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The State of Adult Content Piracy

The State of Adult Content Piracy

July 29, 2009
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" Unless studios and the industry collectively develop a multifaceted anti-piracy strategy, others are sure to follow. "

Anyone who makes a living creating or selling adult movies understands the impact of piracy. Recently, another gay studio announced it is going out of business. It cannot compete with the massive amount of free available content. Unless studios and the industry collectively develop a multifaceted anti-piracy strategy, others are sure to follow.

In order to develop an effective anti-piracy strategy, it is important to know who the pirates are, how and where piracy occurs, and how to combat it. In some cases this will require changes in business models. In other cases it will involve litigation.

Knowing the infringers involves understanding what motivates them and determining if and how to turn them into customers. Certainly price is an issue, but it is not that simple. People are attracted to pirated movies for other reasons. The porn-sneaking husband may not want to explain charges on the family credit card statement. Some folks may go to an infringing site because it offers different types of content from multiple studios all in one place. Certainly, there are those who don’t want to pull out their credit cards for fear of being ripped off. Others may feel a sense of community. And, there are things consumers don’t like about the pirate sites. User Generated Content sites (UGCs, or tube sites), only offer low-resolution Flash files and the indexing is unreliable. Methods may be cumbersome and sites may be difficult to find or access. These are all non-price related factors in which studios can very effectively compete. If you think people will never pay for something they can get for free, consider bottled water.

Part of the adult film industry’s anti-piracy strategy must be to determine the non-price related factors and adjust marketing and distribution models in order to compete. The music recording industry was slow to learn this lesson and it cost them dearly. Always creative and ahead of the curve, the adult film industry by in large has been much more effective in this regard. However, new distribution methods and clever marketing alone will not save the industry from the harm that piracy inflicts.

Unlike the perhaps over-zealous RIAA, the adult film industry has been reluctant to turn to the courts to enforce intellectual property rights. While litigation alone cannot provide the solution any more than marketing alone, it must be considered and used when appropriate.

For many years the adult entertainment industry more or less ignored the problem of piracy altogether, but the proliferation of adult tube sites finally caught the attention and the ire of adult content producers. Studios have reason to be alarmed; these sites are among the most trafficked on the Internet. Nothing creates traffic faster than free porn. Yet illegitimate tube sites are vulnerable. If the industry unifies and proceeds wisely, tube sites will become less of a threat in the coming years.

One of the reasons adult UGC sites are vulnerable is that they often do not comply with various requirements of the Digital Millennium Copyright Act (DMCA). This law provides Internet service providers (ISPs) with broad protection against claims of copyright infringement. However, many adult tube sites fail to satisfy the Act’s prerequisites and are ineligible for its protections.

Also, the adult tube site business model is fragile. These sites, which require a large amount of bandwidth, only generate revenue by sending traffic to affiliates or earning revenue from advertising. Affiliates are beginning to discover they have little to gain and a lot to lose by dealing with infringing tubes sites. The tube sites destroy the value of the very content the affiliates are trying to sell. To minimize the impact of illegitimate adult tube sites, studios must stop doing business with them, including doing business with them through their licensees and affiliates. Advertisers are limited both in variety and in raw numbers. You won’t find Proctor & Gamble, Ford or Apple advertising on any adult tube site. Those who do advertise (most frequently dating sites) rely on a somewhat symbiotic relationship with the adult industry. If these advertisers value the relationships they have with the studios they have to stop advertising on piracy sites.

If the tube sites face litigation on one side and a decreasing revenue base on the other, their relevance and the damage they do can be contained.

Unfortunately, there are other piracy models which remain largely ignored by the industry. The most insidious of them is one-click hosting. Here is how it works. The pirate rips a movie, usually breaking it up into a series of small files. He then uploads those files to a one-click hosting site such as RapidShare, Megaupload or Easy Share. The hosting company automatically assigns each file a unique URL which points to the file’s exact storage location. The hosting company does not index the files, there are no search functions, and users cannot browse files. To download a file, you must first locate it using the unique URL. The pirates distribute the URLs through blogs, user or social networking groups.

This arrangement has advantages and disadvantages. The process is more cumbersome than a tube site. Individual files must be stitched back together in an awkward process requiring additional software. If one segment is missing or corrupted, the movie won’t play at all. However, once the movie is downloaded, the end user has a complete, full-resolution version of the entire movie.

This piracy model is somewhat more difficult to battle. The one-click hosting sites (used for storage) and the blogs or user group sites (used for distribution) tend to be DMCA compliant, making legal challenges difficult. As a general rule, the one-click hosting sites do not rely on advertising for revenue. End users can download a small amount of material for free, but must pay a low monthly fee if they wish to download with few, if any, limitations. Although the blogs and user group sites sometimes rely on advertising, the advertisements usually do not appear on the same pages as explicit content making the advertising base broader.

Litigation against individuals may be the only solution to this type of piracy. Unfortunately, this raises philosophical questions regarding suing prospective customers and potential public relations issues like those the RIAA experienced.

There are many other types of piracy. Individuals use platforms such as ning.com or grou.ps to develop social networking groups specifically designed for trading infringing adult content. These sites control membership which reduces the amount of piracy, but makes the piracy more difficult to locate and combat. Individuals also trade video files or one-click hosting links through user groups operated by Yahoo!, MSN, Google and others. Peer-to-peer (P2P) networks allow infringing files to reside on the computers of a large number of users who use software to locate and copy the files (e.g. eDonkey, Gnutella, or FastTrack). Bit Torrents has its own unique legal and technological issues. Other infringers rip disks and sell them in brick and mortar locations such as video stores or flea markets, or on-line through eBay.com, NaughtyBids.com, or craigslist.org.

Studios in collaboration with the larger adult film industry must carefully consider how to deal with each type of infringement, bearing in mind that there is no single solution. Establishing a multifaceted anti-piracy strategy will help the adult film industry thrive and prevent more content producers from closing their doors for good.

D. Gill Sperlein practices law in San Francisco and serves as general counsel for Titan Media.


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