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November 1st: Torsten Jacobi, CEO of Creative Weblogging, joins host Anita Campbell. Sponsored by Six Disciplines. Show details.
Sunday, February 29, 2004
Film Piracy Threatens Small Businesses
When films are pirated and sold illegally, it hurts businesses of all sizes, large and small.

It may seem like that new hit film you enjoyed is the product of some large behemoth studio. But an entire ecosystem of small businesses is involved in getting that popular hit film onto movie screens.

A recent New York Times article by Nick Madigan points out:
    "LISTEN to the Oscar thank-you speeches on Sunday night, and one thing will be immediately apparent: moviemaking is a process requiring many hands and minds.

    And while the studios setting those productions in motion are big businesses, most of the workers are provided by a galaxy of smaller ones.

    The number of these small independent contractors has risen as some large Hollywood studios have closed costume, special effects and other departments."
Counterfeit films have become a huge organized business worldwide. The cost to legitimate businesses is significant.

For instance, in the United States audiovisual piracy is estimated to have cost legitimate businesses at least $1.2 Billion (USD) between 1998 and 2002 -- not counting Internet piracy and theft of TV signals.

According to another source, in the United Kingdom counterfeiting cost legitimate manufacturing and leisure businesses over 8.5 billion pounds in 2002. And the European Union is fast becoming the destination of choice for counterfeit goods.

It's a growing problem that is only getting worse as technology makes it easier to copy and quickly distribute video.

A wide range of small businesses are threatened if the big studios are forced to make fewer films due to piracy. First you have all the small independent contractors involved in making a film. And as the Small Business Survival Council points out, there are all the small businesses involved in distributing that film and getting it into the hands of consumers. "Retail stores, theaters, independent artists, and countless other firms serving these industries and their employees all get hit."

Increasingly we see the trend in many industries toward an ecosystem of small businesses that depend on large businesses, and vice versa. Each supports the other's existence. So when something threatens the large players in an industry, often under the surface is a network of small businesses who are also threatened. That's the case with the film industry and piracy.
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