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Piracy Conference Could Be the Start of Something Big

By Mark Kernes

Over 60 Adult Producers Gather for Roundtable Meeting

PORN VALLEY – It started with a simple announcement from A1R3K of Shane's World on the GFY discussion board: "PIRACY ROUNDTABLE ANNOUNCEMENT to be held at SHERATON UNIVERSAL in UNIVERSAL CITY. Same place where webmaster access is held. SEPTEMBER 5th, 7pm - BALLROOM inside the Hotel."

"It's not like we're trying to make a Shane's World Anti-Piracy thing," noted Megan Stokes, VP of DVD Sales for Shane's World. "It's just, we have a lot of friends in the business, and we were sitting around bitching about piracy, and we were listening to our other friends in the industry sitting around bitching about piracy, and nobody was really doing anything, so we just decided to find a room and pay for that and get a moderator and food and drinks and all that stuff and just be able to provide the facility for something like this to come about."

And indeed, about 65 content producers, attorneys and other interested parties (press was excluded) showed up for what became nearly a three-hour discussion of, according to attendees who spoke afterwards, what could be done about the rampant piracy of adult content both over the Internet and as counterfeit DVDs.

"What I'm getting out of this is that this is so pervasive," said director Andrew Blake of Studio A Entertainment during a break, "and we all kind of laughed when they came for the record industry – 'Eh, couldn't touch us' – but here it is, a lot of people on the verge of extinction almost, from a business point of view."

"People are genuinely pissed off," added Wit Maverick of Adam & Eve, "and the changing climate of the whole VOD market is really what's scaring everybody; they're so easy to pirate."

"Basically, what it was was, I think, the first true meeting of producers and counsel for the producers," summarized attorney Greg Piccionelli, who spoke at the meeting, "to take steps to finally do something about the rampant piracy that is eating away like a cancer against the industry, and there was a lot of discussion about the causes."

Several figures estimating the extent of piracy of adult material were mentioned at the meeting, and the consensus seemed to be that piracy accounted for about a $2 billion loss from the estimated $50 billion gross income from adult material worldwide, but Piccionelli disagreed with that estimate.

"At the present time, if you were to take all of the content that is produced by the adult business," Piccionelli stated, "the legitimate sales currently account for no more than 15% to 20% of the actual numbers of copies that are out there, and the lack of enforcement over the years has left the pirates and consumers with the impression that copying and stealing adult content is something that has absolutely no punitive consequence associated with it whatsoever, and so the industry has really sort of dug its own grave to this degree."

While not agreeing that the industry has been hit that hard yet, Stokes expressed fear that worse days are coming.

"I would say in the next couple of years, the average porn buyer is what? Between 18 to 35?" Stokes asked rhetorically. "As the younger people who know exactly how to do this [download content] keep coming further and further into our bracket, I would suspect that within the next five years, there's not going to be anybody that we're trying to sell product to that doesn't know how to download it for free."

According to comments from several attendees, the group seemed to be divided between those who were looking for ways to stop the piracy while still maintaining the current methods of content distribution and sales, and those who believed that advancing technology is changing the entire face of distribution of adult material, and that industry entrepreneurs had better learn to "go with the flow" and turn it to their advantage.

"We all know the problems; we all know the costs," said Maverick. "What I think we're all here to find out about is, are there any real options? Are there any real solutions that we can actively engage in? It's got to be different than what's happened in the past. I worry about them coming up with DRM [digital rights management] or technological solutions, because they're not going to work."

As Piccionelli sees it, one of the problems facing those who want to impact piracy is the Digital Millennium Copyright Act (DMCA), which Congress passed in the late '90s to protect intellectual property, but which had some major loopholes for Internet service providers (ISPs).

"I think the DMCA is heavily flawed," he said. "I participated in terms of comments that went into the famous white paper that ultimately was the progenitor of the DMCA, and what I saw is – I looked at it as basically a collision between freedom of expression and the First Amendment, and the property rights that people have in intellectual property, and while I wholeheartedly agree that the Internet had to be allowed to flourish, my belief is that the problem is that the provisions in the DMCA that protect ISPs are so broad and at the same time so nebulous that what they would just about guarantee in the fullness of time, as the ability to use the Internet filtered down to the lowest common denominator of scum and villainy, is that it would totally eviscerate intellectual property rights on the Web."

But while few doubted how the piracy was being accomplished – these days, mainly by peer-to-peer (P2P) networks and bit-torrent sites for video clips – solutions to the problem were more difficult to arrive at.

There are several solutions, and they fall into several categories," Piccionelli detailed. "Basically, there's the category of creating an appropriate entity that would successfully prosecute cases, and then be identified with successful prosecution of cases, much like AICO in Australia. Whether that organization fits within the Free Speech Coalition or without the Free Speech Coalition was a matter of some debate with pros and cons on either side, but the creation of such an organization is something I'm very much in favor of because of the economics of the situation. It stands a much greater chance of actually successfully litigating against the evil-doers. Since the industry is so incestuous and so many people work with one another, people don't necessarily want to go suing someone that they have other relationships with, while at the same time they're being undermined by those very same parties. If a neutral party does, it, then they're the face. And it shields the various parties that are being damaged. We believe that there is a substantial amount of interest, especially now that what is finally beginning to happen is that virtually every producer of content now is feeling the pinch of this rampant piracy, and it's only got to get immeasurably worse as the technology improves."

AICO is Australia's Adult Industry Copyright Organisation, which describes itself as a not-for-profit entity that serves both to educate and to discourage breaches of copyright in adult films in that country. AICO is funded by both American adult video producers and Australian distributors.

"AICO aims to reduce the level of piracy of adult films in Australia," the AICO website proclaims. "We plan to achieve this through education, promotion and enforcement. To this end AICO has developed a unique AICO hologram sticker that will be found on all of its members' legitimate adult videos and DVDs. IF THIS STICKER IS NOT DISPLAYED IT IS LIKELY TO BE AN INFERIOR AND ILLEGAL PRODUCT."

At least two AICO representatives attended the meeting, and the possibility of applying AICO's methods in the U.S. apparently will be the subject of further discussion ... but Piccionelli had other ideas as well.

"My personal opinion is until we get to the era of quantum computers where you can have effective locks and keys, the industry simply has to learn how to deal with the new milieu," Piccionelli said, "and one of the ways of dealing with it is, for example, an iPod kind of situation, an iTunes kind of situation where you have scene sales at a low enough price that appropriately deters people from stealing it.

"Second is that what I've been saying for close to 10 years," he continued, "which is to pair piratable material with non-piratable material; giving away t-shirts, or even live upsells; giving away content to live upsells and there was even some mention of that. Some of the theories, though, that were dealt with are, for example, something that we at our firm have been doing for almost 10 years now, which is settling a lot of intellectual property cases by exploiting the fact that the infringers almost always have no records, and consequently, since many of our clients are in California, we're able to threaten or actually bring unfair competition actions based in part on 2257, and this is one of the ways to turn a really lousy lemon law into lemonade for the industry."

"What came out of it is," Stokes added, "we actually have a small group of content producers who are going to meet. We chose five content producers, video and Internet, and some do both, and we have gay and straight and I believe even someone who does transgender, and they're going to meet this week to continue our steps of action, and we have some legal representation as well. After this next meeting, they're going to decide the next step on how to get more studios involved because at this point, we're looking for people who also aggressively pursue this, and if we all do it together, we'll be able to make a lot bigger impact."

As Piccionelli sees it, adult's best tactic for stopping piracy is to ally itself, to the extent possible, with mainstream producers who share some of the same interests.

"This was something that was furthered by Allan Gelbard, Jeffrey Douglas and I, which is the fact that we have a rare possible synergy once again between a sort of common interest with mainstream, which is always the best place for adult to be," Piccionelli explained. "We have a commonality of interest in slowing down the piracy to the extent we can, but we also have an interest as well in keeping kids away from the material, and the fact is that the most egregious disseminators of adult content to children are the infringers. They don't care who they sell to, so they're sort of the parties that live off of illegal activity, so given the fact that there is this kind of identity, if we can rework the Digital Millennium Copyright Act to, for example, bring within its ambit some of the players that have been legally excluded by case precedent – for example, people who do the billing processing, people that have advertising on pages of known infringers – if we can clean that up, then we could take the economic motivation out of this type of infringement, and in doing so, by bringing the economics of it into the ambit of legitimate businesses, we stand a much better chance that kids will be excluded from it, and we think that we can probably carry that into the next administration. Certainly it's a hopeless case with the current administration, but in the next administration, regardless of who's there, but particularly of course if it's democratic."

But that's not all. Shane's World is establishing a website (http://www.antipiracyboard.com) where content producers can post screenshots of pirated material.

"It's for any kind of stolen content," Stokes noted, "because with the time-stamp and the screenshot, it's something that we can start using as evidence in court cases."

"The other thing we're trying to do with it is to educate people," she continued. "Part of the stuff we discussed is, we talk to people; there's a lot of people who don't know what a bit-torrent network is, and peer-to-peer file sharing and all of those things, so we also educated and talked about DVD encryption."

"I really think studio owners need to stop turning a blind eye," Stokes summarized. "This isn't going to go away, and just to sit and complain and do nothing doesn't solve anything, and at this point, in five years, because of this, there's a lot of people who are going to be disappearing from the business, if they don't take a proactive stance."

SOURCE: Adult Video News ( AVN )