`Ray' helmer Taylor Hackford tells a senate subcommittee Wednesday that piracy threatens to undermine film financing.
By WILLIAM TRIPLETT for Variety

WASHINGTON -- The film industry will be destroyed if rampant piracy goes unchecked, "Ray" helmer Taylor HackfordTaylor Hackford told a Senate subcommittee hearing Wednesday.

In particular, pirated DVDs threaten the livelihood of thousands of behind-the-camera workers as well as the future prospects of securing financing, which is already extremely difficult, he said.

The Senate Judiciary Subcommittee on Intellectual Property hearing focused on piracy in general, though problems in China and Russia dominated the discussion. Several witnesses who testified reiterated points they made in a similar hearing last week before a House subcommittee --- that piracy in those countries is widespread and rapidly becoming institutionalized.

But while House subcommittee members unsuccessfully pressed an official from the White House Office of the U.S. Trade Representative to specify when the Bush administration would take concrete actions against China and Russia, Senate subcommittee chairman Orrin Hatch (R-Utah) warned the administration that it must do more or it would lose his unqualified support on free trade.

Hatch described the testimony of the six witnesses who spoke as "stark," with some of the most graphic coming from Hackford.

The majority of film industry jobs are not onscreen and many artists and technicians "are freelance," he said. "We do not get a steady check." That's why residual payments -- monies from markets following theatrical release, such as television broadcast of a movie, or a DVD version -- are crucial to industry workers. "These go toward our health and pension plans," Hackford said.

DVD sales and rentalsrentals far exceed domestic theatrical box office and account for more than 60% of studio revenues. "DVDs are the main source of revenue for the future," Hackford said. Moreover, 55% of film revenues come from overseas, he continued, and most DVD piracy is occurring overseas. Hence, piracy erodes the major source of residuals and the most bankable assurance for investors.

"Fewer films will get made" because investors will be less willing to take a chance on a movie, Hackford told Daily Variety after testifying. "Piracy will mean a loss of jobs and it will be devastating to the economy."

China's import limitations effectively promote a market for pirated movies, USTR general counsel James Mendenhall testified. "China puts a cap on the number of movies it allows in every year," creating a huge demand for the movies that don't get in, he said.

Hatch, a longtime champion of intellectual property rights and a staunch supporter of free trade, said he would seek trade sanctions against Russia and China if the administration didn't start getting tough with the two countries on intellectual property.

"I might as well warn the administration now," he said. "Unless it demands that China and Russia start abiding by international (intellectual property) norms, it's going to lose a very strong free trade advocate in me."

Mendenhall said the administration is closely watching developments and will pursue "possible (World Trade Organization) measures" if China and Russia don't show significant improvement in intellectual property protection.

All this on a ruling in canada +china's piracy threat.

Another thing to note that cutting off sales of imports/exports will cause further damage and greater cause for counterfit products to be sold. (no market = "pirate" your own)

This comming from the lap dogs who also pushed for region restricitons on dvd's.

The tangled web of deception finally trips them up.. but i doubt hatch is actually competent enough to pay attention.

If theyre complaining about import/export barriers hindering their sales then they should REMOVE REGION CODES!

"DVD sales and rentalsrentals far exceed domestic theatrical box office and account for more than 60% of studio revenues. "DVDs are the main source of revenue for the future," Hackford said. Moreover, 55% of film revenues come from overseas, he continued, and most DVD piracy is occurring overseas. Hence, piracy erodes the major source of residuals and the most bankable assurance for investors."

Geezuz.."sales", "revenue", "residuals", "bankable assurance", "investors'......the language of greed. These people should not have any connection to anything artistic. They are whats killing it.

"...as well as the future prospects of securing financing, which is already extremely difficult, he said."

At a seven to eight figure price tag for each movie I would think that's incentive enough to not want to fork over money

ATTN: Mr. Hackford, and Dishonorable Mr. Hatch

1) The inherent nature of the Internet is P2P, what's yours, is mine.

2) For you to win, you would have to literally SHUT DOWN the entire Internet infrastructure worldwide, effectively crippling the world economy, among innumerable other things.

3) Your relentless war against technology will only drive it further underground, making it even more impossible for you to stop what you have so blindly come to believe is a genuine threat.

4) You WILL lose this battle because people will move to heavily encrypted communications, uncrackable by even the hellbent, conscripted (by the RIAA and MPAA) FBI, DHS, AG's and people will still continue to do what we believe is right and not unlawful.

5) You CANNOT make encryption illegal or other methods of protecting privacy, because then you will open the door WIDE open for REAL criminal activity, which has been publicly on the news and is one of the major problems government law enforcement is already facing; like mass Identify Fraud (not theft, because you can't "steal" identity anymore than any other form of digital data), online scam artists, credit card fraud, not to mention blatant violation of Freedom of Speech.

6) There's enough legacy hardware out there (and will continue to be) for you to remain thoroughly fucked in all your endeavors for the next 20 years should you DRM the fuck out of everything, and during these egregious times, there will ALWAYS be plenty of hackers defeating the poison you inject into our media, hardware, making your efforts even more ridiculously, pathetically in vain.

7) To WIN your so-called war on "piracy" SIX things must happen: i) Stop CREATING the incentive for people to not pay for copyrighted works by lowering prices dramatically, ii) Stop Suing people, suing creates an inevitable sense of righteous indignation against Hollywood and causes more people to download whatever the hell they want. iii) For the RIAA, start PAYING the artists at least 50% of the revenue from CD's so that people won't feel so much that you are stealing from the musician, giving them less incentive to obtain your content at no charge, because we genuinely understand that Hollywood perpetually is involved in "legalized extortion".

iv) Stop using DRM on everything, triggering the natural response of human nature to be FREE, motivating people to bypass your DRM and disable it ONLY because we want to continue to have, and DO HAVE, THE RIGHT to do what we want with OUR OWN PURCHASES.

DRM's effect is no different than if I buy a handgun for self-defense, and someone breaks into my home, and is armed themselves and tries to shoot me, and the gun prevents me from shooting because it's DRM'd, and needs to contact the local police via RFID to ask for permission if Im allowed to defend myself in my own home, whilst in the mean time I get killed waiting for the trigger to unlock.

v.) Offer DRM free full or partial downloads (fully customizable without restriction), like allofmp3.com (at their prices), of pure .WAV files and files in FLAC format, so that we, the consumers are free to use them as we see fit, period.

vi.) Stop fucking lobbying trying to get technology destroyed (destroyed = conformed to the way you want it, effectively destroying the way WE want to use it).

There are approximately 500,000 illegal immigrants entering the United States of America every year, and the illegal immigrants that come here that are not from Mexico, but come from Guam, Japan, the Phillippines, that nonetheless come across the Mexican border are NOT returned to Mexico, they get stuck here, in the U.S.

How many of these people are filling our jails, that have committed crimes, and we, the American taxpayers have to pay for not only someone being in our prison system, over $30,000 a year, but paying for an illegal immigrant to stay in our country.

You have the fucking time to worry about so-called piracy, and you could give a flying fuck about this huge, REAL problem that is REALLY damaging the U.S. economy. But I see, you will get votes from Hollywood by making efforts on behalf of their whims, and campaign contributions. Dealing with the aforementioned real problem will gain you no money, and will cause you to lose votes in the United States, nevermind that it is the right thing to do and would truly help the U.S.

Finally, how dare both of you (and others) threaten and strongarm other countries, showing ZERO respect or regard for their Sovereignity.

I hope that China and Russia put you on their entertainment threat award lists ala Anakata style (from thepiratebay.org) and recommend to you that you sodomize yourself with Concertina Wire, and if thats not enough maybe try a 21" baton shaped out of dry ice dipped in hydroflouric acid.

"Director Claims Economic Damage"

Hatch Claims Director Claims Economic Damage, Maybe, Sort of, Sometime in the Future.

If it was true forget about the movie industry. But he is wrong. However and hopefully we can kill the 7 major movies companies by attacking their interest by any mean.

P2P can not be controlled no more than the tide or the earth quake!

I scanned this article twice, and it appears to me they are talking about copying and selling for profit, not p2p. I have no beef with the government stopping people making money from another man's product by selling unauthorized DVD copies. Anyway, this article, if it belongs anywhere, belongs over at boycott-mpaa.

Hatch & Hackford. Fitting names.

Oh, but if piracy does mean fewer films will be made, then why do I think that is a good thing? I have seen so much crap in the past year on DVD -- stuff that is highly acclaimed, but I find it mediocre at best. I think Hollywood should just take a year off making any films at all and brainstorm on some good scripts. They wonder why box office is down? It's because the movies are pathetic!

Article shold be on Boycott-MPAA Tom....

BTW...Printable Quote from Code on this...
"Ain't no such thing as damn piracy on the land."

The entertainment industry should not be dictating foreign economic policy. Or any foreign policy for that matter. Sheesh, that should be a no brainer.

"DVDs are the main source of revenue for the future," Hackford said.

Revenue streams flow and rvenue streams dry up. Thw hwole point is that the revenue used to all flow from theatrical and things changed. They are arguing for things to stay the same. This will never happen and the effort o try and make it so will bring destruction.

"DVDs are the main source of revenue for the future,"

show's how behind the times they are. electronic digital transfer is the main source of revenue if they will embrace it

Amen, TrueAudio. Only one thing, though: Guam is part of the US so there are no illegal immigrants coming from there. They just work for cheap, is all.

From Autodidact: "They wonder why box office is down? It's because the movies are pathetic!"

I think part of it is mediocre films, but also DVD rentals and theater prices. When you go to the movies you don't just buy the tickets, if you want ANY snacks they will not allow you to bring them in, you are forced to buy them. And everyone knows how high those concession prices are!!! People are thinking twice now. They know they can rent it in a month and save a few bucks. That's especially true for some movie that isn't worth $9.50 per person.

we still sneak our snacks in. though we've never been caught. I wonder how that would hold up in court though? could a restaurant prevent you from bringing food in to eat with your meal? interesting question.

Why doesn't Hatch just blow up file sharers computers. haha.

"could a restaurant prevent you from bringing food in to eat with your meal?"

They can prevent you from going in at all if you're not "appropriately attired," which I've seen range from the insistence on a jacket and tie, all the way to the other extreme, wherein if you enter wearing a tie they will cut it off.

There are also probably health code issues when outside food is brought into an establishment, but most places have a sign that says, "We reserve the right to refuse service to anyone."

TCPA will be the way for idiots like the MPAA and RIAA to finally make the biggest move against piracy they can at this stage (www.againsttcpa.com).

There will be ways around TCPA (ex. modchips), but it will take away some of the less 'hardcore' pirates. These people will either not know enough about computers to get around it, or do something stupid like telling people about what they have. It will be much harder for p2p networks to survive, and some will just give up. Pirates will be forced further underground, and the regular Joe will have a much harder time joining them. Linux will probably be ‘the way of the pirate’ in the next few years… In my opinion…

To RabidFish :

Will this TCPA prevent me from filming my own home movies using my digital camcorder and sharing them? Prohibiting that would cause a major customer setback. And then we just have clasic "Crack once use everywhere" situation. People, who are smart enough to crack it, will just convert so that it looks like a home-made movie. And then they can share it at will. There are not so many people who rip something and then share. Most just download...
It will probably prevent an average user from immediately sharing something he downloaded from some legal content providers. But not much more...