Cyberlockers and Streaming - the New Piracy Threat

It used to be that movie studios feared illegal downloads... and in part they still do. After all, with uncertain revenues from theaters and the growing market of streaming media they are consistently unsure of how their business model may shake up in the next decade. Now they are facing a new problem: cheap, fast, and completely illegal subscription services. And these companies look and feel professional. The movies are stored in what's known as "Cyberlockers" - places where users can go to stream pirated movie content... for as little as $5/month!

According to an article on The Hollywood Reporter, foreign companies, apparently even mob-run ones, collect these illegally obtained movies and then operate for-profit websites that look reputable and sell almost unlimited digital movie files.

Fred Huntsberry, CEO of Paramount Pictures, detailed to industry professionals at the Cinema Expo the methods piracy pros are using to obtain and manipulate content for these Cyberlockers. Namely, they are going into theaters and capturing first-run movies with camcorders... Later, they are immediately updated with pristine quality copies once the DVD and Blu-ray versions are released. The problem is so pervasive and sophisticated that feature films are able to be made available just days after they are released in theaters. This isn't just an American problem either. Films are being systematically dubbed and configured for streaming into a myriad of languages within the first month of a theatrical debut.

These cyberlocker-style businesses are being run out of Russia, Ukraine, Colombia, Germany, Switzerland and elsewhere, yet several of them have been so legitimate-looking (and so well-run) that they have been able to sell online ads to such mainstream companies as Kentucky Fried Chicken and even, ironically, Netflix. Studios aren't sure what to do about the problem, but are cautioning consumers that participating in these ventures is likely to expose you to credit card scams and identity theft. Other than that they are forced to deal with the problem legally, using other countries' laws and copyright measures - something that is far easier to enforce domestically than abroad.

In the UK, a new law means that consumers caught downloading material will now receive an e-mail alert followed by formal letters. Those who persist in downloading and streaming copyright-protected material can have their Internet access revoked for a period of time. In France there is a law against using a camcorder in movie theaters - one of the only European states to do so.

This looks to be the start of a very intense and ongoing battle for the movie studios and one fight from which they aren't likely to back off.