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Film Theft in the UK 10 Little Portland Street Tel: +44 (0) 20 7861 7861 Email: [email protected] London W1W 7JG Fax: +44 (0) 20 7861 7862 Web: www.ukfilmcouncil.org.uk Film theft in the UK Anti-Piracy Task Force: an analysis and recommendations for action The UK Film Council is the lead agency for film in the UK ensuring that the economic, cultural and educational aspects of film are effectively represented at home and abroad. creativity encouraging the development of new talent, skills, and creative and technological innovation in UK film and assisting new and established filmmakers to produce successful and distinctive British films enterprise supporting the creation and growth of sustainable businesses in the film sector, providing access to finance and helping the UK film industry compete successfully in the domestic and global marketplace imagination promoting education and an appreciation and enjoyment of cinema by giving UK audiences access to the widest range of UK and international cinema, and by supporting film culture and heritage We want to ensure there are no barriers to accessing our printed materials. If you, or someone you know, would like a large print, Braille, disc, or audiotape version of this paper, please contact us at the address below: Communications Department UK Film Council 10 Little Portland Street London W1W 7JG Tel: + 44 (0) 20 7861 7861 Fax: + 44 (0) 20 7861 7862 Email: [email protected] Web: www.ukfilmcouncil.org.uk Contents 1 Chair’s foreword . .4 2 Executive summary . .6 3 Introduction . .9 4 Film theft in the UK: the current climate . .10 The business of film . .10 Film piracy in the UK . .12 Physical piracy . .12 Internet piracy . .19 Pay-TV piracy . .24 UK piracy in a European picture . .26 The future digital home . .27 5 Combating film theft . .28 The demographics of piracy . .28 Legal framework for combating piracy . .29 Copyright protection in the UK . .29 International harmonisation: the WIPO Treaties and TRIPS . .32 Copyright protection in the US and EU . .34 Enforcement . .35 Enforcement at a local level . .37 The need for international co-operation . .40 Security measures . .41 The filmmaking process . .41 Controlling content in the digital domain . .42 Education and consumer awareness . .43 The needs of educational institutions . .44 Developing new business models . .46 6 Consumer issues . .48 7 Recommendations . .51 The UK Government . .51 The film industry . .54 Government-backed and other film sector stakeholders . .55 Action plan . .58 Appendices (See following page) . .62 Footnotes . .85 Film theft in the UK | 1 2 Appendices i Lessons from the music industry . .62 The size of the problem . .62 Why digital music piracy exploded . .63 Dealing with music piracy . .65 Security measures . .65 Enforcement measures . .66 Education and consumer awareness . .68 Legitimate online services . .68 ii Technical solutions to the problem of piracy . .71 iii Copyright and Related Rights Directive Regulations 2003 – How the new law affects the film and video industries . .74 The basic rights . .74 Fair dealing exceptions (‘permitted acts’) . .74 Protection of technological measures . .75 Electronic rights management information . .76 Enforcement . .76 iv Alliance Against Counterfeiting and Piracy: Views on the EC Enforcement Directive . .77 v Signatories of the Memorandum of Understanding on the Co-operation in the Field of Detection, Investigation and Prosecution of Intellectual Property Rights Offences . .78 vi Glossary . .79 vii Anti-Piracy Task Force . .81 Film theft in the UK | 3 1 Chair’s foreword The pirate is often seen as a romantic hero That is why the UK Film Council, the figure, someone who steals but does so in an Government’s strategic agency for film, has honourable and victimless way. The truth is very established an Anti-Piracy Task Force. The Task different. Force brings together the key stakeholders in Film piracy is the single largest threat facing the the UK film industry to deliver a joined-up anti- UK film industry today. Film piracy is theft. Like piracy strategy in the UK to reduce film theft all forms of theft it has damaging financial and and to build public awareness of the social consequences. These effects may be less importance and benefit of copyright immediately visible than those that stem from protection. the theft of a physical object – but they are no This report maintains that film theft must be less harmful as a consequence. tackled using all available means. There is need Piracy undermines the economic basis of the for urgent action from both Government and film industry by depriving rights holders of the the film industry itself, but there is no single revenues needed to fund future films, and to magic bullet. The solutions involve, among provide jobs in our industry. Piracy cheats other things, tougher legislation, education of consumers by duping them into paying money consumers as to the economic and social for a product which is often of extremely poor consequences of piracy and in the long term a quality. Piracy also provides illicit revenues to rethinking of our business models to enable those engaged in a range of organised criminal consumers to buy legitimately what is currently activities at home and overseas. being stolen. The problem of film theft is now growing at an Also the film industry needs to prepare for alarming rate. In 2001, the number of illegal future sale and rental of films digitally through video products seized by the Federation Against broadband and via the internet. This report is Copyright Theft (FACT) was 314,000. This figure intended to help inform the debate. Failure to almost doubled in 2002 to 607,000 units, but confront this challenge will also result in in 2003 the total number of films seized rose to serious damage to our film industry. nearly 2 million units; a 223% increase on the previous year. Increasingly these problems are also transferring into the digital world by copying and file sharing on the net. This level of damage and loss to our industry is simply unsustainable. 4 Of course, the real challenge is to ensure that the legitimate rights of citizens and consumers are safeguarded whilst ensuring that adequate measures are introduced to enable rights owners to protect their intellectual property. Action is required now – at this point our industry has everything to lose. Nigel Green Chairman UK Film Council, Anti-Piracy Task Force Film theft in the UK | 5 2 Executive summary The ability to generate intellectual property are generating for the UK’s Creative Industries increasingly represents one of the keys to the sector. It is a cross-Government body – success of a modern economy. The protection including the devolved administrations – and of intellectual property rights, such as those industry, and brings together key players from generated by film and other creative industries, across the sector. The challenges posed by is therefore one of the keys to enhancing overall piracy and file-sharing are high on the agenda 1 economic competitiveness. of the Forum. Equally, the protection of the rights created by Physical piracy and the illegal transmission of an industry such as film is in the interests of films through file-sharing networks are major citizens and consumers. Without such concerns requiring urgent attention. protection the economic basis of an industry In recent years, physical piracy activity at the like film – which depends on a virtuous circle in professional criminal level in the UK has been which revenue is recycled as investment capital increasing. In 2003, the number of illegal video for future projects – will be undermined. This products seized by the Federation Against will ultimately lead to a decline in the variety of Copyright Theft (FACT) increased to nearly 2 projects made and a reduction of choice and million units, a 223% rise as compared with cultural diversity in the market. 2002. In an era when digital technology is increasingly Physical piracy costs the film industry in the UK important across the film sector, one of the key hundreds of millions of pounds every year. The challenges for the industry and for policy- UK has one of the highest piracy rates in makers is how best to maximise the ability of Western Europe. According to the Motion that technology to offer films to consumers Picture Association (MPA), only Austria and with a greater degree of choice and Germany had a higher percentage of DVD and convenience, while also ensuring the protection video piracy in 2003. and enforcement of intellectual property rights. The methodology used to quantify the losses Equally, it is important to ensure that the caused by piracy is in need of improvement. It potential of digital technology to enhance is possible, therefore, that current figures could creativity and innovation is maximised, without significantly underestimate the impact of piracy undermining the value of rights. on the UK film industry. The Government has recently created a Creative The pace of change of digital entertainment Industries Forum on Intellectual Property to technologies is accelerating. This means that discuss how best to meet the opportunities and any response to the threat of piracy must be threats that rapid technological developments 6 sufficiently flexible to respond to fluid likely industry and Government-backed and other changes in technology. The growing threat of stakeholders on how these measures could be copyright theft also extends to digital TV improved. The most important of these are services and the Internet. Peer-to-peer (P2P) summarised below. Internet filesharing networks are increasingly used as a means of illegally downloading films for free. The growth of P2P and broadband Recommendations for the (which facilitates the exchange of large files) UK Government presents serious challenges to the attempt to protect the value of film rights.
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