How Do You Lose Money On Movies Not Even Released?

from the just-curiouse dept

Fri, Dec 29th 2006 1:55pm — Mike Masnick

The movie studios are excited about a court ruling in China, saying that Chinese portal Sohu.com needs to pay damages for downloading versions of American movies on their portal. It's yet another in the "significant blows" they like to talk about, even though none of them actually appear to be significant. In this case, Sohu apparently had a subscription download service that offered unauthorized copies of movies. That is, clearly, illegal. However, the movie industry's claims that this type of piracy in China cost them $244 million last year is tempered by the fact that later on in the article they admit that a large part of the reason so many American movies are pirated in China is that the Chinese government has regulations in place that limit the number of US films that can be shown in the country. They even admit that half of the movies Sohu was distributing weren't even available in Chinese theaters due to these restrictions. In other words, they didn't actually lose any money at all on those films. It could even help them to have these films distributed this way, since it increases the demand for US movies, and could put more pressure on the government to allow more movies to come into the country legitimately.

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15 Comments

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DigitalBomb, 29 Dec 2006 @ 2:11pm

And this is the reason why both the United States movie industry and the Chinese government suck. Why does no one these days think? All companies do these days is yell "He took my movie!" to their court system. It's exactly the same as when 3 year old brothers take each other's toys and tell mom 'n dad.
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Chris, 29 Dec 2006 @ 2:44pm

huh
I thought China had those laws in place because they are trying to hold back the tsunami of western culture. I think the problem was American movies and such were becoming huge hits and Chinese movie studios, who do not have the crazy budgets like Hollywood, couldn't compete. I think the Simpsons has restrictions as to when it is allowed to be broadcast (aka not during prime time). I don't see China changing those laws just to make a few bucks, they are trying to save their culture, so the last sentence of this article is fantasy.
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Jim Gramze, 29 Dec 2006 @ 3:05pm

No Harm No Foul
I will never move from the following position: if no revenue was lost then there was no crime; ie, if the person would not have purchased the product without the opportunity to pirate then the piracy is not a crime because no revenue was lost. My definition, not the "law."

I live in Thailand. On TV, even on HBO, if a person puts an ancoholic drink up to their lips that drink is blurred out. If a person puts a cigarette to their mouth then that cigarette is blurred out. If a gun is pointed at someone then that gun is blurred out. If someone is killed, that moment is cut out.

People drink, smoke, and likely kill people all the time here. People will be people. The point in China, like here in Thailand, is that they don't want certain kinds of behavior modeled in the popular media -- at least the government doesn't.

Back to my original point, which is obvious as all get out, since the movies are not allowed in China there is no loss of revenue due to piracy. A sale could not have happened. The article correctly points out that this piracy, as piracy everywhere IMHO, is free advertising for the content providers.

The latest in marketing strategies would have companies freely give away their services to create good will and to show that what they have to offer is of value so that when a purchasing decision is made they will be seriously considered. People only have so much money to buy things with. They get necessities and what they want the most and then there is no more money to spend. If what is most desired is a music CD then that person will buy that CD, otherwise there is no money for it and it will not be purchased whether the person pirates it or not.

The whole piracy/harm thing is all smoke and mirrors.
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China Law Blog, 29 Dec 2006 @ 3:24pm

Chinese Court Damages
Good point re calculating the damages in this case. But since nobody can ever figure out how the Chinse courts calculate damages in any cases, none of it is probably relevant anyway.
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Tyshaun, 29 Dec 2006 @ 3:36pm

Thing is...
Sure, the basic logic does hold that if the movies were never going to be released in China that there was no damages, BUT, could people in a country where the movie was released have access to them too? In that case, it clearly could be considered piracy.
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Frink, 29 Dec 2006 @ 5:14pm

Re: Thing is...
What? You mean because I have access to those movies in the US then China can force the Chinese portal Sohu.com to pay damages for piracy of movies that are not available in China?

What?
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Juan Diego, 29 Dec 2006 @ 5:34pm

La piratería se convierte en delito en el momento en que alguien obtiene un beneficio económico por replicar y vender una obra que no es de su propiedad. Si el portal obtuvo beneficios, independientemente de dónde venga el dinero, si de China o de EEUU, debe pagarle derechos a los dueños de la obra.

Lo que es de risa es la cantidad de dinero que solicitan los estudios de cine, porque primero habría que determinar el monto de las ventas del portal, lo cual mi estimados amigos, está en chino.
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Tyshaun, 29 Dec 2006 @ 8:28pm

Re: Re: Thing is...
What? You mean because I have access to those movies in the US then China can force the Chinese portal Sohu.com to pay damages for piracy of movies that are not available in China?

What?

Uhh, yeah, it's called copyright laws. As much as techDirt authors and readers would like to think otherwise, it is still illegal to distribute copyrighted material without consent of the copyright owner. Most countries participate in international copyright protection.

I'm not saying I like the current system, but this is clearly a violation of EXISTING law and should be dilineated from theoretical discussions of how the law is wrong and should be changed to some socialist "let's all share everything" mentality. MPAA sued in Chinese courts a chinese company who was distributing their copyrighted materials without permission. The chinese agreed, what's the issue here?
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DigitalBomb, 29 Dec 2006 @ 11:36pm

People who uppercase the words they want to emphasize piss me off more than the Chinese government. We do not want to hear your annoying repetative cadence in our heads, so bugger off!
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curmudgeon, 29 Dec 2006 @ 11:54pm

Re: Re: Re: Thing is...
Tyshaun: I'm not sure it is *the* issue, but at least one of the points I think Mike was trying to make is that this story shows another example of the RIAA/MPAA making up fantasy values for how much they have lost due to unauthorized copying. If they aren't selling a title in China, then I find it hard to believe they can logically support the claim that an unauthorized copy that ends up in China represents any lost sale. Mike points out, and I agree, that, legally, they have the right to stop such distribution. But I think they shouldn't be allowed to get away with citing fantasy numbers for lost revenue.
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Tyshaun, 30 Dec 2006 @ 12:00am

Re:
People who uppercase the words they want to emphasize piss me off more than the Chinese government. We do not want to hear your annoying repetative cadence in our heads, so bugger off!

I capitalize one word and that's enough to "piss" you off, I would say anger management classes are in order for you. As per the "repetitive cadence", do you read techDirt articles a lot? It's like reading communist dogma sometimes, very one-side and full of hyperbole instead of actual analysis. Anyway, that's another story.
As per the Chinese government pissing you off so much, I would say they are probably very sad that DigitalBomb doesn't agree with their judicial interpretation of copyright agreements.
Wow, I replied to you and didn't even have to tell you to go "bugger off", imagine that.
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Pravin Wagh, 30 Dec 2006 @ 5:27am

The $ amount might have been irrelevant
Just because you show up in court and present 15 bullet points about why you're right, that doesn't mean the judge and jury have to accept all of your points. Only a few of those points have to be true, and you can troll up a point or two just for the shock value and publicity.

I'm not sure how Chinese courts work (I'm sure most of us reading this don't know either), but it's quite likely that the company at fault here was penalized mainly for piracy alone, and that the "losses" presented by the MPAA were just part of the traditional presentation of how the defendant has caused damages. The theorized damages might even have been deemed irrelevant, and the actual laws being broken might have held more weight.
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Wizard Prang, 30 Dec 2006 @ 7:13am

Keep digging.
How many people you know have downloaded a movie?

How many of those are lost sales?

The MPAA is digging in the wrong place.
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Paul, 1 Jan 2007 @ 10:35pm

"if no revenue was lost then there was no crime"

And herein lies the problem. How do you properly calculate lost revenue? Some people who pirate movies wouldn't go pay for it even if they couldn't pirate it while others who pirate movies might spend money on it if they couldn't get it for free.

How do you tell if it is lost revenue or not, pass out a survey along with the pirated movie?
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Debbie Kendrick, 4 Mar 2008 @ 9:22pm

so what
I know some maybe mad at this but so what Hollywood makes so much money it is not even funny. And we in the U.S thinks not a thing of paying $7 to 12 dollars to go see a movie. It is sick went people are going with out food and clothes, and doctors here at home and over seas. It is going to cost more and more just to see the movie let and alone buy popcorn $3.00for a small) and a coke ($4.00 for a small). Went will someone put a stop and wake up and do the right thing in this world of ours? I know that if people will not put a stop on it we will burn yourself and others over seas. Went will we stop thinking only of things like movies and not people Our world will end just like very very bad and have A unhappy ending.
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