Revenue loss in video approaches $1bn-a-year

Movie studios, independent producers, music video record companies plus creators, distributors and retailers of video content collectively could be losing estimated retail revenue approaching $1 billion-a-year in the US alone, due to lack of comprehensive application of copy protection, according to a new study sponsored by Macrovision Corporation.
This level of displaced revenue would amount to nearly 5% of the $20.6 billion US home video industry.
Macrovision estimates that approximately 75% of movies, music videos and other video material released on DVD and videocassettes utilise its copy protection technology.
In addition to thwarting DVD-to-VHS copying, the technology also prevents DVD-to-DVD-R, DVR and home media center/PC harddrive recording, as a means to inhibit Internet file sharing via these devices. Some video content providers choose not to copy protect certain designated video titles, and these titles are most at risk for unauthorized copying activity.
In each of three Macrovision-sponsored surveys this year, more than 25% of respondents admitted to attempting to make copies of pre-recorded video content in the previous 12 months. Survey results indicate that respondents who admitted to copying activity, primarily by exploiting non-copy protected titles, would otherwise have rented (50%) or purchased (30%) specific titles, amounting to approximately $1 billion in unrealised retail revenues.
“With new, less-expensive products equipped for DVD-to-DVD video copying arriving in home entertainment stores soon, the popularity of combination DVD/VCR units, and other advances in high-quality video and computing technology, leading video content companies are continuing investments in copy protection to counter the rising threat of casual piracy among consumers,” said Carol Flaherty, senior vice president for Macrovision’s Entertainment Technologies Group. “Surveys show that over 50% of respondents have copied music CDs, and over 40% would copy DVDs if they could.”
“The video rights owners are determined to prevent the financial damage that digital piracy has inflicted on the music industry,” she said. “Additional digital rights management technologies, available now or in advancing stages of development, support that objective. The technologies provide options for consumers to make limited numbers of copies when permitted by content rights owners; they support the concept of using an authentic DVD to access other desirable content and features over the Internet, and they further help control illicit peer-to-peer file sharing.”
Most Motion Picture Association of America (MPAA) studios and leading independent rights owners have consistently utilized Macrovision’s copy protection technologies since videocassette recorders were introduced in the mid-1980s. Digital versatile discs (DVDs) now account for more than 60% of home video sales and rentals. Video retailers, represented by the Video Software Dealers Association, believe copy protection is key to sustaining consumer demand.
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