Online movie piracy costs the film industry $3.3 billion every year, and some film companies are taking a huge hit — as much as half of their annual profits have been lost due to piracy. But tracking and combating these piracy efforts has proven difficult, in part because piracy has become so widespread: the Korean Film Council found that an average month sees more than 2,300 films illegally shared on 93 different storage and sharing websites. Companies are eager for solutions to at least curb the prevalence of online piracy.
While cost-effective streaming services like Netflix and Hulu Plus are out there, Sony and Disney are testing a new strategy: Making movies available for rent while they're still in theaters.
Cutting Costs to Lower Piracy Incentives
One reason for movie piracy is the exorbitant cost of going to the movies. The new renting option, consequently, will feature a lower price-point than what it would cost for multiple people to go see the movie. The proposed rental price of $9 would still be much more than the average cost to rent a movie through current streaming and on-demand offerings.
Still, $9 it is much lower than an earlier attempt to make in-theater movies available, when DirecTV offered movie rentals for a steep $30 each. While a $9 rental wouldn't erase piracy overnight, the hope is that pirating behavior would decline through the opportunity to rent in-theater movies at a lower cost. That could make piracy tracking and control efforts easier for the movie industry.
The Value of Low-Cost, High-Speed Internet
One of the main reasons South Korea is the test region for Sony and Disney's new rental strategy is that the country is considered by many to have the fastest Internet speeds in the world. Internet speed is very important if consumers plan to stream high-definition video onto their televisions and computers.
Fortunately, high Internet speeds in the United States are readily available from a wide range of providers. Even lower-cost DSL services from Century Link and other providers deliver speeds more than capable of streaming high-definition movies at the highest quality possible. And with so many consumers already subscribing to in-home Internet services, the biggest hurdle to clear will probably come will before this new form of renting is made available to the public.
Studios Vs. Theaters
A number of major theater chains have 90-day windows of exclusivity when they show a new release, meaning that the movie studio isn't allowed to make the movie available through any other channels during that period of time. Based on that agreement, it seems Sony and Disney would have to find a way around those agreements before they released their new streaming option in the United States — even if it does prove an effective deterrent to movie piracy.