Creative America Blog

Today is World Intellectual Property Day. Every year on April 26th, creators around the world get together to recognize the critical role intellectual property plays in encouraging creativity and protecting the jobs and livelihoods of all creators.

Here in the United States, some Creative America supporters have already told us what IP means to them, and now we’d like you to join in on the conversation.

See what some Creative America supporters are saying on Facebook.

Will you tweet a message on what IP means to you using #IamIP?

IP rights allow for the creation of the films and television shows that you and your colleagues work so hard to produce – and ensure that you are compensated for your work.

Make sure you check out all of the different events going on today to see the real impact that intellectual property protection has on creators by going to the World IP Day Facebook Page.

A new study finds that removing just one pirate site benefits creators. Help get the word out to your co-workers and friends. Share this today!

A little while ago we reached out on our blog to tell you about how the removal of just one major pirate site led to a 6-10 percent boost in sales for new, innovative digital media platforms. These legal channels support you – and all creative professionals who work on the films and television shows we all enjoy.

Now, we have an easy way for you to share this information with your colleagues and friends.

Will you share this infographic?

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Share this infographic now!

It’s important that you help spread the word about the true costs of online content theft — share it today!

Thanks,

Chris

Today on Capitol Hill, the House Judiciary Committee on Courts, Intellectual Property and the Internet will hold a hearing to consider updates to existing copyright law and hear testimony from Maria Pallante, the U.S. Copyright Office’s Register of Copyrights.

We’ll be watching closely, as will many who care about the application of copyright law in today’s modern, digital world. Copyright is enshrined in our Constitution, and throughout American history it has evolved to keep pace with technological advancements.

In our view, any new discussion of changes to copyright law must recognize the critical role that copyright plays in allowing artists and creators to make a living and prosper from their creative works.

That fundamental right is threatened by the ongoing widespread violations of copyright law from illegal websites dedicated to infringing content.

Every day, creators and makers must spend inordinate amounts of their own time and energy to monitor for theft of their work. That’s not an acceptable status quo.

We welcome and encourage a conversation about how to adapt copyright in the context of a rapidly-changing digital environment. But it must stay true to its intended purpose – and protect creators from online theft.

A new study released today and conducted by academic researchers at Wellesley College and Carnegie Mellon University found a causal relationship between the shutdown of one of the largest sources of illegal downloads, Megaupload, and an increase in online movie sales and rentals.

At its peak, the website Megaupload.com boasted “more than one billion visits to the site, more than 150 million registered users, and 50 million daily visitors and accounting for four percent of the total traffic on the internet,” according to the Justice Department indictment, and allegedly generated “$175 million in illegal profits through advertising revenue and selling premium memberships.”

The site’s founder, Kim Dotcom, lived a notoriously lavish lifestyle fueled by the profits from others’ stolen creative works – allegedly.

The authors of the study looked at data from two studios across 12 countries and included controls for country-specific trends and the Christmas holiday and concluded that “revenues from digital sales and rentals for the two studios were 6-10% higher than they would have been if Megaupload hadn’t been shutdown.”

The Wall Street Journal wrote:

The findings bolster studios’ arguments that piracy harms their businesses. Some critics of the entertainment industry have argued that piracy results from a lack of legal alternatives, and many who illegally download media would never have paid.

The research concludes for some people that isn’t true. The shutdown of Megaupload caused weekly digital sales of movies from the two studios to grow by between 10,500 and 15,300 units from what would otherwise have been expected, the study said. Rentals grew between 13,700 and 24,000 units a week.

But the causal relationship doesn’t end there. More than two million Americans rely on film and television to make a living, and the industry includes nearly 95,000 businesses, which can be found in every state in the country. That loss of revenue has a real life impact in terms of jobs, wages, and quality of life for middle class families and small businesses.

SEE ALSO: Kim Dotcom: Living Large off Stolen Work

According to a new Dow Jones Newswire report, Microsoft “is consolidating its digital crimes and software piracy teams into a single Cybercrime Center,” responding to new research that shows criminals are coupling counterfeit software with malware.

Microsoft has long been among the targets for software piracy, yet researchers have found that criminal organizations are taking advantage of the current heightened demand for PCs in emerging markets to target more victims.

A study to be released Wednesday by market researchers IDC concludes that about one-third of the software installed on PCs world-wide in 2011 was counterfeit and at least 20% of Microsoft Office software installed by businesses was counterfeit as well. There was a one-in-three chance that the counterfeit software also was infected with malware.

Other recent studies quoted in the article suggest the problem may be more widespread:

In an investigation in China last year, researchers purchased 169 branded PCs through traditional Chinese IT malls, and all contained counterfeit versions of Windows pre-installed and 91% contained malware. Another purchase of 52 laptop computers in Malaysia, Thailand and China found half infected with malware.

Software piracy is big business. One criminal group based in Eastern Europe at its peak generated nearly $4 million in sales of pirated versions of Windows, reports Dow Jones.

A 2011 study by the Business Software Alliance estimated the total commercial value of pirated computer software at $63.4 billion in 2011, up from $58.8 billion in 2010.

The addition of malware could be used to generate even more money by stealing information from users, such as account numbers and passwords. In a report on movie piracy, the security firm McAfee warns: “With unauthorized, illegal content, movie fans are exposing themselves to a host of risks, including malvertising, identify theft, and malicious code downloaded with a streamed movie.”

The computer software industry and creative industries are not the only ones hurt by piracy and counterfeiting. According to the U.S. Chamber of Commerce’s Global Intellectual Property Center, counterfeiting “has become a multi-billion dollar criminal activity that affects almost every American industry.”

Last night’s Academy Awards® were an amazing celebration of the proud industry that wouldn’t be the same without the hard work and creative talents of you and your colleagues. In all, Creative America supporters gathered at more than 230 Oscar® Watch Parties around the U.S. Thank you for taking the time to host a watch party and stand with America’s creators and makers.

Standing up for American jobs and against online content theft is incredibly important, and you have shown how truly successful this effort can be. Now, help us showcase these efforts by sending a photo of your party that we will post to our Facebook page.

Will you email pictures from your party so we can share them with the rest of Creative America?

Send the pictures of your Oscars® watch party to info@creativeamerica.org.

Thanks again, and let’s have another great year,

Tim

In a front page story, The New York Times previewed a new report released today by Mandiant, a leading American security firm, tying the main hub of Chinese cyber hacking activity to the geographic area surrounding a Chinese military base in Shanghai.

“An unusually detailed 60-page study, to be released Tuesday by Mandiant, an American computer security firm, tracks for the first time individual members of the most sophisticated of the Chinese hacking groups — known to many of its victims in the United States as “Comment Crew” or “Shanghai Group” — to the doorstep of the military unit’s headquarters. The firm was not able to place the hackers inside the 12-story building, but makes a case there is no other plausible explanation for why so many attacks come out of one comparatively small area.” 

Buried at the end of the NYT story is an acknowledgement from anonymous government officials and Rep. Mike Rogers (R-MI), Chairman of the House Intelligence Committee, that more needs to be done to prevent the wholesale theft of American intellectual property.

“A few years ago, administration officials say, the theft of intellectual property was an annoyance, resulting in the loss of billions of dollars of revenue. But clearly something has changed. The mounting evidence of state sponsorship, the increasing boldness of Unit 61398, and the growing threat to American infrastructure are leading officials to conclude that a far stronger response is necessary.

‘Right now there is no incentive for the Chinese to stop doing this,’ said Mr. Rogers, the House intelligence chairman. ‘If we don’t create a high price, it’s only going to keep accelerating.’”

Yesterday, the University of Southern California’s Annenberg Innovation Lab released the second installment of its Ad Transparency Report, an effort to demystify the intricate system of online advertising revenue that allows illegal pirate websites to make money off infringing creative works.

Like the initial report released last month, the February report looks at websites listed in Google’s Transparency report, which lists the top infringing sites with the most copyright removal requests. Only instead of drawing on a year’s worth of data, it’s limited to data from January 1-31, 2013.

The Innovation Lab noted positive developments since the first edition of their monthly report:

“We look forward to working with industry participants to improve our methodology. Since the first report, we have been contacted by several commercial services that are developing tools to service the ad market in auditing the sites that ads appear on. We welcome the entrants of these firms to create a new ad ecology. We also welcome the cooperation we received from firms like Google and Open X to make sure that ads from their servers are not placed on infringing sites.”

In our last post, we blogged about how Jeans maker Levi’s responded quickly when they learned their ads had appeared on file-sharing sites. The Lab’s educational efforts have also landed stories in multiple news outlets, including The New York Times.

On the downside, there are still plenty of ad networks connecting reputable brands with ad space on infringing websites. The report notes that ad-supported piracy is a “relatively new phenomena stemming from the birth of large peer to peer (P2P) Internet sites in 2001.”

“In the last five years a huge number of new ad networks have sprung up to service the seemingly infinite ad inventory of the broadband era. Much of that inventory sits on the more than 150,000 pirate entertainment sites.”

Over time, this effort will hopefully lead to greater awareness among brands, the general public, and ad networks themselves, of how online advertising funding streams support websites hosting pirated content and undercut the ability of artists and content creators to be compensated for their creative works.

With greater awareness, and public pressure to act ethically, legitimate businesses in the online ecosystem will take their advertising dollars elsewhere – isolating illegitimate actors and drying up the ad revenue that fuels their illegal activity.

Yesterday, we blogged about how U2 manager Paul McGuinness, speaking at the Midem Conference in France, called on Google to do more in preventing piracy and ensuring that artists get compensated for their work.  At the same conference, Blink 182 bassist and vocalist Mark Hoppus appeared on a panel to discuss opportunities and challenges facing artists in light of new technologies and social media.

Hoppus described how social media allows him to instantly reach millions of fans, and exciting new recording technologies make it easier for bands to record and distribute their own music. But he’s also concerned by how easy it is to copy music – and the fundamental issue that artists need to be able to make money off their work.

“I believe that artists should be paid for their creativity. There’s no other industry where people can come in and take what you create for free and give it away for free and that’s acceptable. I get that the people who download the most are the people who buy the most. But bands that are coming up now are having such a hard time. People used to tour to promote their albums, now the recorded music is a loss leader for T-shirts and concerts. It’s something I haven’t worked out and the music industry has been wrapping its head around for 10 years, but if you don’t pay artists they are not going to be able to create art.”

See article.

Watch his full interview: