A loss for Popcorn Time is a win for creativity and innovation

Recently, the Motion Picture Association of America (MPAA) announced its role in enforcement actions against major online piracy actors Popcorntime.io, YTS, and YIFY. This is a major blow to the BitTorrent piracy cartel as Popcorn Time, the “Netflix for pirates,” was a major consumer-facing piracy platform, and YTS supplied the bulk of the stolen movie content used by Popcorn Time and many other peer-to-peer sites.

Bravo Hollywood!  The loss for Popcorn Time is a win for creativity and innovation.

{mosads}That piracy is harmful to content creators is well-established in academic literature, particularly the peer-reviewed variety. And importantly, piracy chills investment and innovation in legitimate online distribution services. Indeed, Netflix recently warned in a shareholder letter that “[p]iracy continues to be one of our biggest competitors…. Popcorn Time’s sharp rise relative to Netflix and HBO in the Netherlands, for example, is sobering.” And as Spotify enters Asian markets they have also identified piracy as a major challenge. Per Spotify Asia Director Sunita Kaur in a July 2014 article in “The Next Web,” “[piracy is] the one point that takes up the most time and is the most on our mind… It’s a lot of education. And it’s wonderful to see governments getting involved.”

While press coverage of the Popcorn Time enforcement actions has been even-handed, unfortunately not everyone can see the virtue of putting thieves out of business. For instance, Matt Hickey, a Forbes contributor, stated:

If the MPAA spent as much time and money working together to make a decent unified digital distribution platform as it does pursuing and shuttering services that the public actually wants and uses then there would be far less casual piracy and, who knows, it might actually make some money on downloads instead of spending it.

Hickey’s ignorance of the marketplace is disappointing. And his sentiments unfortunately track ill-informed comments made by Kim Dotcom (proprietor of the now shuttered piracy site Megaupload) in a recent Bloomberg interview:

Well, it’s quite simple. If you have a content platform, let’s say, that’s owned by all these different studios combined, and they will make their product available—the entire catalog, everything—at a fixed monthly fee, you know, for everyone to access around the world, working on every device, they would have the biggest Internet success in history.

If the studios colluded on a “decent unified digital distribution platform” they would be slapped with an anti-trust lawsuit before the first line of code could be written. If studios even coordinate theatrical release dates, so as not to pit blockbusters against each other, it’s an anti-trust violation. Ignoring the law seems problematic for someone with a bio that states,  “I’ll be talking about… where the Web meets the law.”

Moreover, Hollywood does make their content widely available online. Per the MPAA, there are over 400 legal online platforms where consumers can access video. And to help consumers make sense of all those options, MPAA launched the search tool wheretowatch.com.

The fatalistic and pessimistic argument that enforcement is futile is an old and bizarre impulsive response, particularly to those who are aware of the wonders of innovation, and those who believe that a competitive marketplace is best.  While actual creators and innovators never seem to raise the idea that they are giving up on protecting their property,  piracy apologists seem to be raising the worn out canard again. Fortunately, these arguments can be readily refuted, as Tom Giovanneti at IPI did in a recent blog:

[N]o one is arguing that enforcement is the only solution to online theft. Indeed, in the real world, rights holders are pursuing voluntary, market based solutions amongst good faith stakeholders to combat piracy. For instance, the five largest ISPs and the content community created the Copyright Alert System to educate users about infringing activity and help guide them to legal alternatives. And the advertising industry recently announced the formation of the Trustworthy Accountability Group, which will help advertisers ensure their valuable brands don’t appear on websites dedicated to theft, thereby helping to take the profit out of piracy while at the same time protecting their good names…. [And] even pirates admit enforcement regimes can be effective. In an ironic twist, just yesterday TorrentFreak published an article offering grudging admiration for the efficacy of site-blocking.

The legitimate marketplace for creative works has never been more vibrant. Legal distribution abounds. And there has never been more great content to watch. As such, enforcement actions that help ensure continued creativity and innovation should be celebrated. And unfair suggestions that Hollywood should conjure up illegal services should be abandoned.

Cleland is the managing director of Madery Bridge Associates, a public strategy firm.