The Technium

How to Thrive Among Pirates


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Shangri-La is the official name of a small Chinese town in a mountainous valley on the edge of the Tibetan plateau. Formerly called Zhongdian, the town was renamed Shangri-La by local businessmen with the blessings of the national government in order to spur tourism. Who would not want to visit Shangri-La? I’ve been twice, and sorry to say, it is no Shangri-La. But on my last visit there a pristine 6-inch layer of snow in April covered the normally dusty and dilapidated old town, and in this clean robe it actually looked picturesque.

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Old guy on the main street of Shangri-La.

For hundreds of years this frontier town has been an overnight stop for travelers along the winding road from the agriculturally rich highlands of Yunnan to the dry wind-swept lands of Tibet. The shops along the main street of Shangri-La today sell an exotic assortment of household goods to a steady stream of Tibetan and minority farmers trudging in from the countryside. A hundred one-room shops along a drab main street offer sturdy leather boots, brightly woven carpets, farm hardware, rugged horse blankets, hot water thermos bottles, solar battery rechargers, cheap iron tools, and fancy striped fabrics and ribbons. Mixed among this traditional ware were dozens of shops that sold nothing but DVDs for thousands of movies. A few of the shops had a greater selection of movies for sale or rent than your local Blockbuster. Some of the thousands were Hollywood hits, some were Hong Kong kungfu episodes, or Korean series, but most were Chinese-made films. Almost all of the discs were cheap (less than $3) pirated copies. The new digital “freeconomy” where copies flow without payment is not just a trait of cosmopolitan cities; information wants to be free even in the most remote parts of the globe.

I was in China, in part, to answer this simple question: how does the China film industry continue to produce films in a land where everything seems to be pirated? If no one is paying the filmmakers, how (why) do they keep producing films? But my question was not just about China. The three largest film industries in the world are India, Nigeria and China. Nigeria cranks out some 2,000 films a year (Nollywood), India produces about 1,000 a year (Bollywood) and China less than 500. Together they produce four times as many films per year as Hollywood. Yet each of these countries is a haven, even a synonym, for rampant piracy. How do post-copyright economics work? How do you keep producing more movies than Hollywood with no copyright protection for your efforts?

This question was pertinent because the rampant piracy in the movie cultures of India, China and Nigeria seemed to signal a future for Hollywood. Here in the West we seem to be headed to YouTubeland were all movies are free. In other words we are speeding towards the copyright-free zones represented by China, India and Nigeria today. If so, do those movie industries operating smack in the middle of the cheap, ubiquitous copies flooding these countries have any lessons to teach Hollywood on how to survive?

The answers uncovered by my research surprised me. My first surprise was the discovery that in each of these famously pirate-laden countries, piracy is not really rampant – at least not in the way it is usually portrayed by copyright police. Piracy of imported (i.e., Hollywood) films is rife, but locally produced films are pirated to a lesser degree. The reasons are complex and subtle.

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Most Nollywood films are completed in two weeks.

The first consideration is quality. Nigerian films are a unique blend of a soap-opera and a Bollywood musical; there’s a bunch of talking then a bunch of dancing. To call some of the Nigerian films low-budget would be to insult low-budget films. Many of the thousands of Nigerian movies are more like no-budget films. But even big-budget Bollywood films are cheap compared to Hollywood, so the total revenue needed to sustain their production is much smaller than Hollywood blockbusters. Naturally the smaller the costs, the less needed to recoup the expenses. For some films even a trickle of revenues may be enough.

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Posters on the Lagos street (via Esquire)

But more importantly, low quality is not just a trait of illegal stuff. In Nigeria, particularly in the poorer north, a vast network of small-time reproduction centers serve up copies of films for an audience of many millions. Originally an underground network of copy centers replicated VHS tapes; now the network pumps out optical disks. In the former days of VHS tape copies, the official versions had much better printed covers. These readable and brightly colored covers were their chief selling point, and printing the covers was the bottleneck at which the film industry exerted their policing. But these days in Nigeria, as in the rest of the developing world, movie disks are usually VCDs (video CDs) rather than DVDs. Although lower in resolution, VCDs are easier to duplicate, with cheaper blanks, and in a quality that is “good enough” on a cheap TV screen. These copies are rented out for a few cents from small dusty shacks. But often the cheap VCDs which rent for pennies are “legitimate” – duplicated under an arrangement with the movie producer. The filmmakers and the duplicators have cleverly reduced the price of legitimate discs near to the price of pirated disks. In fact the same operators will usually duplicate both. Since the legitimate disks aren’t that much more expensive than illicit ones, distributors have less incentive to bother with lower-quality pirated versions.

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In addition the financing of films in Nigeria is closely aligned with the underground economy. Investing in a film is considered a smart way to launder money. Accounting practices are weak, transparency low, and if you are a thug with a lot of cash “to invest” you get to hang around movie stars by bankrolling a film. In short the distinction between black market disks and official disks generated with black market money is slim.

Nigerian filmmakers look to two other sources of revenue for their trickle of money: theaters and TV. Theaters in Nigeria offer a very precious commodity for very cheap ticket: air conditioning for several hours. The longer the film the better the deal. Theaters also offer a superior visual experience to watching a tape of VCD on an old television. You might actually be able to read the subtitles, or hear the background sounds. The full theatrical experience of a projected film is simply not copyable by a cheap optical disk. So box office sales remain the major revenue support for a film. As Nigeria’s nascent TV industry grows, its appetite for content means there is additional revenues for broadcasting films on either airways or cable systems.

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Bollywood wall poster in Rajastan (via Meanest Indian)

Bollywood is likewise supported by air-conditioning. Few Indians have aircon in their homes, fewer own air-conditioned cars. Mid-afternoon in the summer you really don’t want to be anywhere else except in a cool theater for several hours – which is why Bollywood films can go on forever. You can sell a lot of movie tickets this way, even though someone could get the same movie for almost free as a DVD on the steaming hot, dusty street one block away.

Like Nigeria, India has a similar mixture of piracy and legitimacy in its film industry. Bollywood and mafia money are famously intertwined. In terms of money laundering, tax-avoidance, and covert money flows, the entire film industry is a gray market. The behind-the-scenes people making illegal copies of films also make the legal copies. And prices for legit and pirated versions are almost at parity.

So why even bother with pirated movies? Because India has had a very draconian censorship policy for official studio films. Their famous “no kissing” rule is but one example. This censorship has pushed niche films to the underground where they are served by the piracy network. If you want something independent, racy, out of the ordinary, or simply not in the mainstream, you are forced to patronize the pirates. This includes the filmmakers as well as the audience. If you produce an avant-garde film how else to get it seen? Cheap duplication on the street is the way a filmmaker will get his art out, further blurring the distinction between legit and illegal. As in Nigeria, this convergence means the purchase price of an official VCD may not be much more than a pirated version, about US$3. In effect Indian filmmakers see these low disc prices as advertising to lure the masses into cool theaters to see the latest releases on the glorious big screen. The hi-touch factor of the theaters is the reward for paying, and the pirated versions are the tax or costs for getting attention.

China also has a censorship problem. Big budget films are subsidized by the government, and live off theatrical release. In fact getting screen time in theaters is heavily politicized. Independent films can’t get booked in the limited number of theaters, so they get to their audience on optical disks. And if a viewer wants to watch a film not produced by state-sponsored studios they have to find one on the streets. As in India and Nigeria, the price of legitimate copies are close to pirated, so for consumers there is no difference between the two. You can rent a copy of either type for about 25 cents a night.

The third leg supporting indigenous film industries in lands without copyright enforcement is television. Particularly cable television. Television is a beast that must be fed every hour of the day, and the industry insiders I spoke to in India, China, and Nigeria all saw a television spot as a legitimate destination for independent artists. The sums paid for work appearing on cable TV were not large, but they were something. Because television runs on attention and is supported by ads, the issues of piracy are sidestepped. For some producers pirated discs on the street create an audience, which might translate into a call to run their work on TV, or else prompt an invitation to produce something new.

Where indigenous filmmakers feel the sting of piracy is not within their own countries but in the very active export market. Nigerian films are watched throughout African and in the Nigerian diaspora; likewise Indian films are early sought out throughout South Asia and the Mid-East and in deep Indian communities in the West. Chinese films are watched in East Asia. Most of this market is served by pirated editions, depriving the filmmakers of potential international income. In this way these ethnic film industries share the same woes as Hollywood. But in their home turf, where the success of a film really lies, piracy is a different animal than the specter predicted by Hollywood.

Back on the gritty streets in Shangri-La I went looking for that utopian dream: a DVD of a first run movie for a dollar. That dream was too optimistic, even for Shangri-La, but I did find a copy of the latest Harry Potter movie (with Chinese subtitles) for $3, and upon close inspection it sure looked like a legit version. Clean design, Chinese style, crisp printing on the box, no typos, official looking holograph seal, etc. It was most probably illegal, but who knows? It would take a lot of research to determine its true origins, and for most consumers, like me, a moot question since every DVD vendor in town seemed to have the same inventory of mixed goods, all priced about the same.

What do these gray zones have to teach us? I think the emerging pattern is clear. If you are a producer of films in the future you will:

1) Price your copies near the cost of pirated copies. Maybe 99 cents, like iTunes. Even decent pirated copies are not free; there is some cost to maintain integrity, authenticity, or accessibility to the work.

2) Milk the uncopyable experience of a theater for all that it is worth, using the ubiquitous cheap copies as advertising. In the west, where air-conditioning is not enough to bring people to the theater, Hollywood will turn to convincing 3D projection, state-of-the-art sound, and other immersive sensations as the reward for paying. Theaters become hi-tech showcases always trying to stay one step ahead of ambitious homeowners in offering ultimate viewing experiences, and in turn manufacturing films to be primarily viewed this way.

3) Films, even fine-art films, will migrate to channels were these films are viewed with advertisements and commercials. Like the infinite channels promised for cable TV, the internet is already delivering ad-supported free copies of films.

Producing movies in a copyright free environment is theoretically impossible. The economics don’t make sense. But in the digital era, there are many things that are impossible in theory but possible in practice – such as Wikipedia, Flickr, and PatientsLikeMe. Add to this list: filmmaking to an audience of pirates. Contrary to expectations and lamentations, widespread piracy does not kill commercial filmmaking. Existence proof: the largest movie industries on the planet. What they are doing today, we’ll be doing tomorrow. Those far-away lands that ignore copy-right laws are rehearsing our future.




Comments
  • smws

    @kk because if you’re judging the size of movie industries by output, as you seem to imply, then 875 > 500 thus the US film industry is larger than China’s, which is thus not one of the top 3.

  • Shane

    Excellent post in particular showing that a copyright free environment need not “kill of cinema” as Hollywood would have us believe. However your 2nd point about cinema exhibition stay ahead by offering more and more tech enhancements like reformed 3D. This only ups the price of a ticket. When THX sound was introduced we did not pay 30% extra in ticket prices. As you say cinema theatre prices need to come Down and this might drop the incentive for “pirated copies”

  • Suzanne Lainson

    What struck me was the fact that these “success” stories wouldn’t exist without crime.

    Here are three excerpts from the article.
    ______________

    NIGERIA In addition the financing of films in Nigeria is closely aligned with the underground economy. Investing in a film is considered a smart way to launder money. Accounting practices are weak, transparency low, and if you are a thug with a lot of cash “to invest” you get to hang around movie stars by bankrolling a film. In short the distinction between black market disks and official disks generated with black market money is slim.

    INDIA Bollywood and mafia money are famously intertwined. In terms of money laundering, tax-avoidance, and covert money flows, the entire film industry is a gray market. The behind-the-scenes people making illegal copies of films also make the legal copies. And prices for legit and pirated versions are almost at parity.

    CHINA Big budget films are subsidized by the government, and live off theatrical release. In fact getting screen time in theaters is heavily politicized. Independent films can’t get booked in the limited number of theaters, so they get to their audience on optical disks. And if a viewer wants to watch a film not produced by state-sponsored studios they have to find one on the streets.

  • David Ing

    @kevin2kelly Your first-hand observation of the movie industry in China, India and Nigeria tends to reveal the presumption in the first world that an industrial paradigm of large scale, mass-production film-making should be a model for the world. In the U.S., independent (indie) film production was originally an alternative to the large studios. Now, many of the indie films are just as big as the planned blockbusters.

    I see lessons to be learned, not necessarily by the giant movie studios premised on the Henry Ford model, but in the new Internet era where an individual or small groups with a camera and PC-based editing software can create local productions that can reach a mass audience. Oh, wait, that’s already been done … on Youtube, and equivalents.

  • Bodó Balázs

    hi,
    here are some articles that talk about the same issues:

    Larkin, B. (2004). Degraded Images, DistortedSounds: Nigerian Video and the Infrastructure of Piracy. Public Culture, 16(2), 289–314. http://muse.jhu.edu/login?uri=/journals/public_culture/v016/16.2larkin.html

    Liang, L. (2003). Porous Legalities and Avenues of Participation. New York. http://www.sarai.net/publications/readers/05-bare-acts/02_lawrence.pdf

    and finally:

    Joe Karaganis’ work on Piracy and Enforcement in Global Perspective. Karaganis’ work reframes the problem of media piracy from a criminal/ policing problem ( “a global scourge” ; “nirvana for criminals”) to “a global pricing problem, shaped by high prices for media goods, low incomes, and cheap digital technologies.” Book soon to be out.

    • http://www.kk.org Kevin Kelly

      @ Bodo: Thanks for the references. I was not aware of them.

  • Brad Fox

    A very interesting post, although I don’t necessarily agree with your conclusions. I’ve written a lengthy response (from the point of view of a Canadian film producer) here:

    http://www.bradfox.com/blog/2010/04/lessons-from-pirates/

  • Patrizia Broghammer

    In a very near future they won´t need actors to make movies, computers will.
    Making a movie will be so cheap that we will have millions of producers, including the men on the road.
    This is already happening on youtube.
    OK, quality for now is not so good, but it will change.
    And who cares if 99% is rubbish?
    The 1% out of millions will still be a number Hollywood producers will fear…

  • Ramki B Ramakrishnan

    Though few points may be correct; IMO you are wrong about the current Indian film industry… lots of things have changed. Maybe you should recheck; censorship has changed, quality of films are better now, etc.

    Well you should check out stats of Indian films like Fire, The Terrorist, Taare Zameen Par,… these were not mainstream but had good reception.

  • Anonymous

    Dear Mr. Kelly,

    What is your comment to the recent financial woes of MGM studios?

    http://news.bbc.co.uk/2/hi/business/8631843.stm

  • Brad H.

    Great article!

  • vanderleun

    Defining digital down.

    [Strangely, this comment has been dubbed by the Captcha Oracle as "The Nichie "]

  • Slaists

    As one examples for early adopters of “copyright free environment” I’d like to mention http://www.ironsky.net/site/

  • Nathan

    I don’t agree with your assertion that pirated copies in the US have costs associated with them. I’m sure I could use bittorrent to download any movie released so far this year, in many cases even the ones still in theaters. Granted I have to pay for an Internet connection, but I’d do that anyway, or maybe I’m going to an Internet cafe or something.

    Piracy is just plain a lot more high-tech here in the US. We’re not going to street bazaars with tables full of pirated VCDs and DVDs stacked up; we’re downloading from the Internet and in many cases we are making no compromise on quality. In fact, I would argue that pirated movies are often much higher quality than the DVD simply because there’s no ten unskippable minutes of trailers, FBI warnings, and adverts on the pirated copy.

    I think the movie industry in the US faces a much higher challenge from piracy than its counterparts in other countries. I disagree with a lot of the stuff the MPAA does, but I’m not sure they would see much of a benefit by selling discs at bargain-basement prices to compete with the pirates.

  • Nobilis Reed

    Nathan, you’re missing the point.

    He’s not talking about pirate DVD’s compared to legitimate DVD’s.

    What he’s talking about is theater experience vs. DVD experience. In his future, it doesn’t matter whether a DVD is pirated or not. He’s conceding the recorded (and downloaded) media ground to the pirates, as indefensible, and staking out the claim to the theater. Theaters will need to provide a better experience than the home (not all do) and the movies need to be made to cater to it.

    • http://www.kk.org Kevin Kelly

      @Reed: You have it correct.
      @Nathan: Copies are free, and not worth “protecting.”
      @Slaists: I looked at the Iron Sky site and don’t see what the copyright free angle is.
      @vanderleun: You lost me on “defining digital down.” What means?

  • fred

    Not entirely comparable because these consumers are poor and thus captive audiences, they cannot dvr most of their content. More advanced economies can simply by pass any middle men

  • fred

    “Piracy is just plain a lot more high-tech here in the US. We’re not going to street bazaars with tables full of pirated VCDs and DVDs stacked up; we’re downloading from the Internet and in many cases we are making no compromise on quality. In fact, I would argue that pirated movies are often much higher quality than the DVD simply because there’s no ten unskippable minutes of trailers, FBI warnings, and adverts on the pirated copy.”

    In fact they are making it worse. Netflix and other rentals seem to be getting bonus stripped copies of films now, which lowers the incentive for going with legal material even further

  • Reader

    What he’s talking about is theater experience vs. DVD experience. In his future, it doesn’t matter whether a DVD is pirated or not. He’s conceding the recorded (and downloaded) media ground to the pirates, as indefensible, and staking out the claim to the theater. Theaters will need to provide a better experience than the home (not all do) and the movies need to be made to cater to it.

    This is not going to be easy. Projectors are getting better and cheaper – a decent LCD projector and a large flat wall easily rival a traditional movie theater. A large screen HDTV is not bad either. 3D is an interesting gimmick but it can also be distracting – I wouldn’t count on 3D alone to entice people to go to the theater (and, if I’m not mistaken, there are already 3D televisions on the market). Avatar made a lot of money off of 3D but that might have been a kind of one-off thing that others have trouble replicating.

    Also, the entire notion that film producers will be able to continue profiting from sales in theaters still rests on copyright protection being enforced (the assumption is that the theaters cannot show pirated movies).

    So yet another argument for how content providers will thrive in an age of unpunished privacy falls flat on its face…

  • Reader

    Also, on the subject of piracy, I would like to ask if you plan to write anything about Jaron Lanier’s book You Are Not a Gadget, or if you have already done so?

    And I am also curious how you feel about the piracy of your own works. Do you plan to put your new book online for free? Would it bother you if someone scanned it and uploaded it to Rapidshare and BitTorrent?

    • http://www.kk.org Kevin Kelly

      @Reader: I don’t have a problem with “piracy” or copying of my work. All of my books have been put on the web for free from day one, the first in 1994. I assume the books’ PDFs, which I produced myself, are BitTorrented. I consider it a type of advertising. (The publisher of my new book probably has a different idea.)

      I have not seen Jaron’s book yet.

  • Joaquin

    surprinsingly i find a good amount of similarities with another 3rd world economy country: MEXICO.

    there´s an underground culture for “narco” movies, many times sponsored by drugdealers themselves, which have no theater exposure, but a very good income for “home” DVD sales in MEXICO and US LATIN.

    see this when u get a chance by VICE magazine:

    Mexican Narco Cinema: Full Length – The Vice Guide To Film | VBS.TV
    http://www.vbs.tv/watch/the-vice-guide-to-film–2/mexican-narco-cinema-full-length

  • csquirrel

    > 1) Price your copies near the cost of pirated copies. Maybe 99 cents, like iTunes.

    This is how I’ve been thinking for a while… at present I would bit-torrent films because the price and accessibility of DVDs is too high… but if a download cost 50p/75c I’d do that every time, for lots of films, some of which I would probably forget to watch… likewise with pirated music, if it was 25p per song, I’d pay every time…

    lots of small payments for downloads to music/film producers adds up to more than few high payments and lots of free, pirated downloads…

  • Bryan

    But is this “thriving?” It seems to me that all of the examples have *much* lower production values than what we’re used to in the US. Blurryvision, unreadable captions, poor scripts. Want better quality? The government is financing those, but how much propaganda is included? How much truth?

    One thing not addressed is the living standard of the filmmakers (writers, actors, stagehands, stuntmen, editors, etc). Are these people cranking out poor films as fast as they can simply to stay afloat? Are they able to put anything aside for retirement?

    Is this really a model we’d want in the US? A dramatic lowering of quality in return for low/no cost?

  • Joe Burmeister

    Sanity!

    AllOfMp3.com was so successful (until it was shutdown) because it was so cheap no one could be bothered to pirate. You where really paying for the service (no duplicates, high quality, easy to find things) not the music itself.

    Like free software, the money is made from the service, not the goods themselves.

    Music will always make money at live concerts.
    Film will always make money at the theater.
    (Games should bring back the arcade with tech no-one could afford/fit at home! ;-) )
    TV, well they are free now anyway.

  • Corey

    It really does seem like the continued survival of Nollywood, Bollywood and the Chinese film industry is more a symptom of inefficiencies in the market for pirated films than anything else.

    In the developed world we have effectively frictionless trade in intellectual property. They do not. The fact that there is any price at all for the illegal goods means studios still have a place to compete, and that’s how they’re doing it.

    A world with 100% AC and broadband penetration doesn’t have a film industry anymore.

  • Technotopia

    I love how Kevin Kelly completely ignores all of the valid questions raised by his readers choosing instead to reply to innocuous comments like the one questioning his math on production numbers which are themselves only approximations.

    Here (again) are a few of the very relevant, very intelligent questions you completely ignored trying to explain or answer:

    “Also – you describe their industries being supported by dirty money and government subsidies, with censorship like ‘no-kissing’ in India. Is that how we survive piracy?”

    “But is this “thriving?” It seems to me that all of the examples have much lower production values than what we’re used to in the US. Blurryvision, unreadable captions, poor scripts. Want better quality? The government is financing those, but how much propaganda is included? How much truth?”

    “Do you really see any way that Hollywood films can survive all that in a land of AC, HD home theaters pumped full of endless amazing content that we can record legally? Then add to that pirated copies good enough to watch on our amazing home theaters?”

    “One thing not addressed is the living standard of the filmmakers (writers, actors, stagehands, stuntmen, editors, etc). Are these people cranking out poor films as fast as they can simply to stay afloat? Are they able to put anything aside for retirement?”

    …with that last one being the most important. It’s absolutely ridiculous that you didn’t even touch on this subject (but not altogether surprising given your background and views). Any real journalist would have considered that an important question utterly germane to the topic at hand.

    • http://www.kk.org Kevin Kelly

      @Technotopia: I am not a real journalist, so I don’t have answers to the big questions that everyone has about the future of movies. Some of the questions you list I have already answered in the comments, but me let say a few words about the quality of life of the makers. My impression (and I don’t have a lot of data, so I could be wrong) is that the filmmakers in the countries I talk about have a middle-class life in comparison to their country folk. So in India they live like other middle class Indians. They don’t have pensions for retirement, but then neither does anyone in Hollywood these days. I think it is a strange thing to expect retirement of any sort, in any profession. Based on history, I don’t think the creative arts are a good candidate for earning pensions. Whether they are able to save seems to me to be entirely up to the individual. Some can and some can’t.

    • Jose

      Relax, dude. You are not talking about some biased United Nations report on film piracy. This is just a blog entry, which by definition is SUBJECTIVE. I don´t get why this blog owner should write about what you consider important. If it were my blog, I´d focus on whatever I wanted to about this issue.

  • MS

    “Nigerian filmmakers look to two other sources of revenue for their trickle of money: theaters and TV. Theaters in Nigeria offer a very precious commodity for very cheap ticket: air conditioning for several hours.”

    Ummm. Nollywood is well known to be a video, not theatrical, industry. There are few theaters left in Nigeria (just a couple of new ones opened in Lagos in recent years). Nigerians have told me that is hard to persuade theater owners to show Nigerian films because of the lower production values–they show mostly American and Indian films. Lancelot Imasuen just premiered “Home in Exile” in theaters, but that was news because it was an unusual event. Imasuen and others are advocating a move to the cinema, but it’s a very new development and *not* typically how money is made.

    Film-makers more typically partner with or sell the rights to a “marketer,” who then distributes VCDs via centralised, physical marketplaces without a cinema run.

    That’s not the only point in this blog post that deviates from the general understanding of how things work on the ground.

  • gmoke

    I use my library for films and music. DVDs of films and TV, I watch within the week of borrowing I get and music CDs I copy to my computer to listen to over time. Am I a pirate? Even if my watching and listening lead me to buy music and films that I can’t get from inter-library loan?

  • Marty Thornley

    Kevin,

    I’ve enjoyed reading your technium articles for some time and generally find them insightful and spot on.

    I take a lot of issues with this one however.

    First, to say these are the most prolific film industries in the world and then say most if the films (especially those of Nigeria) are no-budget films with poor quality does not line up. You only use the numbers of ‘Hollywood’ films. If you are going to include low and no budget production over ther then you have to do it here. Add all the Jo Americas making indie and nobudge. Films and our numbers would blow them away. On the lower end of these films – the ones only on someones site, only on YouTube, never seen at all I would bet the filmmakers would be happy with a pirated version seen by millions, hell thousands. If you notice most of the people backing the idea of piracy are not making money on their films now, so piracy would be a good thing.

    Second, the houses in those countries do not have big HD tvs, or the quality and quantity of tv content that we have here. So a no-budget film industry can get by. Especially if the theater is a haven of AC in a hot part of the world where most houses have no AC.

    Third, less disposable income means a few things… No HD tvs or AC as mentioned above with less (or zero) TiVo ability, so the home tv experience is not competition. The average person is not capable of being a filmmaker like they are here, so the numbers of ‘industry’ films seems inflated. But you said yourself most of these lack any kind of quality. Lastly, no disposable income means they were never going to pay $15-20 for a legal DVD in the first place. You might as well get whatever you can.

    Do you really see any way that Hollywood films can survive all that in a land of AC, HD home theaters pumped full of endless amazing content that we can record legally? Then add to that pirated copies good enough to watch on our amazing home theaters?

    -Marty

    • http://www.kk.org Kevin Kelly

      @MS; Yes, when I said theaters in Nigeria were another source of revenue besides video I should have emphasized that it was supplimental to video.

      @Marty: I had in mind commercial films —those supported by the audience — not just no-budget films. Most of the no-budget videos made in the west are not financiallysupported by audiences.

  • Lin

    NY Times article: In Shanghai, Hiding Bootlegs Before the World Visits : Bootleg Goods Are Moved to Secret Rooms

    http://www.nytimes.com/2010/04/28/business/global/28piracy.html?hpw

  • Marty Thornley

    “I had in mind commercial films —those supported by the audience — not just no-budget films. Most of the no-budget videos made in the west are not financially supported by audiences.”

    Well, that’s kind of my point, isn’t it? There is no support for that level of film making here. We want bigger and better and that costs millions of dollars. A film that costs millions can not survive the conditions you describe in Nigeria or India or China.

    The fact that no-budget stuff here has no market is proof of that very thing.

    Also – you describe their industries being supported by dirty money and government subsidies, with censorship like ‘no-kissing’ in India. Is that how we survive piracy? No thanks.

    I am open to real solutions that are relevant to this market but these countries only offer a glimpse at a VERY dismal future if that is the only answer.

  • Vladimir

    Kevin,
    I would like to ask you give the permission for publication of Russian translation this article in Russian online magazine chaskor.ru. Our magazine is licensed under Creative Commons. Now in Russia there are discussions about copyright and intellectual property, and your article would be good material for proponents of mitigation of crude restrictions in modern Russian law.

    –Vladimir Haritonov

  • RU

    Your comments about the Nigerian movie industry is simply a portrayal of largely incorrect information. The distributors of Nigerian films are not thugs, nor are they money launderers.

    Nigeria is largely a cash economy – esp. at the lower end of the market which is where these films are sold. Distributing films provides a means for these distributors to invest their funds and receive a good rate of return and a quick turnaround without having to go through the regulated banking system in the country. The reason that the costs of the films are lower than they should be and sell for between $1-$2 a film is because of piracy as well as a recognition of their target markets’ disposable income. However, the impact of piracy is felt more in developed markets as the recent seizure of Nigerian movies in Brooklyn, New York can attest to. Because of piracy, Nigerian film makers cannot sell their DVDs for $10-$15 and instead sell them for $3. Without piracy which is prevalent on Youtube and other video hosting sites that splice these films and make them available to mass markets of African immigrants in the U.S. and Europe, these films would be sold at the higher prices which would have the effect of improved production quality.

    One more misperception that you put forward that is wrong is that Nigerian films are soap operas or musicals. For a fact, Nigerian films are NOT musicals in the Bollywood tradition and have NEVER been. The first Nollywood musical has just this year completed post-production and this movie is for cinematic release internationally as well as in Nigeria. To Western audiences, linking Nollywood to soaps stems from a cultural disconnect which is expected as Nigerian culture is very different from Western culture. And most Westerners DO NOT understand the intricacies of our culture. Nigerian films display Nigerian life which is full of dynamism in all aspects. The easiest thing to equate this to as a form of Western film is “soap operas.”

    In truth, Nigerian films express our cultural heritage and the various manifestations of this in modern life in both rural and urban settings.

    One final misperception that is being falsely reported by the international press is that Nigeria does not have movie theaters. This is a fallacy. It is true that Nigeria does not yet have movie theaters with national coverage. But Nigeria has movie theaters in its three largest cities: Lagos, Abuja, and Port Harcourt. There are also two main film distribution companies in the country that show both Nigerian and Hollywood films in theaters.

    Nigeria’s film industry is not a homogeneous entity – the bulk of films are for the mass market (which is what you attempted to describe). However, there are also films shot on 35MM cameras that are shot over three months that are produced for cinematic release – movies such as “Araromire: The Figurine” – Winner of 5 African Movie Academy Awards 2010; “Irapada” – Another highly acclaimed film; “Ije – The Journey” which just completed an extended run at Nigerian movie theaters prior to its run at UK movie theaters before hitting the US. Movies yet to be released in cinemas include “Black Gold” and “Inale” both directed by Jeta Amata.

    I hope this helps correct a lot of the misperceptions that your piece portrays about Nigeria’s film industry.

    • http://www.kk.org Kevin Kelly

      Thanks. I saw plenty of Nigerian films with musical numbers years ago, so I am not sure why you say there weren’t any until the first one this year. We must have different definitions of “musical.” And I would call them soap operas — dramatic stories of real life with recurring characters. And yes there a now a few theaters in the main cities, but there is no large-scale theater network.

    • Henry A

      RU, you mentioned that “The reason that the costs of the films are lower than they should be and sell for between $1-$2 a film is because of piracy as well as a recognition of their target markets’ disposable income. However, the impact of piracy is felt more in developed markets as the recent seizure of Nigerian movies in Brooklyn, New York can attest to. Because of piracy, Nigerian film makers cannot sell their DVDs for $10-$15 and instead sell them for $3.”

      So are you suggesting that majority of the low budget to no budget Nigerian movies on the market are actually worth $3, not to even mention 10-15USD? Considering the fact majority of these movies are produced for as low as $10K to 20K?

      Nollywood have come a long way no doubt about that, (see: http://www.nigeriamovienetwork.com/pages/history-of-nollywood.html ) but we have to realize that the Nigerian or African (developing) economy is not in the same category as that of the united states or developed countries; and as such the cost of transacting business or cost of goods will vary. So to suggest low budget Nigerian movies to sell for $10-15 is to suggest nobody patronize the industry.

      Take for example, the cost associated with building a decent house in the US (let’s say a single family home or townhouse), will cost roughly $150K-200K and up; but in Nigeria – people build mansions (not single family homes or townhouse) with less than $100K USD! So what does that tell you?

      Hollywood movies are produced with millions of USD, mostly in the hundreds of millions; and are selling on DVD in the range of $10-15; and you expect Nollywood movies to sell for the same? Not possible!

  • Eric L.

    @KevenKelly: “I looked at the Iron Sky site and don’t see what the copyright free angle is.”

    That movie, and its predecessor Star Wreck: In the Pirkinning, are/were both being released under a Creative Commons license. Iron Sky takes that one step further and allow fans to submit their own content to help contribute to the movie via a website called “Wreck-a-movie”, a sort-of open source movie process. Despite lower production values, these movies have proven to have great quality in terms of story, visuals, and audio. Furthermore, the creators have gotten revenue from selling DVD copies and merchandise. This proves that doing the complete opposite of traditional, Hollywood-dependent-on-copyright approach is a sound choice, with further benefits in creative freedom and community involvement.

  • Steve B

    Even in the rich west, there’s still merit to the argument that cheaper DVDs will cut down piracy.

    Downloading isn’t free, even though you don’t pay cash for it. There’s still the time involved, bandwidth usage, disk storage, and general hassle factor. If DVDs are cheap *enough* nobody will bother downloading. The question is: what level is enough? In Nigeria it might be 25 cents for a rubbish-quality VCD, but how much would people here pay for a decent-quality DVD, just because it’s easier? $1? $2? $5? $10?

    Maybe more important, downloading isn’t great for movies which you want to keep around. You can build a “movie machine” PC with ten terabytes of storage but it’d take forever to fill it up with downloads and you’d want to RAID it to avoid losing all that data, so while it can hold lots of movies it’s not as much as one might think. You’ll probably still want an offline backup anyway, and DVDs come with those extra features movie buffs love, so DVDs win again.

    Those two points together suggest a direction in which things will evolve. First, they’ll drive better quality films: the advantages of downloading increase dramatically if you’re only likely to watch the film once, so B-movies become much less viable. It also means movie-makers need to start thinking of films as being long-lived resources, rather than judging them by the money they make the year they’re released. And, maybe most important of all, it gives low-budget films a bigger advantage than they’ve ever had before.

    You can see some of those trends emerging already, but on the other hand there are still fossils in Hollywood who just can’t adapt and keep bungling their ventures into new media. As pointed out above, *nobody* wants to see ten minutes of ads, trailers and piracy warnings at the start of a DVD. Getting rid of that removes one more incentive for people to download. They could also learn from the iTunes experience; if you make legit downloads really cheap, a large segment of the audience will pay for them just because they know they’ll get a good-quality guilt-free copy.

  • smws

    Clarification needed: my friend points out that the quote
    “. The three largest film industries in the world are India, Nigeria and China. Nigeria cranks out some 2,000 films a year (Nollywood), India produces about 1,000 a year (Bollywood) and China less than 500. Together they produce four times as many films per year as Hollywood.”
    does not work out mathematically, because (2 000 + 1 000 + 500) / 4 = 875

    I also think that Nathan’s comment has more merit than Mr. Kelly or Nobilis Reed admit; whereas some of the article was comparing the theatre experience to watching movies at home, some of it was explicitly comparing the cost of pirated media to the cost of legitimate media, which argument breaks down with universal access to broadband in a society (not that any societies really have that *yet*, but they *may*).

    • http://www.kk.org Kevin Kelly

      @smws: “does not work out mathematically, because (2 000 + 1 000 + 500) / 4 = 875″

      What is wrong with that math?