Popcorn Time - Online piracy: how it affects the movie industry

Ever heard of 'Popcorn Time'? It's a torrent website that provides the user with top quality movies, immediately available for download, as many times as you like. The movies are HD quality too and, wait for it, absolutely free. If that sounds too good to be true, it is because it's not true. 'Popcorn Time' is an illegal piracy website and if you're downloading films from this site, or any other illegal streaming site, you are not only breaking the law, you are costing people their jobs.

What is online piracy?

According to the law, downloading and distributing of copyrighted goods without the say-so of the owner of the works is illegal. Interestingly, in India, watching illegally streamed films online is legal, but they draw the line with distributing, selling, hiring of public displaying of movies. So, in short, the biggest culprits are downloading sites like 'Popcorn Time', torrent and streaming sites as well as street vendors of copied films. Yet, if you download even part of a movie it counts as copyrighted material and if you stream content to a large number of people you are also violating the copyright act. In fact, in the US, the penalty for copyright infringement is 5 years of imprisonment and/or a $250 000 fine. Repeat offenders can expect a prison sentence of up to 10 years. An ex-studio employee was officially sentenced to eight months of house arrest and a $1.23 million fine for leaking screener versions of The Revenant and The Peanuts Movie.

There are three ways in which films can be pirated for illegal online usage. Firstly, someone can physically sit in a theater and record the movie for further sales. Such movies are generally of low quality. To get your hands on high-quality HD stuff, you need to either hack into a studio's intranet or distribute a film that has been leaked in some way. Mostly, the leaked films are streamers that have been sent to movie critics and other industry role players. Rumor has it that many film producers leak films for increased publicity. This usually happens before the movie is released and costs the film 19% of potential revenue, just for the sake of publicity. This doesn't mean that piracy is now okay because it has been sanctioned by the studios, it just means that there are more crooks in the business with their own agendas.

Don't think that the piracy sites like 'Popcorn Time' are graciously offering you free movies out of goodwill. They are pocketing big time out of advertising revenues. In the end, everyone is in it for the money.

How online streaming works



The streaming website has links to film files embedded on their website. When the user clicks on the link, it is directed to another website that the user doesn't see. This website is where the content is stored on a server. The server streams the files to the user's device, without going back through the streaming website. The user's device decodes the file and the user watches the film on his or her device and then returns to the streaming website for more content.

The shocking stats behind movie piracy

I know what you're thinking. Piracy is a victimless crime! The studios already have a lot of money and the actors too. Downloading a free movie's not hurting anyone. The problem is that it is not just you that are downloading free movies. Consider these statistics:

• 22% of the global bandwidth is dedicated to online piracy

• 91.5% of content downloaded sites that stores downloadable files are copyrighted

• Piracy sites receive 146 million visitors per day which means 53 billion visitors per year.

Yup, the movie piracy game is massive, and these stats don't include the sales of counterfeit dvds from dodgy vendors on the street.

Business insider has conducted a survey in conjunction with Survey Monkey to get an idea of what's going on in the minds of the online streamers. 14% of responders admitted that they illegally stream movies online, although that number could likely be higher as not all respondents may have been honest in their response to this question. More than 50% stated that they streamed content illegally online because they couldn't find it via legal channels while between 10-20% of respondents said the content was not available in their region. A little over 10% of people shockingly believed that they shouldn't have to pay for the content. 39% of respondents admitted to streaming TV series, with Game of Thrones being the top dog in this category. Movies accounted for about 25% of content being streamed. A massive 42% of respondents confessed that they have been illegally streaming content of the internet for more than three years. When asked why they don't stream unlicensed content online, the largest response was that they thought it was illegal. The next two most important reasons were a fear of viruses and simply because they didn't know how.

Rationalizing movie piracy

Like we said, it's not just you who are making a dent in the movie and television industry. 70% of internet users think downloading movies illegally from sites like 'Popcorn Time' is totally okay. As mentioned previously, most people only think about the money that is lost by the studios and the actors, who arguably do receive sizable sums of money for their work. They forget the actors make sacrifices to appear in the movies, like time away from their children. If you're thinking that pirating one movie will spark such fandom that the downloader will be willing to purchase the artists' next film through legal channels, you are absolutely mistaken. Yes, the digital world has created the ability to stream movies online, and some feel that the studios should just deal with it. Mostly, people just want things for free.

What online piracy is doing to the people in movie industry

The thing is that nothing in the world is free. You might get the movie for free if you're downloading from sites like 'Popcorn Time', but there will always be someone else to pay for it. We are not that concerned about the studios and the actors either, especially since executive producers contribute to the distribution of pirated content themselves in the name of publicity.

What we are worried about is the effect on the lower-tiered employees. The make-up artists, the cameramen, the special effects guys, the body doubles, and stuntmen. In the US film industry. Piracy affects their income, their pensions and other benefits that are part of their payment. The fact is that 70 000 people lose their jobs per year. In Bollywood, the largest film industry in the world, 50 000 people lose their jobs every year. This is a huge problem as India's unemployment rate is horrific. What's more, these people are specialists and if the industry is small, like the Australian film industry, it's much more difficult to find a new job.

The cost of piracy to the film industry around the world

In the USA, online piracy costs the industry $50 billion per year. In the UK, a similar amount is lost: £50 000 per year. Bollywood loses about Rs 50 billion of revenue just due to piracy.

These losses, in addition to the job losses, have a massive impact on the economy. The company loses revenue and this means that the government loses tax money that they now have to source from elsewhere. Being such large industries in the USA and in India, these countries especially suffer from a weakened economy. This means that there is less scope for job creation and results in more people losing their jobs and increasing the unemployment rate in the country. Online piracy not only affects the film industry, it affects you – the taxpayer.

Because producing a movie runs on a fixed cost, the revenue made out of legitimate box office sales can be the difference between making a profit and making a loss. Often, the movies that are pirated are Academy Award quality high budget movies, that don't necessarily have to be seen on the big screen in 3D. It is a crying shame that illegal online streaming through sites like Popcorn Time impacts on the profit on such films.

Independent producers suffer the most. It often takes those years to scrape the money together to produce the film, and even though they get a lot of fans, many of those fans were born out of illegal online streaming. The result is that they may lose so much that they barely break even. Greg Carter, producer of 'A Gangland Story' says: 'It feels like someone is walking into your house and stealing your furniture. The big studios can absorb it, but guys like me, we're not millionaires. We're fighting like crazy for every dollar, every nickel, and every penny just to survive in this marketplace'.

Another example is 'The Hurtlocker', a movie that has won six Oscars. Yet despite this, it has made a meager $16.4 million at the box office in North America. The movie was available on the web months before it arrived in theater, which is probably the main reason why its sales were so incredibly low for a best Academy Award picture.

The top ten pirated movies for 2016

Blockbuster superhero movies were definitely the flavor of 2016 when it came to pirated movies. The top ten most pirated films of 2016 were:

1. 'Deadpool'

2. 'Batman v Superman: Dawn of Justice'

3. 'Captain America: Civil War'

4. 'Star Wars: The Force Awakens'

5. 'X-Men: Apocalypse'

6. 'Warcraft'

7. 'Independence Day: Resurgence'

8. 'Suicide Squad'

9. 'Finding Dory'

10. 'The Revenant'

It is a pity that excellent films like 'The Revenan't also fall under this list. Films like 'The Revenant' and 'The Wolf of Wall Street' which was two of the top illegally downloaded films in 2014 (30 million downloads) lose a lot of revenue out of lower box office sales. More so in comparison to superhero movies where a lot of consumers still go to the cinemas to watch the film as they believe it will be a better experience to see it on the big screen. These films still gross a lot of box office sales, where films with less of an action factor see the brunt of the losses in sales.

How can we counteract piracy?

Counteracting piracy would rely on targeting the two reasons why people pirate movies in the first place. People stream movies online because they can then watch the movie in their own time in the comfort of their homes. The introduction of legal streaming websites like Netflix provides a legal way of doing so at a very reasonable price and there are many people who would forgo an illegal route if a reasonably cheap option is available. Yet, this doesn't mean that users don't exploit these legal services by sharing passwords with friends so that they can also get access to content – illegally.

Secondly, there is the fact that people don't really consider illegal downloading of movies as a crime. Internet service providers in Canada, the UK and India send warnings to their customers who visit and download material from illegal sites like 'Popcorn Time' to remind them of the seriousness and illegality of their actions in the hope to scare them off. The shock factor will surely deter the occasional downloader to search for legal routes.

Of course, many illegal streamers simply want content for free or believe that they shouldn't have to pay for content. There is nothing one can do about that. Some people will always be out for a good deal, even if it is through illicit channels.

Where there is a legal industry, there will always be those who exploit it for their own benefits. Be it the shady studio executive who leaks content for early publicity or the streaming website looking to make money of even shadier advertising, or just the user who wants something for nothing. The same is true for the movie industry. These individuals seldom think about the damage that they are doing to unseen people who have worked hard to get the show on screens and they are the ones who suffer the most from salary cuts and job losses. Illegal downloaders and streamers rant about the state of the economy and taxpayers' money, oblivious to the fact that their leisure pastime contributes to the decline of said economy.