Will a change in strategy mean a change in piracy?

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By Mark Mulready

The Video Entertainment landscape drastically changed throughout the past 12 months. Cinemas have been left derelict, with dust gathering on large screens and popcorn machines no longer popping like they once did. AMC, the world’s largest cinema chain, was on the verge of bankruptcy, the second-largest chain Regal Cinemas has suspended their operations at 500 locations, and even before COVID-19 disrupted our lives, cinema ticket sales were declining.

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With social-distancing measures not quite being enough for cinemas to re-open safely, HBO Max announced they would be partnering with Warner Brothers to release all of the 16 upcoming WB releases for 2021. Not only is this allowing for an increase in subscriptions to HBO Max, it allows releases to go ahead whilst evolving to a more consumer-orientated viewing experience – watching films at home, a safer, more cost-effective way of escaping reality. However, WarnerMedia has confirmed that it will return to cinema-first movie releases from 2022.

Open questions

Still, this leaves several questions unanswered and many worried about this alternative path to curb consumers’ insatiable desire for more content. Cinema and Premium Video on Demand (PVoD) are here to stay as demand for original high-quality content continues to grow. Moving away from the one-size-fits-all strategy, movie studios will likely develop distribution and release strategies that will include both cinematic and digital releases to maximize revenue where possible.

What we do know is studios will need support in securing these titles before and during release, as new release strategies will require updated means of protection as video piracy continues to present itself in different forms – presenting an opportunity for Irdeto to provide award-winning content protection.

A simultaneous release could lead to lower cinema revenues as consumers choose to watch blockbuster titles from the comfort of their own home, a trend we were witnessing before COVID-19. However, direct-to-streaming releases are more exposed to piracy, and content owners face the risk of viewers searching online for free, pirated releases. Moreover, movie studios risk having their titles pirated around release day, which would have a severe impact on revenue.

Hollywood backs latest anti-piracy laws

At the end of 2020, U.S. Congress passed the spending bill, with the legislation package including several copyright-related changes. Amongst these changes was a new plan to criminalize streaming piracy services. With Hollywood being onboard with the changes, this bill specifically makes it unlawful ‘to provide a service that’s primarily designed to show copyright-infringing content, has no significant commercial purpose other than piracy, or is intentionally marketed to promote streaming piracy’. With this new bill in place, US law enforcement can target and shutdown commercial streaming piracy services.

Recovering lost revenue

There are hopes that this will influence an increase of around 10% in revenue for the industry, once illegal activity is stemmed.

If studios realize that there is more money to be made via streaming (no revenue sharing with cinemas, augmenting their streaming subscriber base), they will have a stronger incentive to ensure all piracy opportunities are plugged and will need to closely track and measure emerging and existing piracy threats. Technology suppliers like Irdeto can provide services and solutions in support of studios as they experiment with new windows and PVoD. We will surely follow closely how the movie distribution and release strategies develop in the near future.

Mark Mulready leads the strategic direction, global delivery and management of Irdeto’s Cybersecurity Services for sports rights owners, broadcasters/operators, games publishers and other verticals. In addition to managing a global team of analysts, investigators and product management experts, Mark oversees the marketing activities for the Irdeto Cybersecurity Services team.

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