Earlier Films on Pay-TV Remains a Test by Studios, MPAA’s Dodd Says
Sending HD versions of new films to multichannel video programming distributors remains in testing by major studios, Chris Dodd said in his first speech in Washington since joining the MPAA about seven weeks ago. “Not every studio has made the same decision” to test “the viability of it,” he told us during a Q-and-A before media executives and lobbyists and FCC staffers. During prepared remarks at a Media Institute lunch on Tuesday and in answering questions, the new MPAA chairman several times said new technologies are spurring people to view movies in theaters. Dodd used his speech to seek a crackdown on piracy.
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Consumers aren’t staying away from cinemas just because more content is being watched at home and on mobile devices, said the former Democratic senator from Connecticut. “The rate at which these individuals actually go to the theater is higher than others,” he said of consumers who use over-the-top video services like Netflix. Of what he expects from the FCC on issues important to MPAA, Dodd told us that “I'm not anticipating any problems” and predicted a good relationship. During the tenure of chairman Kevin Martin, the association’s request on behalf of its members for a waiver of selectable output control rules, so MVPDs could send encrypted versions of HD movies to viewers sooner after they're released in theaters, languished. The Media Bureau under Chairman Julius Genachowski approved with conditions the waiver almost exactly a year ago (CD May 10 p7).
The “test” of sending movies to MVPDs earlier in their release cycles “has just begun, so let’s see how it moves,” Dodd told us about business prospects for such viewing. His comments aren’t “suggestive of any retraction” to his belief that “the theater experience, that remarkable community event that occurs within the theater,” is backed by studios, Dodd said. “But there are examples of people who live in rural areas,” who are elderly or who fall under “all sorts” of other demographic categories “willing to pay that premium price” for the movie on pay TV, he said. “Let’s see how it all comes out, before we say whether it’s a good idea or a bad idea."
Viewing pirated movies is akin to looting a store, Dodd said. He said the movie industry needs to do a better job marketing itself, and sees little disagreement among stakeholders that protecting intellectual property is important. “A major part of my job” is “to passionately fight back” against “looting,” which harms not just well-paid actors but front-line personnel and other industries, Dodd said.
"It is time that industry and government join forces to put an end to it,” Dodd said in his speech. “We need companies that are doing business with those rogue websites to put an end to it,” he said of sites using pirated films. Piracy of U.S.-made movies in other countries has “got to be far more part of the agenda” when it comes to U.S. trade issues, Dodd said during Q-and-A. “I think too often it’s been left on the side table.” Dodd predicted there’s a good chance an online piracy bill will be introduced with bipartisan support soon in Congress.
"All of us, regardless of your views on some of these matters, need to come together to put an end to what is in my view becoming an accepted form of behavior,” Dodd said of movie piracy: If not stopped now, “it will become routine.” He said Rio is an example of a film that’s been pirated in many countries, in 3D. “When millions of people hijack and steal a product like Rio, I call that looting,” Dodd said. The audience included Michael Powell, the new head of NCTA, CEA President Gary Shapiro and executives from MPAA members including Disney.
The film industry nends to do better at marketing itself, and showing consumers that it’s not “just a red-carpet industry, but more importantly a blue-collar industry,” Dodd said. “Too many believe that the only people affected by content theft or other issues that undermine this profession are the ones whose names appear on theater marquees.” The industry accounts for $140 billion in annual wages, employing 2.5 million, Dodd estimated. What he called the “online theft industry” relies on advertisers, payment processors, ISPs and Internet search engines, Dodd said. Those are “legitimate businesses that in my view debase themselves when they act as accomplices to digital theft,” he added.
A “myth” about the film industry -- like the misperception that piracy only hurts the well-off -- is that the sector and the TV industry is led by executives who behave “like dinosaurs, afraid of new technology and stubbornly refuses to evolve,” Dodd said. “We are not intimidated by the future,” and instead “embrace it,” he said: The industry is able “to evolve, and to take advantage of the opportunities presented by new technology.” Such technology doesn’t change “the fact” that the best way to see movies is in theaters, Dodd said. “They don’t produce movies for small, flat, plasma screens.”