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In Fear of A Napster Planet

The Motion Picture Association of America (MPAA) estimates that the U.S. movie industry already loses $3 billion a year through conventional video piracy. No figures are yet available for the toll exacted via Internet piracy. And even the figure for conventional piracy is open to question, because it assumes that the thousands of teenagers who watched "Titanic" on pirated Video CDs in Guangzhou and Bangkok, would otherwise have paid the full movie theater ticket price.

But the MPAA is worried, because the industry thrives on its control of international distribution, and broadband Internet threatens that control. The Napsterization of the movie industry is not something the MPAA likes to think about. Its concerns are shared by the Department of Commerce, and by copyright industry groups such as the International Intellectual Property Alliance. In December, the White House released an international crime threat report concluding that copyright laws have even bigger implications. Countries that fail to protect copyrights will witness the exodus of their best talent, according to the report, and a loss of jobs and tax revenues. It even suggested that criminal organizations may be using the proceeds of copyright-infringing product sales to fund guns, drugs and terrorism.

David Anderman, Lucasfilm's associate director of business affairs, had been aware of the online video piracy problem surrounding "The Phantom Menace" since the Internet release of the film's trailer in November 1998. While Lucasfilm had embraced digital film technology for production and marketing, this also made the company's product vulnerable to unauthorized distribution. Twenty-four hours after the release of "The Phantom Menace" in the summer of 1999, Anderman discovered 150 Web sites offering pirated copies of the film, Spata4ent among them. Anderman contacted Xoom.com, ordering the removal of the infringing material. The ISP complied. But soon the film was back. So, Anderman called the FBI.

On September 10, 1999, Christopher Woiwode, supervisory special agent in charge of the FBI's Hi-Tec squad, visited Anderman at Skywalker Ranch. They were joined by Hemanshu Nigam, director of Internet Enforcement (worldwide anti-video-piracy) at the MPAA. After discussing the threat to the movie industry posed by Internet video piracy, they decided to seek a criminal prosecution.

Woiwode began investigating the hundreds of "Phantom Menace" Web sites that had sprung up around the release of the movie. One of the main objectives of a prosecution was to deter other potential infringers, but Woiwode discovered that the others were either too young, or overseas. Then they found the Disman.

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