Are Movie Theaters to Blame for Illegal Downloading?

January 6, 2016, 10:43 PM UTC
A couple watch a big screen outside movi
A couple watch a big screen outside movie theaters of the US cinema chain AMC Entertainment in Monterey Park, east of downtown Los Angeles on May 22, 2012 in California.
Photograph by Frederic J. Brown — AFP/Getty Images

The music industry may have evolved its way around the illegal downloading problem, now that Spotify and other streaming services have more or less taken over as the main way to listen to songs. But movie piracy continues to be a multi-billion-dollar business. Why?

One reason could be that there is no easy way to stream a first-run movie. Netflix and other services can stream older films under licensing deals, and both Netflix (NFLX) and Amazon will stream the movies they make themselves.

But other than that movie viewers are out of luck. And so many people continue to pirate the films they want.

According to recent blog post by Marc Hustvedt, co-founder of entertainment news site Tubefilter, one of the main reasons why piracy is still so prevalent is the stranglehold that movie theater owners continue to have on the release of new films. As he puts it:

“Exhibitors are dug in, resisting change and fighting off innovative distributors from Netflix to Amazon who are adapting to consumer demand while still actually working to preserve the experience of watching a movie in a theater.”

Hustvedt, who is also the co-founder of a new movie studio called Supergravity Films, argues that this stranglehold increases piracy because it requires movie makers to submit to an artificial 90-day “window” in which their films can only appear in theaters.

Netflix tried to close the window when it released Beasts of No Nation, saying it would distribute the movie online through Prime Video at the same time it appeared in theaters. But the major theater chains refused to show the film. They threatened to do the same with the sequel to Crouching Tiger, Hidden Dragon.

Companies like Regal and Cinemark may believe that they are fighting the good fight, to retain the old-fashioned experience of watching a movie in a theater, but Hustvedt says they are actually doing the movie business more harm than good.

Subscribe to Data Sheet, Fortune’s technology newsletter.

Viewers who might be willing to pay money to watch a movie online—and who might never even go to a theater, for a variety of reasons—are simply downloading them illegally, Hustvedt says. But if they could watch them legally, many might do so.

“The innovative distributors thinking goes that when consumer interest in a film is peaked—usually during the opening and first few weeks—that’s when you should be as widely available as possible on all platforms. Not everyone lives near a theater showing a film or wants to travel to watch it at a set time.”

See how Amazon is getting into movies

There’s a lot to Hustvedt’s argument, I think. Movie piracy is as much a response to the timing of demand as it is the pricing or any other factors. In that sense, illegal downloading is an expression of the desire to watch a movie—just not at the time and place of Hollywood’s choosing. The more platforms that are available, the more likely people will pay. Piracy is mostly a service problem.

Hustvedt has a dog in this fight, since Supergravity Films is pursuing a platform-agnostic, direct-to-consumer approach by distributing its movies through Netflix, Vimeo, and anyone else who will take them. But that doesn’t make him wrong. How long until the theater companies wake up?

Read More

Artificial IntelligenceCryptocurrencyMetaverseCybersecurityTech Forward