Battling Bit Torrent

Can the movie studios beat online piracy?

(Photo: Snap Stills/Rex Features)

(Photo: Snap Stills/Rex Features)

Veteran film producer Don Carmody worries his next film may prove too popular for its own good. The Mortal Instruments: City of Bones is scheduled for release in August. Based on a series of young-adult fantasy novels by Cassandra Clare, it was shot in Toronto and Hamilton and stars Jonathan Rhys Meyers. Carmody says Clare’s predominantly teenage female fans are rabidly loyal; he’s betting they’ll want to see his film again and again. “If I had to worry about another picture coming down the line,” he says, looking at scene sketches hanging on the wall of his temporary office in Toronto’s west end, “it would be this one.”

You could be forgiven for wondering why Carmody fears enthusiastic teenagers. Here’s the back story: a year ago, he released Goon—basically an update of the 1977 hockey classic Slap Shot with violence and profanity escalated for a jaded 21st-century young male audience. Seann William Scott plays Doug Glatt, an affable but dim-witted bouncer whose sole talent—brutish thuggery—occasions his unlikely recruitment into minor-league hockey. Pretty soon he’s busting skulls on his way to a climactic confrontation with Ross (the Boss) Rhea (played by Liev Schreiber), an aging enforcer about to hang up his skates. Heavy on haymakers and light on subtlety, Goon was just the sort of film Carmody loves to make—an unpretentious vehicle he thinks people actually want to see. “We fully expected the movie to beat Bon Cop, Bad Cop,” the Canadian movie that still holds the record for domestic sales, Carmody says.

After its first week in theatres, though, Goon’s audiences dwindled alarmingly. Carmody heard that to get around the Restricted rating adolescents bought tickets to The Muppets and walked into his movie instead. Carmody believed his real problem, though, was something else entirely. “All of a sudden, we started noticing tweets from people selling the movie. ‘Free download: Goon.’ ‘Goon: $2.’” Carmody called the Canadian distributor, Alliance Films (recently acquired by Entertainment One). “They said, ‘Yeah, we’re monitoring this stuff. It’s everywhere.’” Goon was being pirated like nothing Carmody had experienced in four decades of filmmaking.

Alliance could tell him about the extent of illegal downloading because it received regular reports from Canipre (short for Canadian Intellectual Property Rights Enforcement), a nine-person copyright monitoring firm based in Montreal. Alliance had Canipre on a permanent retainer to scour the Internet for illicit copies of its movies and seek their removal. Known as a “takedown campaign,” such battles heat up as films arrive in theatres, and typically last several weeks—a film’s prime money-making window. “You don’t want to spend your money thereafter, because then you’re fighting a losing battle,” explains Canipre senior operations director Barry Logan.

All this is facilitated by a monitoring network Canipre assembled during the past five years. Think of it as a spiderweb; the strands include a presence on BitTorrent and other peer-to-peer services, cyberlockers, websites—anywhere pirated films are likely to surface. Logan is reluctant to discuss certain aspects of how he assembled his web, but clearly it involved deceit and subterfuge. “We’ve penetrated a number of underground groups and invite-only FTPs,” Logan says. “That’s typically where we see a lot of the first-version uploads transacting.” While Canipre’s film-noir website paints the company as the scourge of pirates, the truth is murkier. Logan says adversarial relationships with pirate site operators are generally counterproductive; working amicably to get illegal content removed produces better results. Canipre could seek to shut down illegal sites, but doesn’t. “It’s best to know where your enemies are and what they’re doing,” he says. “The intelligence value far exceeds the enforcement value.”

The cloak-and-dagger appeal of Logan’s work wore off long ago; he readily confesses his job has become a mixture of boredom and frustration. Boredom, because watching for illicit files and firing off boilerplate legal notices to offending sites is painfully monotonous. Frustration, because there are limits to how far clients are prepared to go to defend their films; the industry is conservative, and his customers, almost exclusively independent film companies, have limited budgets. You might say Canipre is spoiling to drop the gloves. And just like when Glatt and Rhea step out of their penalty boxes for Goon’s climactic showdown, things are about to get ugly.

Movie piracy dogged the industry even back when Carmody worked on Porky’s—yes, the infamous 1982 Canadian-produced teen comedy—but the damage was limited. Later, while college kids traded Jay-Z and Smashing Pumpkins MP3s with abandon, the film industry enjoyed a lengthy respite bestowed primarily by technological limitations. Digital movie files were too large to be transmitted quickly or cheaply. But technology’s inexorable march gradually surmounted those barriers; cheap bandwidth proliferated, and peer-to-peer systems like BitTorrent and Gnutella offered a means of exchanging large files rapidly and easily. For several years, the MPAA has tracked what it calls the “piracy-free window,” the time elapsed between a film’s release and the first appearance of illegal copies. The MPAA claims this window now averages 14 days, although a few years ago it was measured in mere hours. “Piracy damned near destroyed the music industry,” says Carmody. “We don’t want it to happen to the film industry.”

Movies are vulnerable to piracy from the post-production process onward. Sometimes, films leak straight from the studios, which send out hundreds of pre-release DVD “screeners” to awards guilds, reviewers and other industry professionals; these can be used to create high-quality bootlegs. But they’re most vulnerable immediately after theatrical release. Pirates sometimes sneak compact video cameras into early screenings to capture grainy video of the movie, complete with audible popcorn-munching, a practice known as “camming.” The MPAA says 90% or more of initial pirated versions are obtained in this manner.

Goon was released in Britain more than a month ahead of North America. Carmody fretted it would be cammed, but things went off without a hitch. It was in North America where things went awry. In recent years, American distributors have experimented with what’s known as premium VOD (video on demand), a scheme by which a newly released film is made available simultaneously on pay-per-view television for a high price. (This tactic is virtually unheard of in Canada.) Goon’s U.S. distributor, Magnolia Pictures, made the film available via U.S. cable providers for $30. They’d done it previously with other films. This time they’d regret it.

Of all the people eagerly awaiting bootleg copies of Goon, Logan and his eight technicians probably searched hardest. Canipre’s campaign began as the film hit Canadian theatres on Feb. 24, 2012. They didn’t wait long. The following morning a 1.51-gigabyte file called Goon.2011.VODRIP.XVID.QP.AVI tripped its web. Canipre found it on a private FTP site. Goon’s piracy-free window hadn’t lasted a day.

Although the file would doubtlessly be renamed as it spread, its nomenclature told fragments of the story. A release group calling itself “QP” was claiming responsibility. That didn’t reveal much—release groups change names often. But the “VODRIP” part—that caught Logan’s attention. This suggested QP had “ripped” a direct electronic copy straight from the U.S. VOD offering. The file quickly spread as users downloaded and posted it elsewhere: within hours, it was on BitTorrent and other peer-to-peer networks, streaming video hosts, and direct download server farms. At 624 pixels across by 336 pixels down, mercifully it was not high definition. But it was good—good enough to watch on a big-screen TV. Good enough to burn a medium-quality DVD. Good enough to inflict serious damage.

Modern copyright legislation in many countries allows copyright holders to demand websites remove illegal copies of their material. Canipre, already familiar with many of the site operators, knew how they preferred to receive such takedown notices. “By making it a business process, we’re able to achieve compliance quicker,” Logan explains. “We’re pirate-friendly in the sense that we believe you get more done when you’re nice than when you’re an idiot.” Some sites respond quickly, others sluggishly, a few not at all. In situations where co-operation cannot be obtained, Canipre sometimes uploads “spoof files” that waste downloaders’ bandwidth with unplayable video files. It’s called “saturation”: the aim is to frustrate and demoralize. But no matter how fast Canipre fired off takedown notices and spoof files, it couldn’t keep up. Takedown campaigns are aptly referred to as “whack-a-mole,” and the moles were winning.

David Mulaire, a theatre operator in Portage la Prairie, Man., looked forward to packing Cinema Centre for Goon screenings. “You could not live in this community and not be aware that this movie was being shot here,” he says. “Many people in the community were extras in the film, so the buzz was everywhere.” But just days after it began playing on his screens, Mulaire learned someone in the community was advertising pirated DVDs of Goon on Facebook for $10. Some 400 people attended the film during the first week; just 50 turned out during the second, terminating its run. That hurt—Mulaire needs to maintain robust ticket sales, otherwise film companies might decide it’s not worth supplying the small Portage market.

Mulaire told his booking agent, who told Alliance, who told Canipre, who told the RCMP. Sgt. Chris Turner says the force identified three individuals it believed were distributing discs locally. Investigators established their IP addresses and contacted the Internet service provider to confirm the geographic origin of offending posts. Search warrants were obtained, but taking the case to trial would be an arduous and expensive process. The RCMP handed a cease-and-desist notice to one individual, contacted family members of a second, and was unable to locate the third. The activity ceased but nobody was charged. That alone consumed 200 man-hours. Turner apologetically confirms the RCMP had other priorities. This hints at the practical limitations police face when enforcing the Copyright Act—and also why the burden for fighting film piracy falls largely on the industry itself.

Carmody estimates Goon lost at least $1 million of potential box-office sales in Canada due to piracy, and likely millions more in DVD sales. He expects to recoup his fees from the film, but little else. Alliance Films suffered worse. “All I know is that it was a high-priority film for them,” says Logan, “and that they lost a half a million dollars.” Beyond the figures, there are also feelings of betrayal. Carmody particularly resented the illegal distribution in Manitoba, where much of the film’s $9-million budget was spent. “We shot in Brandon and Portage la Prairie,” he fumes. “We spent a fortune there, and they were hotbeds of piracy.”

Carmody’s next film, The Mortal Elements, will be distributed by Sony. The major studio will employ many of the same techniques used by Canipre and others to ensure pirates don’t ruin its release. “They’ll be protecting it as much as possible,” he says. But Carmody puts little faith in Whac-A-Mole campaigns, and his experience with Goon has him wanting something more. Whereas once he regarded piracy as an unavoidable annoyance, he now wants to fight back. “Because of what happened with Goon, I’m like, ‘Screw this.’ I’m willing to go after these people individually.”

Canipre wants to help him do it. Logan aims to import to Canada a controversial litigation strategy known as “speculative invoicing,” already implemented with varying degrees of success in the U.S. and Europe. The idea is that Canipre uses its monitoring network to track IP addresses used to download movies illegally. Copyright owners then sue the users of those IP addresses as “John Does.” Courts can compel Internet service providers to identify their customers, who then receive letters demanding thousands of dollars to settle infringement claims.

Voltage Pictures, a Los Angeles studio that made extensive use of speculative invoicing in the U.S., was first to take Canipre up on its offer. During September and October, Canipre scanned BitTorrent networks for IP addresses transmitting bootlegs of Voltage films (Oscar-winner The Hurt Locker being the most prominent). It identified thousands belonging to customers of TekSavvy, an Ontario-based ISP. Voltage then sued those John Does for copyright infringement in Federal Court. The question now is whether the court will force TekSavvy to identify its account holders. Although speculative invoicing cases seldom (if ever) proceed to trial—the legal fees add up quickly—Logan insists Voltage is prepared to go all the way. “If you’re going to swing a stick, you’ve gotta hit,” Logan says.

If Voltage really is prepared to hit, Canipre’s monitoring methods will be put to a test. One of the central challenges with speculative invoicing claims is the risk of wrongful accusations. Michael Boudett, a specialist in intellectual-property litigation at Foley Hoag LLP in Boston, notes that knowing the IP address used for an illegal download is different than knowing who did it. “The computer may be on a shared network, it may be a shared computer in somebody’s house, or it may be shared by roommates,” he says. Logan, though, is confident Canipre’s methods of collecting evidence will hold up under court scrutiny.

Canipre has already paid a price for teaming up with Voltage: its cover was blown. Anonymous, an amorphous activist organization rabidly opposed to Internet surveillance, accused the company of trying to intimidate Canadians. Wearing signature Guy Fawkes masks, two members purporting to represent the organization issued pseudo newscasts via YouTube warning Canadians of Canipre’s activities. “Canipre has gone over five years undetected—five years too many,” one raged in digitally disguised baritone. Anonymous members also claimed to have retaliated against Canipre, and Logan confirms Canipre’s servers suffered seven denial-of-service attacks in December originating from Australia.

Provided enough participants sign on, speculative invoicing could be another way for Canipre to leverage its monitoring network. Logan is now attempting to recruit other copyright holders. So far he’s had few takers; he thinks many await the Voltage action’s outcome. As the list of films seriously damaged by piracy grows, however, he may find more willing customers. “These guys have approached me, and they want to go after some people who did this on Goon,” Carmody says. “And I’m inclined to go ahead.”