
windows. This model maximises profits by
exploiting film content via three key interlinked
dimensions: time, technology and geography.
• Time is exploited through sequential release
windows tied to technological platform or
format (essentially, when and how the film
becomes available)
• Geography is exploited through rights tied
to territory and language (that is, where the
film becomes available), based on the territorial
nature of copyright.
As technology stands currently, this means that
a film premieres first in the cinema (the
theatrical window), then makes its way onto
DVD, VHS video and in some territories Video-
CD (the video window), before progressing
onto television – first on pay-per-view and
subscription television (the pay-TV window),
then onto free-to-air television. 3 In each
instance, exclusive access to a new film ahead
of the next ‘window’ in the value chain has
been considered by the industry to be critical to
maximising turnover.
It also means that a film becomes available in
some territories earlier than it does in others.
For practical reasons, most films are released
earlier in the US (the largest single revenue
generating country for film) than Europe or
indeed the rest of the world. However, over
recent years there has been a steady reduction
in the time lag between the US theatrical
release and theatrical release elsewhere – and
indeed some movies are now released more or
less simultaneously in all key global territories.
This business model has been developed over
decades as a commercially viable way of
generating a sufficient return on investment to
protect filmmakers against the risks inherent in
bringing new movies to the market, many of
which do not make a profit. Indeed, not every
project that is developed becomes a motion
picture and not every film that is produced is
profitable. According to the MPA,
approximately ten projects are developed for
every major film project that is “greenlit” (ie, a
decision is made to produce a motion picture
based on that project), and four out of every
ten films do not recoup their total production
and distribution costs.
Production costs are not recouped from
theatrical revenues alone 4 ; rather production
costs, as well as overhead and the costs of
those projects that have been developed but
not produced, are recouped from all media and
markets in which the film is exploited. If any
medium or market is cannibalised or destroyed
by piracy, the loss is felt not only in that market,
but in all subsequent distribution markets, and
the amount of money available for production
of the picture at issue (not to mention
recoupment of development costs and losses
on non-profitable pictures) are similarly