A Look Beyond the Red Carpet

by Neil Fried 03/17/2014 09:31 (UTC-08:00) Pacific Time (US & Canada)

An informal gathering on Capitol Hill last week with two studio executives offered members of Congress and Hill staff a peek beyond the red carpet at the business behind television and film. Beth Roberts, Executive Vice President of Business Operations at NBCUniversal Cable Entertainment Group, and Megan Colligan, President of Domestic Marketing and Distribution at Paramount Pictures, walked the group through some of the steps a script goes through before reaching the silver or flat screen in a conversational meeting hosted by MPAA CEO Chris Dodd and moderated by House Judiciary Committee members Ted Deutch (D-FL) and Tom Marino (R-PA).

Beth Roberts likely opened some eyes to the significant investment that goes into creating a television show as well as the long odds a script has of making it to air when she recounted the 80/80/80 rule of thumb. Approximately 80 percent of scripts submitted never become a pilot, approximately 80 percent of pilots never become a series, and approximately 80 percent of series never see a second season. She also observed that while new media outlets such as Netflix provide additional outlets for shows and thus revenue to offset costs, the increased competition also makes it harder for a show to garner the audiences and longevity to reach profitability. She also noted that expectations for television shows to include action scenes, special effects, and on-location work are much higher today, in part because of what audiences are seeing in movies. All of this is certainly great for viewers and diversity of content, but also increases the challenges for creators.

Megan Colligan hit similar themes from the film perspective, noting in particular that the costs of production are only one part of the equation. In fact, ensuring audiences are aware of the movie is a large part of the process. In the case of Paranormal Activity, because the horror flick relies mostly on hand-held shots and jump scare scenes, it did not lend itself to a typical trailer. Paramount focused instead on audience reaction shots in its teasers and employed social media to generate interest. Theater roll-out was then guided in large part by excitement expressed over the Internet and the places to first receive showings were not the typical cities. The strategy paid off, with the movie turning into one of Paramount’s more profitable franchises. World War Z similarly relied on a viral campaign. When the movie lacked early buzz, star and producer Brad Pitt agreed to show up unannounced at surprise screenings. Starting with a morning showing in Atlanta, he gradually worked his way to the West Coast. Tweets from excited fans of Brad sightings trailed, prompting news coverage of the unique marketing effort. The movie went on to become one of Pitt’s highest grossing films.

Thanks to the unique event, approximately fifteen members of the House of Representatives may have a greater understanding of the effort that goes into their favorite sitcoms and movies the next time they watch the Emmys or Oscars.

House Judiciary Subcommittee Hearing Points to Voluntary Initiatives as Important Piece of the Anti-Piracy Puzzle

by Neil Fried 03/17/2014 07:33 (UTC-08:00) Pacific Time (US & Canada)

On Thursday, March 13th, the House Judiciary Subcommittee on Courts, Intellectual Property, and the Internet held a hearing as part of its ongoing examination of U.S. copyright law.  The hearing focused on the more than 15-year-old Digital Millennium Copyright Act, specifically section 512 which covers the safe harbor provisions intended to “preserve strong incentives for service providers and copyright owners to cooperate to detect and deal with copyright infringements that take place in the digital networked environment.”

Testifying before the committee was a diverse panel of witnesses including two law professors, an executive at Google, a Grammy award winning composer, and two other legal counsels.  While everyone brought their own unique points of view and opinions to the hearing, the majority of members and panel witnesses agreed that content creators have every right to protect their work, and that voluntary initiatives and best practices created by both content creators and distributors is an essential part of moving us down the path of stopping the problems of piracy and intellectual property theft.

In his opening remarks, full Committee Chairman, Rep. Bob Goodlatte, stated that “there is little disagreement over the need to expeditiously remove clearly infringing content” online, while Rep. Judy Chu (D-CA) said that the victims of content theft are forced to “fight tooth and nail to protect their product.” During her opening remarks, Annemarie Bridy, a law professor at the University of Idaho College of Law, said that “no one doubts that the scale of copyright infringement online is massive or that willful infringers online are adept evaders of enforcement.”

Piracy and IP theft is endangering the livelihoods of creators, not just here in America but around the world. While testifying, Grammy award winning composer, Maria Schneider, told the members of the committee that her “livelihood is being threatened by illegal distribution of [her] work that [she] cannot rein in” and that she has to “spend countless hours trying to take it down”, usually unsuccessfully.

Rep. Tom Marino (R-PA) as someone who “does not want the federal government to get involved” seemed amazed that “we can put a man on the moon. We can transplant a heart” but that we had not been able to find technical solutions to the problems of online piracy. So what is the answer? How do we protect the content that artists and creators work so hard to make?  Part of the answer is voluntary initiatives that all stakeholders come together to create. Paul Doda, Global Litigation Counsel for Elsevier Inc., suggested that Congress “direct that there be a broadly inclusive, multi-stakeholder, standards-setting process to recommend voluntary technical measures that can reduce online infringements.” And Katherine Oyama, the Senior Copyright Policy Counsel for Google, agreed that the “combination of ‘rules of the road’ and evolving voluntary initiatives has proven itself to be an engine of economic growth for more than 15 years.”

The Motion Picture Association of America continues to look for voluntary and multi-stakeholder partners and solutions to the problems of piracy and IP theft.  We remain welcome to the Judiciary Committee’s consideration and support in our ongoing efforts.

The MPAA Joins With CACP to Welcome Secretary Johnson, Encourage Continued Focus on Protecting US Innovation

by MPAA 02/24/2014 14:14 (UTC-08:00) Pacific Time (US & Canada)

Today, the Motion Picture Association of America joined with members of the Coalition Against Counterfeiting and Piracy (CACP) to congratulate Secretary Jeh Johnson on his confirmation as the fourth Secretary of Homeland Security.

In a letter to the new Secretary, a diverse group of businesses and trade groups who depend on intellectual property applauded Homeland Security’s past efforts to combat online piracy and the sale of inferior counterfeit goods, and urged the Department to not only continue but to expand their efforts.

Recognizing that over 40 million jobs throughout the United States depend on intellectual property, including the nearly 2 million workers who make up the American film and television industry, the signatories stated that not only do these counterfeit websites mean financial loss for creators; they undermine American businesses’ reputation for quality.  Inferior quality goods also run the risk of injuring consumers.  

Past efforts by Homeland Security, such as the creation of the National Intellectual Property Rights Coordination Center (IPR Center) and ICE’s long-running “Operation in Our Sites” program, have been important measures in combating IP theft over the past several years.  The MPAA is eager to continue working with Secretary Johnson and other IP stakeholders to continue existing efforts, creating new programs for combating IP theft and protecting the work of American creators.

A copy of the letter to Secretary Johnson can be found here.

CJEU Judgment Will Help Rightsholders Create New Services for Consumers and Protect Their Content Online

by Chris Marcich 02/13/2014 07:54 (UTC-08:00) Pacific Time (US & Canada)

Today, the Court of Justice of the European Union (CJEU) handed down a significant judgment in the Svensson case confirming that linking to protected content that is made available without consent, or made available on a restricted access basis, for example on legal video steaming platforms, infringes copyright.

This is an important judgment because it clarifies the concept of what constitutes an act of communication to the public with regard to linking.  More importantly though, it reinforces the legal framework to develop legitimate online services for  consumers.  Today, Europeans have access to more legal sites on a variety of devices than ever before, including over 3,000 on demand video services.

The movie industry is working every day to develop new, innovative and consumer-friendly legitimate platforms to deliver the shows and movies audiences want.  The harsh reality is that the growth of the legal market is constantly hindered by sites that provide protected content without permission free of charge.  With this judgment, the CJEU confirms that the rightsholders have the power to define what public their protected work is intended for.  Any link that would create other than the originally intended public constitutes an unauthorized act of communication to the public and thereby infringes copyright.

In the Nils Svensson and Others v Retriever Sverige AB verdict, the court states that if the rightsholder makes available a work without restrictions on the Internet, any linking to that content would not create a new public and is therefore authorized.

We have always defended the fact that if there are creators who wish to offer their work to the public at no cost and without any restrictions - they have every right to do so.  But for those who create content for a living, they should not have to accept a world in which their content can be highjacked, for example through illegal linking and torrent sites, without consequences.  Today's judgment reconfirms this fundamental fact and will push pirate sites further into the dark shadows of the Internet.

Today's judgment further supports the view that the EU's copyright regime is fit for purpose.  The CJEU and national courts can provide important interpretations as and when needed.

U.S. Government Identifies Most Notorious Piracy Markets

by Senator Chris Dodd 02/12/2014 11:04 (UTC-08:00) Pacific Time (US & Canada)

The Office of the U.S. Trade Representative today released a report naming the most “notorious markets” for piracy around the globe, both online and in physical locations.  For the many millions of men and women worldwide who are engaged in creative industries like film, TV, music and publishing, this is important news.  Identifying the source of the problem is a crucial step in reaching real solutions that will help foster commercial enterprises like the more than 400 online sites for viewing legitimate movies and TV shows that are now available in nations around the world. 

The notorious markets identified in today’s report include peer-to-peer networks, Bit Torrent portals, infringing download and streaming hubs, linking websites and newsgroups. Not only are they responsible for significant financial loss to creators and rights holders, but by denying them the ability to be compensated for their work, they also undermine the ability of creators to innovate and take risks.

Here in the United States alone, there are nearly 2 million workers whose jobs depend on the movie and television industry, earning over $104 billion in total wages.  For these workers and their families, piracy can mean declining incomes, lost jobs and reduced health and retirement benefits.

The MPAA supports the USTR’s efforts and greatly appreciates its interest in combating content theft. And while the USTR is an American government agency, the sites detailed in this report also pose major threats to filmmakers and other creative industries worldwide. It is my hope that publication of this report will encourage government officials and private industries across the globe to work together to curb the growth of piracy.

Looking to Watch a Movie or TV Show? There Are Now 100 Legitimate Online Services in the U.S.

by MPAA 02/11/2014 13:25 (UTC-08:00) Pacific Time (US & Canada)

For movie or television fans seeking to watch a new show or revisit their one of their favorites, there is good news in the latest compilation by the MPAA of online services, both here in the United States and throughout the world.

Here at home – there are now 100 online services offering viewers legitimate full-length films and television shows.   And worldwide, there are now at least 413 such services, of which more than 60 of these, such as iTunes and Netflix are available in multiple countries.

In the United States, the MPAA has created a website: www.WhereToWatch.org where viewers can learn – including some well-known sites like Amazon, Target Ticket, Hulu, HBO GO and Crackle, or others that feature more independent fare or shows from other countries, such as FindAnyFilm, FlixHouse, Viewster, and IndieFlix.

One of the more recent highlights in the fourth quarter was the announcement that beginning February 24th, World Wrestling Entertainment (WWE) will be launching an online streaming service for all of their Pay-Per-View events and original content. The service will first begin here in the United States, before becoming available to international fans in the U.K., Canada, Australia, New Zealand, Singapore, Hong Kong and the Nordic countries by the end of the year.

Other notable developments that occurred in the last quarter include: the announcement that thirteen world premieres of films from the Toronto Film Festival will be available exclusively on Vimeo for 30 days beginning March 21st; the announcement that Korean-based DramaFever is expanding into children’s content by streaming 12 Korean children’s titles in response to customer demand for kid-friendly content; and the launch of an online cinema providing access to 30 TV series and 10 thousand episodes by Russia’s second largest social network, Odnoklassniki.

The number of innovative online viewing options for audiences around the world continues to expand at an astonishing rate. For consumers who love great film and television shows this is terrific news, but it is also welcome news for creators looking for innovative ways of developing new shows and existing services looking for new means of bringing this content to viewers throughout the world.


The Economic Contribution of the Arts and Culture

by Anna Soellner 02/11/2014 10:31 (UTC-08:00) Pacific Time (US & Canada)

The MPAA and the Copyright Alliance hosted a briefing Monday with the National Endowment of the Arts (NEA) on the new Arts and Cultural Production Satellite Account (ACPSA), a joint federal effort with the U.S. Bureau of Economic Analysis (BEA). Back in December 2013, the agencies released a report that detailed for the first time the economic contribution of the arts and culture industry to the GDP. The findings were significant and showed that the arts and culture production account for 3.2% --or $504 billion—of GDP in 2011. Yesterday’s event delved further into how those numbers are calculated and exactly what they do, and don’t, include.

Sunil Iyengar, Director of the NEA Office of Research and Analysis, was on hand to help us interpret the data, and explain the methodology used to quantify the impact of arts and culture on the GDP.  Most notable, at least to those of us in the film and television industry, is that the arts and culture sector is a larger contributor to our economy than transportation, agriculture or tourism, among others. Broken down even farther, the data showed that the copyright-intensive industries of the arts and culture segment alone account for 2% of the GDP.

On the NEA’s website, you will find a white paper that breaks down this sometimes complicated, but important, data. While the GDP captures the final value of the goods and services produced in the United States, ACPSA explains and graphically depicts the contribution to the GDP by commodity type. For example, the motion picture and video merchandise and services industry represents a staggering $82.2 billion of the $504 billion total contribution of arts and culture industries to the GDP. Later this year, NEA expects to release another set of data to include investment from “artistic originals,” as they can continue to earn revenue for decades after production and previously have not been captured in the total GDP. We look forward to seeing more of the government’s assessment of film and television’s contribution to the American economy.


The Real Impact of State Motion Picture and Television Production Tax Credits

by Kate Bedingfield 01/28/2014 11:30 (UTC-08:00) Pacific Time (US & Canada)

A USA Today story that posted last night on the economic impact of statewide film and television production tax credits unfortunately omits important facts that would have been helpful in presenting a balanced story.  While the piece accurately notes that productions spend heavily with local vendors and small businesses including lumber, dry cleaning and lighting, it fails to take a comprehensive look at the economic benefits that have been reaped by states that have built and maintained a robust credit program.  The motion picture and television industry is a portable one, and producers need a consistent, reliable economic environment in order to plan to bring production to a state.  That’s why states like Georgia, Illinois and New York have enjoyed such economic benefit in the form of jobs, spending and tax revenue.  You can read about some of their successes here, here and here

Numerous studies over the past two years have shown that incentive programs for film and television production have resulted in a significant return on investment for a number of states including Massachusetts, North Carolina, New York and Florida.  Unfortunately, the story doesn’t mention any of this data.  

These programs generated new revenue for state coffers, created tens of thousands of jobs and stimulated business for local vendors.  In short, they provided an important economic boost to the state.  Here are a few highlights from those studies:

  • New York: A December 2012 study found that production incentives supported 28,900 jobs and generated $6.9 billion in economic spending in the state in 2011.  The study also found that jobs within the film and TV industry in New York grew by nearly 25 percent between 2008 and 2011 – even while private sector employment as a whole declined by 1.6 percent during that time.
  • Florida: A March 2013 study on the economic impact of the Florida Film and Entertainment Industry Financial Incentive Program estimated that state and local tax revenues in Florida in the 2011-2012 fiscal year totaled $547 million.  The study also found that the incentive supported 87,870 jobs and $2.3 billion in labor income, as well as $7.2 billion in economic spending across the state, both through production spending and induced tourism.
  • North Carolina: An April 2013 analysis of the economic impact of Iron Man 3, which filmed in North Carolina, found that the film was responsible for $179.8 million in spending and 2,043 jobs in the state.  The analysis also found that the production was responsible for $104.1 million in labor income across North Carolina, and that spending associated with the film engaged 719 vendors in 84 communities across the state.
  • Massachusetts: A May 2013 study on the economic impact of the Massachusetts Film Tax Incentive Program found that for every $1 of film tax incentive awarded in 2011, $10 in spending was generated.  A total of $37.9 million in film tax credits generated $375.3 million in economic output, and the incentive was responsible for 2,220 jobs in the state.

Nearly 40 states around the country have implemented programs to encourage the local production of movies and television in their communities for one simple reason: motion picture and television production is a driver of local economic growth and capital investment.  When looking at the economic impact that these credits have on local economies, it’s important to look at the whole picture. 

More state-by-state statistics on the production tax incentives can be found HERE.

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