Music came first, but now the movie business is facing its own Internet challenge. Hollywood had a few years of breathing room because a movie is such a hefty bag of digital bits that it used to take several hours, if not most of a day or night, to download a film.
Dan Glickman, the president of the Motion Picture Association of America, is battling online piracy.
Not anymore. Ever-faster networks mean that a movie can be delivered online today in an hour or two, so the Internet traffic in films, illegally distributed, is starting to take off. In fact, the same day the latest "Star Wars" movie opened in theaters last month an online version was posted on a file-sharing site - before being shut down in a federal raid a few days later.
Little wonder, then, that Dan Glickman, the new field general in Hollywood's battle against piracy, is awaiting the Supreme Court ruling in MGM v. Grokster, a decision that could come as early as Monday. The case is the latest conflict in years of legal attacks by the music industry against file-sharing systems like Grokster and Kazaa and their users. The court's decision could define the reach of copyright in the Internet era and the liability of file-sharing services. Its impact will be felt equally by the movie industry and the music business.
But whatever the outcome, Mr. Glickman, the president of the Motion Picture Association of America, has no intention of easing up in his campaign against online movie piracy. Tactics may change, he says, but not the strategy.
And a tough-minded strategy it is. In his first nine months, Mr. Glickman has strengthened the trade association's lobbying presence, added to its public education programs and filed numerous enforcement actions, including lawsuits against individuals who illegally download and trade movies. "The Grokster ruling, however it goes, will not affect those actions," he explained this week.
Eventually, movies will be widely distributed online. Navigating that transition will require deft strategies and cooperation among the studios. The industry must offer appealing, legal alternatives to piracy. Already, people are watching more films at home than in theaters, and that has contributed to the boom in sales of DVD's, which routinely generate more than twice the revenue of box- office ticket sales for a movie.
The studios want to make the shift to digital distribution of movies into homes without cannibalizing their financial lifeblood, the rich DVD revenue stream. To do that, the Hollywood companies must find common ground not only with one another but also with Silicon Valley companies because of some thorny technical issues, like developing the computing keys to protect digital movies from theft.
Those business and technical matters, though, are for industry executives and engineers. The mission of Mr. Glickman's trade group is to tilt the legal climate and public opinion as much in Hollywood's favor as possible - to influence legislation, law enforcement and people's attitudes so that illicitly sharing copyrighted movies becomes more risky and less acceptable behavior.
Mr. Glickman, 60, succeeded the colorful, charismatic Jack Valenti, who was the face of the motion picture association for 38 years. With his cowboy boots, bouffant white hair and elegant tailoring, Mr. Valenti, both charming and combative, had style and swagger, as if a latter-day James Cagney was cast as a lobbyist.
Balding and genial, Mr. Glickman has no star-quality aura. A former Democratic congressman from Kansas and secretary of agriculture in the Clinton administration, Mr. Glickman came to the Hollywood lobbying post from Harvard, where he led the Institute of Politics at the John F. Kennedy School of Government. Besides having a fondness for movies ("Sideways," "Million Dollar Baby" and "Napoleon Dynamite" are recent favorites), his most apparent previous connection to Hollywood was his son, Jonathan, who is a producer at Spyglass Entertainment.
Mostly, Mr. Glickman seems a more cerebral leader for more complicated times, when the seven major studios have become global, high-tech conglomerates.
But Mr. Glickman has moved the trade association with somewhat surprising speed and force in certain areas, notably enforcement. During his tenure, Mr. Valenti held out the threat of suing individuals for copyright infringement, but he never took that step, which can be portrayed as dragging customers into court. But Mr. Glickman pushed ahead with a flurry of suits against some 200 people, with the latest filed last month.
"We have to send the signal that we will not tolerate illegal activity," he said. "And our actions do motivate the government to take steps."
The group is working closely with law enforcement agencies, especially to pursue Web sites that are high-volume distributors of pirated movies. One of the biggest such sites, Elite Torrents, was shut down last month, a few days after it had posted "Star Wars Episode III: Revenge of the Sith."
The raid was conducted by a multiagency task force, including the Justice Department and Immigration and Customs Enforcement, as well as the local police in San Diego. The Elite Torrents site had been visited by more than 100,000 users a day. Such sites use the latest generation of file-sharing software, called BitTorrent, which quickens the download time for large files.
" 'Star Wars' gave immediacy and sex appeal to the case, but that investigation had been going on for months," said John G. Malcolm, a former senior Justice Department official, who last year became senior vice president for antipiracy at the motion picture association.
Of course, enforcement is a constant cat-and-mouse game for the industry. Shutting down a file-sharing site removes only one path to a pirated movie. "Star Wars" is available elsewhere.
File-sharing software itself is merely a tool. But sites and file-sharing services invite legal trouble if they knowingly post, encourage or profit from file sharing of copyrighted movies, songs or other material. That is the issue in the Grokster case, whether it should be liable for copyright infringement or whether it should not because there are enough legal uses for the Grokster service like distributing free software. A federal appeals court ruled in favor of Grokster, but the film and music companies have brought the case to the Supreme Court.
Movie piracy is mainly propagated through the use of illegal DVD's and tapes, which cost the film industry $3.5 billion last year, the trade group estimates. That number does not include online piracy. "It's a relatively new and emerging threat," Mr. Malcolm said. "The trend is frightening."
In the last year alone, the number of computer files of feature films posted on file-sharing sites has more than doubled, to 44 million in May, according to BigChampagne, a research firm that specializes in file-sharing networks.
The most frequently posted and downloaded movies tend to be recent popular movies, often before they have been released on DVD's.
Downloading movies is still time-consuming and not yet a mainstream activity - feature films account for about 2 percent of the offerings on file-sharing services - mainly because a digital movie file is hundreds of times as large as a song.
But steady improvement in broadband network speeds will change that, and Hollywood looks to the experience of the music industry as a glimpse of a future it hopes to avoid. Industry experts debate how much online piracy contributed to the abrupt falloff in music sales starting in 1999, after the arrival of Napster, an early file-sharing system.
The movie industry seems to have little doubt that online theft played a big role in the 18 percent decline in global music sales, to $32 billion in 2003 from $38.7 billion in 1999. The music industry reacted slowly, then filed suits against file-sharing services, and sales did not pick up again until 2004, after attractive, legal downloading alternatives emerged, most notably from Apple but also from RealNetworks and others.
"In the movie industry, we have to get ahead of the curve," Mr. Glickman said. "There is no reason why what happened in the record industry couldn't happen in the movie industry."
Many industry executives recognize the looming problem. "Faced with a technology disruption, you can either fight it and treat it like a threat or look at it as an opportunity and try to develop new businesses," observed Mitch Singer, executive vice president for digital policy at Sony Pictures.
Yet the movie industry, some analysts say, is too intent on fighting these days. "It's a real mistake to focus on suing people so much instead of moving with the technology into the future," said Harold L. Vogel, an independent media analyst.
Hollywood is experimenting with Internet downloading services that charge a few dollars a movie or charge a monthly subscription fee like Movielink, CinemaNow and Starz on RealNetworks. Still, these seem half-hearted efforts so far with a selection that is far more limited than at a neighborhood Blockbuster store or Netflix, the popular mail-order movie rental service.
"My advice to Hollywood is to really start selling online," said Bram Cohen, the 29-year-old programmer who created the BitTorrent software. "They have nothing that vaguely competes with Netflix."
Netflix is investing in developing online distribution technology. The biggest obstacle, said Neil Hunt, its chief product officer, is that it cannot obtain the electronic rights from Hollywood to offer anything like its 45,000-title library of DVD's. "The goal of the studios is to preserve the DVD revenue stream," he said.
Hollywood's leading lobbyist understands the challenge. "It's not enough just to sue," Mr. Glickman said. "The industry has to develop hassle-free, reasonable-cost ways to offer movies over the Internet."
