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Study: Most movies leaked on Net tied to biz

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LOS ANGELES (Hollywood Reporter) -- Pirating movies for distribution on the Internet is mostly an inside job. That is the conclusion of a new study that found that 77 percent of all popular movies being illegally traded over the Internet initially came from people who worked inside the movie industry.

Screeners are certainly one source of insider leaks, but they are hardly the only source. The report found numerous weak links where security is lax throughout the production-distribution pipeline.

In particular, it cited such other weak spots as audio and visual editing rooms, outside effects houses and outsourced postproduction. Once films are finished, marketing and distribution offer other opportunities for insiders to leak films.

"The sheer number of people involved at this stage considerably complicated content security," the report said. "Many studio employees have access to the final version."

Other professionals who work outside the studios also have access to finished films before they are released theatrically; they include personnel in marketing, advertising, the media and cinema projectionists.

The study cites Universal Pictures' "The Hulk" as one example. It began circulating on the Internet two weeks before its June 20 theatrical release date in a copy that contained incomplete special effects and other elements.

Ultimately, the studio discovered that the source for the illegal copy of the film was a friend of an employee at a print advertising firm that was promoting the movie. The study arrives as the film industry is embroiled in a controversy over the MPAA's screener ban.

"The data does show that the screener copies are contributing to Internet piracy," said Patrick McDaniel, a researcher at AT&T Labs. "But it's important to know that the ban is not going to solve the whole problem, and we have no way of knowing how much it will help."

McDaniel said it was not possible to break down the relative importance of the different links in the chain. Figures supplied by the MPAA report that last year, its member companies and their subsidiaries sent out copies of 68 titles for awards consideration.

Of these, the associations' investigators tracked the source of pirated copies directly to screener copies for 34 films.

"We know that awards screeners are in fact a source of piracy, and the screener ban was implemented solely to help prevent that," MPAA spokeswoman Marta Grutka said.

The copying of commercial DVDs accounted for a relatively insignificant amount of the illegal films, the study found, as only 5 percent of the movies first appeared online after their corresponding DVDs were released.

While some titles appear online weeks before they are released theatrically, on average, the movies first appeared on the Internet 100 days after their theatrical release and 83 days before their DVD release.

Universal Pictures was the hardest-hit studio during the research period, which covered 18 months beginning in January 2002. Fifteen of Universal's 18 releases were pirated. Warner Bros. Pictures came in second, with 78 percent of its 37 movies turning up for downloading.

Only Sony Pictures Classics came out unscathed as none of its seven releases appeared online. The study also charted the length of time between a film appearing online and its release date. Noticeable spikes in the availability of illegal titles occur during the week before and the week of theatrical release and in the month before the commercial DVD release.

McDaniels said this information could be a valuable clue for pinning down the sources. AT&T Labs' findings were reported in "Analysis of Security Vulnerabilities in the Movie Production and Distribution Process," a paper written by McDaniel and his teammates Simon

Byers, Lorrie Cranor and Dave Kormann.

Their work began by listing the 419 movies that had reached the top 50 with the highest box office yield during the 18 months from January 1, 2002-June 30, 2003. They eliminated those that were released or screened outside of the United States before their U.S. release.

Of the remaining 312 movies, they found 183 of them being illegally traded online. The researchers then determined what date the movie first appeared on the network, which they did by combing one of the main piracy hubs known as a content verification site.

Those sites, as described by the study, act as indexes and provide information including file names, date of uploading, quality and a unique file identification. Then they downloaded a representative segment of each movie. A checklist of criteria was used to determine the source of the films.

Some of the signs the team said indicated "insider sources" include a DVD-quality copy posted before the commercial DVD was available to the public, visible timecodes, the inclusion of watermarking and text reading "property of" studio or "for your consideration." McDaniel said several of the online films also had sound artifacts or editing-room artifacts, like a version of "The Rookie" in which the boom mike could still be seen.

Other movies showed a characteristic combination of poor visual quality but excellent audio quality. McDaniel said this was typical of a projectionist copying the movie from an unused booth window with a digital video camera but getting the sound from a direct jack into the theater's system.

McDaniel added that the research limited itself to one file-swapping network and one content verification site, both of which he said were widely known and used internationally, to ensure that their work could be replicated by other researchers.

"So the problem could be even wider than we show because there are other networks," he said.

The MPAA, however, said the use of only one content verification site was a flaw in the methodology.

"By doing that, they in effect minimized the impact of camcorder recordings on this problem because most of those sites eliminate the poorest-quality copies," Grutka said. "This could have the effect of exaggerating the percentage of higher-quality films."

The research report ends with recommendations for how the entertainment industry could improve the current situation. It recommended specialized players or extensive digital rights management systems, but these remain expensive and are not yet practical.

"There are some very inexpensive things that can be done and in the near term, but it would require some cultural changes," McDaniel said. "Basically, the industry has to handle material as the millions of dollars of investment it is."

The industry first needs to establish a chain of custody, such as is used to keep track of important legal documents and automotive design development plans, he argued.

"We want to help the movie industry understand what their problems are, and our study supported that the industry had to look at their internal processes to help mitigate these emerging problems with Internet piracy," McDaniel said. "There are a lot of emotional arguments out there. The more information we get, the sooner we can get past these problems."

Copyright 2003 Reuters. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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