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UNIT1PIRATESOFTHEINTERNETITSNOSECRETTHATONLINEPIRACYHASDECIMATEDTHEMUSICINDUSTRYASMILLIONSOFPEOPLESTOPPEDBUYINGCDSANDSTARTEDSTEALINGTHEIRFAVORITESONGSBYDOWNLOADINGTHEMFROMTHEINTERNETNOWTHEHIGNTECHTHIEVESARECOMINGAFTERHOLLYWOODILLEGALDOWNLOADINGOFFULLLENGTHFEATUREFILMSISARELATIVELYNEWPHENOMENON,BUTITSBECOMINGEASIERANDEASIERTODOTHEPEOPLERUNNINGAMERICASMOVIESTUDIOSKNOWTHATIFTHEYDONTDOSOMETHINGANDFASTTHEYCOULDBEINTHESAMEBOATASTHERECORDCOMPANIESCORRESPODENT“WHATSREALLYATSTAKEFORTHEMOVIEINDUSTRYWITHALLTHISPRIVACY”CHERNIN“WELL,ITHINK,YOUKNOW,ULTIMATELY,OURABSOLUTEFEATURES”PETERCHERNINRUNS20THCENTURYFOX,ONEOFTHEBIGGESTSTUDIOSINHOLLYWOODHEKNOWSTHEPIRATESOFTHEINTERNETAREGAININGONHIMCORRESPONT“DOYOUKNOWHOWMANYMOVIESAREBEINGDOWNLOADEDTODAY,INONEDAY,INTHEUNITEDSTATES”CHERNIN“ITHINKITSPROBABLYINTHEHUNDREDSOFTHOUSANDS,IFNOTMILLIONS”CORRESPONDENT“ANDITSONLYGOINGTOGROW”CHERNIN“ITSONLYGOINGTOGROWSOMEBODYCANPUTAPERFECTDIGITALCOPYUPONTHEINTERNETAPERFECTDIGITALCOPY,ALLRIGHTANDWITHTHECLICKOFMOUSE,SENDOUTAMILLIONCOPIESALLOVERTHEWORLD,INANINSTANT”5ANDITSALLFREEIFTHATTAKESHOLD,KISSHOLLYWOODGOODBYECHERNINRECENTLYORGANIZEDA“SUMMIT”BETWEENSTUDIOMOGULSANDSOMEHIGHSCHOOLANDCOLLEGEKIDSTHEPEOPLEMOSTLIKELYTOBEDOWNLOADINGCHERNIN“ANDWESAID,LETSCOMEUPWITHACHALLENGELETSGIVETHEMFIVEMOVIES,ANDSEEIFTHEYCANFINDTHEMONLINEANDWEALLSATAROUNDANDPICKEDFIVEMOVIES,FOUROFWHICHHADNTBEENRELEASEDYETANDTHENWECAMEBACKHALFANHOURLATERTHEYHADFOUNDALLFIVEMOVIESTHATWEGAVETHEM”CORRESPONDENT“EVENTHEONESTHATHADNTEVENBEENRELEASEDYET”CHERNIN“EVENTHEONESTHATHADNTEVENBEENRELEASEDYET”CORRESPONDENT“DIDTHESEKIDSHAVEANYSENSETHATTHEYWERESTEALING”CHERNIN“YOUKNOWITSITSAWEIRDDICHOTOMYITHINKTHEYKNOWITSSTEALING,ANDIDONTTHINKTHEYTHINKITSWRONGITHINKTHEYHAVEANATTITUDEOF,ITSHERE”THEINTERNETCOPYOFLASTYEARSHITSIGNS,STARRINGMELGIBSON,WASSTOLENEVENBEFOREDIRECTORMNIGHTSHYAMALANCOULDORGANIZETHEPREMIERECORRESPONDENT“THEMOVIEWASABOUTTOBERELEASEDWHENDIDTHEFIRSTBOOTLEGCOPYAPPEAR”6SHYAMALAN“TWOWEEKSBEFOREITORTHREEWEEKSBEFOREITBEFORETHEINTERNETAGE,WHENSOMEBODYBOOTLEGGEDAMOVIE,THEONLYOUTLETTHEYHADWASTOSEEITTOTHOSEVENDORSONTIMESSQUARE,WHERETHEYHADTHEBOXESSETUPOUTSIDEANDTHEYSAY,HEY,WEHAVESIGNSITSNOTEVENOUTYETANDYOUWALKBYANDYOUKNOWITSILLEGALBUTNOW,BECAUSEITSTHEDIGITALAGE,YOUCANSEE,LIKE,ACLEANCOPYITSNOLONGERTHEKINDOFTHESLEAZYGUYINTIMESSQUAREWITHTHEBOXITSJUST,OH,ITSONTHISBEAUTIFULSITE,ANDIHAVETOGO,CLICK”CORRESPONDENT“HOWDIDTHOSEMOVIESGETONTHEINTERNETHOWDIDTHATHAPPEN”CHERNIN“THROUGHANABSOLUTEACTOFTHEFTSOMEONESTEALSAPRINTFROMTHEEDITORSROOMSOMEONESTEALSAPRINTFROMTHEPERSONTHECOMPOSERWHOSDOINGTHEMUSICABSOLUTEPHYSICALTHEFT,STEALSAPRINT,MAKESADIGITALCOPY,ANDUPLOADSIT”CORRESPONDENT“ANDTHEREYOUGO”DIGITALCOPIESLIKETHISONEOFTHEMATRIXRELOADEDHAVEALSOBEENBOOTLEGGEDFROMDVDSSENTTOREVIEWERSORADAGENCIES,ORCIRCULATEDAMONGCOMPANIESTHATDOSPECIALEFFECTS,ORSUBTITLESCHERNIN“THEOTHERWAYTHATPRERELEASEDMOVIESENDUPSTOLENISTHATPEOPLEGOTOTHEREARELOTSOFSCREENINGSTHATHAPPENINTHISINDUSTRYPEOPLEGOTOTHOSESCREENINGSWITHACAMCORDER,WITHADIGITALCAMCORDER,SITINTHEBACK,TURNTHECAMCORDERON”CORRESPONDENT“ANDRECORDIT”THISISONEOFTHOSERECORDEDOFFTHESCREENCOPIESOFDISNEYSPIRATESOFTHECARIBBEANNOTGREATQUALITY,BUTNOTAWFULEITHERANDWHILEITUSEDTOTAKEFOREVERTODOWNLOADAMOVIE,ANYONEWITHAHIGHSPEEDINTERNETCONNECTIONCANNOWHAVEAFULLLENGTHFILMINANHOURORTWOSAAF“WELL,THISISJUSTONEOFMANYWEBSITESWHEREBASICALLYPEOPLE,HACKERSIFYOUWILL,ANNOUNCETHEIRPIRACYRELEASES”RANDYSAAFRUNSACOMPANYCALLEDMEDIADEFENDERTHATHELPSMOVIESTUDIOSCOMBATONLINEPIRACYCORRESPONDENT“LOOKATTHIS,ALLTHESENEWMOVIESTHATIHAVENTEVENSEENYET,ALLHERE”SAAF“YEP”CORRESPONDENT“SECONDHANDLIONSTHATJUSTCAMEOUTSOMETIMESIFEELLIKEIMTHEONLYPERSONINTHISCOUNTRYWHOHASNEVERDOWNLOADEDANYTHINGBUTMAYBETHEREISAFEWOTHERSOFUSOUTTHERESOIMGOINGTOASKYOUTOSHOWUSKAZAA,THATSTHEBIGGESTDOWNLOADINGSITE,RIGHT”SAAF“RIGHTTHISISTHEKAZAAMEDIADESKTOPKAZAAISTHELARGESTPEERTOPEERNETWORK”ITSCALLEDPEERTOPEERBECAUSECOMPUTERUSERSARESHARINGFILES8WITHEACHOTHER,WITHNOMIDDLEMANALLKAZAADOESISPROVIDETHESOFTWARETOMAKETHATSHARINGPOSSIBLEWHENWEWENTONLINEWITHRANDYSAAF,NEARLYFOURMILLIONOTHERKAZAAUSERSWERETHEREWITHUS,SHARINGEVERYKINDOFDIGITALFILESAAF“AUDIO,DOCUMENTS,IMAGES,SOFTWARE,ANDVIDEOIFYOUWANTEDAMOVIE,YOUWOULDCLICKONTHEVIDEOSECTION,ANDTHENYOUWOULDTYPEINASEARCHPHRASEANDBASICALLYWHATTHISISDOINGNOW,ITISASKINGTHEPEOPLEONTHEPEERTOPEERNETWORK,WHOHASFINDINGMEMO”WITHINSECONDS,191COMPUTERSSENTANANSWER“WEHAVEIT”THISISFINDINGMEMO,CRISPPICTUREANDSOUND,DOWNLOADEDFREEFROMKAZAAAMONTHBEFOREITSRELEASEFORVIDEORENTALORSALEIFYOUDONTWANTTOWATCHITONALITTLECOMPUTERSCREEN,YOUDONTHAVETOONTHENEWESTCOMPUTERS,YOUCANJUST“BURN”ITONTOADVDANDWATCHITONYOURBIGSCREENTVANDTHATSADAGGERPOINTEDRIGHTATTHEHEARTOFHOLLYWOODCHERNIN“WHEREMOVIESMAKETHEBULKOFTHEIRMONEYISONDVDANDHOMEVIDEOS50PERCENTOFTHEREVENUESFORANYMOVIECOMEOUTOFHOMEVIDEO”CORRESPONDENT“15PERCENT”CHERNIN“50PERCENTSOTHATIFPIRACYOCCURSANDITWIPESOUTYOURHOMEVIDEOPROFITSORULTIMATELYYOURTELEVISIONPROFITS,YOUAREOUT9OFBUSINESSNOMOVIESWILLGETMADE”EVENIFMOVIESDIDGETMADE,NIGHTSHYAMALANSAYSTHATWOULDNTBEANYGOOD,BECAUSEPROFITSWOULDBENEGLIGIBLE,SOBUDGETS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