Can the film industry learn from the music industry to stop piracy?

Over the weekend we heard the news that Sony Pictures has been hacked by a group known as “GOP” (who aren’t the same people as the US Republican “Grand Old Party”, presumably). GOP claims to have stolen many of Sony’s “secrets”, including copies of films that haven’t been released, or at least released outside of cinemas yet.

This includes the likes of Brad Pitt’s Fury and the forthcoming Annie remake – which have since leaked on to illegal file sharing websites. This also comes only months after Expendables 3 was leaked online ahead of its cinema release.

The problem for Sony now is essentially two-fold: First off, how to beef up its security and stop the hackers who did the actual hacking. Amusingly there are rumours it was North Korean hackers, unhappy with forthcoming comedy “The Interview”, which is about an attempt to assassinate Kim Jong Un. But secondly, there’s the problem of how to stop the thousands, if not millions of people who might be tempted to download the films illegally.

And it is this second point that I want to address – I think the film industry could probably learn a lot from the music industry. Essentially there are two drivers for piracy: Access and cost. People will pirate content because they can’t view it otherwise (for example, US TV shows that haven’t aired over here yet, or films that haven’t been released yet), or they will pirate because the cost of accessing it legally is, in their view, prohibitively expensive.

A decade ago the music industry was having the same problem with piracy – but since something remarkable has happened. Enter the likes of Spotify – which has grown to be massive and has helped cut piracy dramatically.

Now I know what you’re thinking – what is so radical about this? We already have Netflix after all – which works on a similar model, of using a monthly subscription for unlimited access to content. The difference is in the licensing.

With Spotify, if you buy a monthly subscription (and even if you don’t), pretty much every piece of music ever released is there. Better still, you’re able to access music on the day of release*. The same is true for Spotify’s competitors, like Rdio and Deezer. Broadly speaking, all of the major music streaming services have licensed the exact same catalogues from the record companies, so that whatever service you’re signed up to – whoever gets your tenner a month – you know you’ll get all of the music.

(* Okay, so perhaps not if you want to listen to Taylor Swift, but fact is a massive overwhelming majority of artists are on there.)

For films by contrast, things are much more complex. Film companies have done deals with different platforms, to provide slightly different sets of films to each one. This means that the major players – Netflix, Amazon Instant Video and Sky Movies all have different catalogues. So if you want to watch a specific film then you could be out of luck – despite having shelling out £6.99 for Netflix every month, if the distributor has signed an exclusive deal with Sky then you’re out of luck.

Worse still, this is complicated by film studios also having complex licensing deals with cinemas (which tend to demand 3 months of exclusivity for every film) and DVD/pay-per-view-on-demand – delaying titles from appearing as part of your subscription package. Many films, like the Marvel Cinematic Universe titles, are barely available on subscription at all. Some are even not available digitally at all.

These factors contribute to the two drivers for piracy I describe above: People may be drawn to pirate because they either can’t access the film they want on a service they have – or are unwilling to pay for an extra one. Unless you’re really into films, are you really going to pay for three or four different film services? Not to mention all of the complications on which platforms work on which devices layered on top of that? (“I can watch Iron Man 2 using the Chromecast on the TV, but for Iron Man 3 we’ll need to gather around the iPad…”).

There must be a good reason for this settlement: Presumably the bean-counters at the film studios have figured out that they can, say, extract maximal fees from Sky by handing over one set of exclusive rights, whilst simultaneously monetising the slightly crappier catalogue by licensing it to Netflix on a non-exclusive basis. But until the film companies stop this sort of divide-and-rule, they will never beat piracy. Until the accessibility and price problem are fixed, The Pirate Bay will continue to sail on.

By not picking favourites and licensing the same everything to all of the companies willing to pay royalties, the music industry has massively slashed piracy – and has arguably changed the culture of online music consumption. No longer is music piracy the little guy standing up to being screwed out of lots of cash by evil record labels, but now if you pirate music you’re surely actively harming the artists you like given the wide range of legal alternatives.

Surely it must be increasingly obvious that the same needs to happen in films? Even if it means that revenues can’t be maximised in the short term, the long term cultural impact could be better. And isn’t the prospect of reliable monthly subscription royalties, rather than relying on the marketing of each release tempting to the studios? Once the entire Sony catalogue is available on Netflix from the day of release, and once the other major studios follow suit, surely there will be no need for anyone to pirate, and The Pirate Bay will be cast adrift?

Perhaps it is time for the studios to take some action!