Small Business Hollywood’s Battle Against Piracy

By SBE Council at 27 April, 2015, 4:00 pm

For small businesses and entrepreneurs, every day needs to be World Intellectual Property Day

Go to the website for the World Intellectual Property Organization, and you’ll discover that April 26 was World Intellectual Property Day. The purpose of this date? “Every April 26 we celebrate World Intellectual Property Day to promote discussion of the role of intellectual property in encouraging innovation and creativity.”

Unfortunately, there are plenty of people that have little or no regard for intellectual property and for the people whose businesses and jobs are dependent on IP rights and protections.

While groups like WIPO, the Small Business & Entrepreneurship Council, and the U.S. Chamber’s Global Intellectual Property Center are formidable in the fight to protect IP, do thieves really want to take on the grizzled, tough guys in the Expendables movies? Apparently, the answer foolishly is “yes,” as The Expendables 3 was hit hard by intellectual property thieves.

According to a November 2014 avclub.com report, one of the film’s producers, Avi Lerner, is looking to track down every person that illegally downloaded the movie. The avclub.com story opened: “One of the producers of The Expendables 3 says he will individually hunt down every one of the 10 million people who illegally downloaded The Expendables 3, presumably with extreme prejudice. Avi Lerner believes that the leak of a DVD-quality torrent of the film weeks before its theatrical release date cost him and his colleagues a quarter of a billion dollars in revenue—a quarter of a billion dollars he has vowed to avenge. ‘I want to protect our property and the thousands of people who made our movie,’ Lerner tells Variety, presumably while strapping on a bandolier and smearing eye black on his cheeks. ‘We want to go after those 10 million people.’”

On April 19, 2015, The New York Times noted that Lerner, and his company Millennium, is a major force behind a new antipiracy coalition – the Internet Security Task Force – aimed at “mobilizing small businesses in the television, music, game and software industries against online theft.”

Later in the article, it was reported, “Millennium’s president, Mark Gill, described it as a last-ditch effort by relatively fragile companies with fewer than 50 employees to avoid what they say is the near destruction of their prospective blockbusters, as happened to Millennium and its partners with ‘The Expendables 3’ last year. ‘Maybe larger businesses can afford to take a hit,’ Mr. Gill said in a phone interview last week. ‘But we don’t have that luxury, we can’t survive.’”

Of course, it needs to be noted that most businesses in the movie, television, music, game and software businesses are small enterprises. For example, according to the latest Census Bureau data (2012), 93 percent of employer firms in the motion picture and video industries have less than 20 workers.

IP theft of Hollywood productions is not just about hurting big studios and glamorous stars. Rather, it’s primarily about inflicting harm on small businesses and their employees. Serious efforts to protect IP are good news for small business – and it’s kind of cool that the Expendables have the backs of small businesses.

Raymond J. Keating, Chief Economist