Q&A with Daniel Castro on Digital Piracy
Published on February 9th, 2011 | by Cassady Dixon0
Thieves in the Daylight: An Interview on Digital Piracy in the Modern Age
Piracy of films and other forms of entertainment is very much analogous to the roving criminals in the waters off the coast of Somalia. Essentially, it’s a thief’s field day, and no end seems in sight. A recent study commissioned by NBCU confirmed that nearly 24% of all global Internet traffic has ties to copyright infringement. While this obviously hurts artists, it also adversely affects all others behind the creation of intellectual property, from technicians to craft services. Consumers are taxed as well by way of rising costs and/or a reduced quality of product. What’s more, little is being done to stamp out this activity.
One such organization leading the charge against piracy is the DC-based think tank Information Technology & Innovation Foundation. ITIF, described by Inc. Magazine as “scrupulously nonpartisan,” has compiled immense amounts of research and policy suggestions regarding this alarmingly undervalued issue. Their efforts have pointed to three key areas of importance in tackling piracy: blocking websites involved in infringement, restricting these sites’ access to financial transaction providers and ad networks, and by revving up innovation and implementation of content identification software. I sat down with Daniel Castro, a Senior Analyst at ITIF, to further discuss the matter.
Is digital piracy reserved for big budget fare such as “Avatar,” or are smaller, more art-house films victims as well?
The more popular movies are easier to find online, although if there is a DVD of the movie available for sale from Amazon, odds are you will be able to find a pirated copy online.
A relatively common argument in favor of piracy posits that, throughout the past century, various media have been viewed as a threat to the survival of the entertainment industry: radio would kill the music industry, television and, later, home VHS recording would topple the cinema, etc. What is the central flaw behind this way of thinking, and/or how is digital piracy more serious than these earlier issues?
The flaw in this argument is that in virtually every one of these instances government or technology has provided some kind of check on unfettered piracy. Legislation created statutory copyright royalties for radio (which are still being fought over today). VHS and cassette tape were great technologies for recording, but poor technologies for distributions—both in terms of cost and quality (analog copies degrade over time). We need to have appropriate controls in place to put restraints on digital piracy, and these will necessarily be different than those in the past because technology changes.
Why do you think the government has done so little to combat digital piracy?
Part of the problem is that they have not understood the scope of the problem. A report released at an ITIF event yesterday found that at least 1 in 4 bits on the Internet is infringing content. When the impact on bandwidth is this large, it is clear that digital piracy is not just a problem for the content industry, but for all Internet users.
What has positioned China to become the powerhouse that it is in terms of piracy?
China has shown a willingness to disregard the intellectual property rights of other countries and other countries (including the US) have done little to go after these violations of trade agreements.
How affective has Obama been with China in terms of piracy? Did President Hu’s recent state visit yield any promising steps forward?
That remains to be seen.
To the extent that digital piracy is combated, is it a bipartisan effort in Washington, or has one party gravitated towards the issue more than the other?
It is bipartisan. Red states and blue states are equally affected by piracy because one of America’s chief exports is intellectual property from Hollywood movies to Nashville recordings. And opposition to anti-piracy efforts makes strange bedfellows. We’ve seen both Tea Party Republicans and ACLU Democrats arguing against better law enforcement efforts to protect U.S. copyright owners online.
What would be some of the more obvious routes to combat piracy that are not being done, or done enough, as of yet?
There are a lot of people making a lot of money off of piracy. Cutting off their revenue by working with ad networks, financial transaction providers, and blocking access to these sites will make a serious dent on the profitability of running one of these piracy websites.
It may seem surprising to some that major brands such as Amazon.com, Sprint and British Airways have advertising on piracy websites. Does this actually make these companies complicit in criminal activity? Has any action been taken against these brands?
Most sites use ad networks for their advertising. Ad networks need to ensure that the sites displaying their content adhere to a strict terms of service that prohibit advertising on illegal websites, including those that support piracy.
How is it that so many sites that host torrent files are allowed to stay online, even after some are taken to court? Is blocking access to these sites easier said than done?
Yes. It takes only minutes to setup a new website, but it takes months or years to take a site to court to get it shut down. That is one reason why the government needs new law enforcement tools that allows it to act and react in “Internet time.”
You have mentioned piracy’s connections to terrorism. Are there any direct links that show which specific terrorist groups engage in piracy? Is their motive in this regard purely financial, or could these groups also be viewing piracy as an effective way to harm the United States and the West?
Interpol produced a report on this a while back. They testified of links between terrorists and IP-related crimes (i.e. counterfeit goods and pirated music and games) including with Hezbollah, Northern Ireland, Kosovo, Chechen separatists, North African radical fundamentalists and Al Qaeda (although this latter link was indirect). Certainly I would suspect that if a terrorist group is able to smuggle counterfeit goods in large quantities into the United States, then it poses a threat to national security.
Entertainment is going more and more to the purely digital. The window is closing on the time between a film’s release in the theater and on the home market. Netflix is slowly phasing out their physical DVD options in favor of streaming. Do you see this change as helpful or another hurdle in combating piracy?
One important point made by Dr. David Price who authored a recent study on the impact of piracy is that most illegal file downloaders do not see themselves as pirates. They see themselves as “fans” of a particular band, TV show or film. So when they download a new TV episode it is often because this is the easiest way to get it. To the extent that the industry continues to evolve so that consumers can gain access to affordable content in easy to use ways, this will hurt piracy. One good example of this comes from the music industry which recently decided to eliminate the hold they place between a radio release and when a single goes on sale. Most of the piracy took place during this window when the music was unavailable.