Piracy: an unknown blessing for the audiovisual sector |...

5 September 2022. Published by Benoît Labourdette.

16 min

“Piracy is a danger for creation, infringers must be punished”: this is the commonly accepted discourse, which directs points of view, regulatory and professional choices. And yet, the very people who hold this discourse contradict it in their daily uses. Here are some elements for an enlightened point of view on what is called “piracy”, a practice which in reality conceals extremely rich paths for the remuneration of authors and the renewal of creation.

Are libraries dangerous?

In all the cities of France, you can enter without control (or almost) in places called libraries and media libraries, and consume in an unlimited way the hundreds of thousands of books, music, films and video games made available for free. Your act is not perceived as a devaluation of the cultural products you enjoy without paying, but on the contrary as an extremely rich cultural opening for your personal and social construction. The community considers it as such, by financing these places and by valuing their function of cultural democratization. Moreover, the habits that libraries create encourage the purchase of books and other cultural goods. Thus, there is no competition between the library and the commercial bookstore, but a full and complete complementarity.

The economic model of libraries
The works are acquired by the libraries for amounts 2 to 3 times higher than the public price, in order to legally integrate their collective use. These rights are attached to the support, which means that when the book is too damaged or the DVD scratched, it must be bought back to renew its right of use in the library.

Is culture a business?

Culture: intellectual, artistic and ethical heritage specific to a society or a group of societies. Ex: Western culture.
Dictionnaire Le Littré.

Culture is this shared common thanks to which we build our identity in a personal and collective way, via experiences of reception, sharing and creation. This is why the places of conservation and democratic provision of culture that are libraries (free because financed by the common good), are essential to the life of human collectives. The Bibliothèque Nationale de France, which originated in 1368, remains the central cultural institution of the country. Its new building opened in 1996, built by Dominique Perrault, symbolizes this in its architecture.

Internet is a huge library

Let’s put aside for a moment the economic, piracy and other issues, and consider the Internet from a strictly cultural point of view. Look: this almost unlimited access to a gigantic cultural heritage is a blessing for the access to knowledge and arts in their diversity, to the discovery and to the deepening of one’s taste, of one’s ideas, to one’s education, to the construction of one’s critical mind and of one’s citizenship. This almost limitless access is unprecedented in the history of humanity, and is made possible by networked digital technology. This capacity is of immense wealth for humanity, no one could dispute it (we will discuss the legal issues later). Everyone experiences it every day, if only with Wikipedia or the various tutorials and videos for example, on YouTube or in other social networks: we benefit from a phenomenal power of access to culture, which has changed life itself.

Each of us, in our own field, meet people who have made their culture through “piracy”. For my part, in the field of cinema, I know many young professionals who have built up their cinematographic culture in this way. Without piracy, they simply wouldn’t have been able to discover the works that formed them, because they simply weren’t commercially available, and/or they didn’t have the means to get them. Thanks to this immense archive accessible via the Internet, they built their cinephilia and their desire to contribute to this sector.

Let’s be clear: I am not encouraging theft in any way, but I am defending the virtues of free downloading and streaming on the Internet. And it can be economically viable, contrary to popular belief. Whatever one thinks, free consumption of video on the Internet is a massive use, for everyone. And it is often impossible for users to distinguish what is legal from what is not, on YouTube for example.

So, how do we put an “economic model” in free of charge? Because without an economy, that is to say without time and means for artists to create, culture will become poorer. I obviously agree. So how to put economy without reducing the scope of this new “cultural paradise” that is the Internet? Let’s make a little history to enlighten our present.

Our ancestors the VCRs

At the end of the 1970s, with the arrival of cassette recorders and then VCRs, which made it possible to record and copy records, radio and television, the practice of piracy was already massive. For those who lived through this period, remember the huge shelves full of blank audio and video cassettes in supermarkets... I assure you that it was not to record yourself singing in the shower!

Initially, the European states had tried to block the import of VCRs from Japan by legislation. But this did not hold, it is simply impossible in our globalized capitalist economic system. New technologies and their uses cannot be contained, we have no choice but to deal with them. How was this handled at the time?

In 1985, a revolutionary regulation for authors

I remember those Sunday afternoons devoted to going to each other’s houses with his VCR to copy video tapes, or records from the media library on audio tapes. Obviously, there was already a serious economic problem because of piracy! What about the remuneration of the authors of the works?

Personal recording technologies (tape recorders and video recorders) have opened up a massive use of private copying (the personal copying of audio and video). At the time, the authors’ societies and the State had the presence of mind to realize that this technology and this use could not be stopped, and that it was therefore necessary to innovate by taking into account this new reality, in order to be able to build an economy around it. It is the role of a State to create and make evolve the regulatory frameworks that allow the society it administers to function.

At the beginning, audio and video copying was totally illegal. It was what we call “counterfeiting”, for which the penalties could go up to 3 years of imprisonment and a 2 million franc fine (300 000 euros).

In 1985, the State, advised by the authors’ societies in France and by European examples, took its responsibilities, and set up two measures, which revolutionized the situation, by creating a remuneration for the authors from the private copy. They are still in force today:

First, the state changed the copyright law by making it legal to copy for private use. This is the private copying exception. Since then, we have the right to copy a friend’s record, to record the radio or television.
Then the State created a new tax, the “private copy tax”, levied on the purchase of blank media. In the price of a blank cassette, a blank CD, a blank DVD, or today a hard disk, a part of the amount is a tax (it was 1€ per blank DVD for example). This tax feeds a “common pot” (collected by Copie France, formerly Sorecop), which is then distributed in an equitable way to the authors by the societies of authors, according to the supposed audiences of their works. The audiences of the broadcasts of the works are evaluated (number of people who watched, and potentially copied), and every 6 months, the authors’ societies pay the authors directly.

So, since then in France, the authors are paid directly from the copies made freely by the citizens (of what is broadcasted and published, except Internet). In 1985, the law had thus evolved by taking into account the new technologies that have given rise to new uses, in order to put economics into it. Private copy is a virtuous system, which means that there is a financing of creation, directly paid to the authors, from a free sharing.

The global license bill project: the solution

Since the beginning of the 2000s, a certain number of reflection processes have been carried out to adapt this virtuous logic of private copy to the reality of Internet uses. The idea of a bill, known as the “Global License”, emerged clearly in 2001, initially conceived by two authors’ societies, the Spedidam and the Adami. The idea, in a very synthetic way, is the following:

Make downloading works legal (as private copy was made legal in 1985).
Establish a tax on Internet subscriptions (like the tax on blank media in 1985), which would be about 10€ per month.
Measure the number of downloads of works (which would be much more accurate than the audience estimates for private copy).
To pay directly to the authors their share, via a financial remuneration (like what is at work for the private copy).

Today in 2021, because of the inaction of the State on the subject for 20 years, downloading and streaming generate very consequent incomes (advertisements, subscriptions to illegal platforms, etc.), which do not return at all to the authors. This is a serious problem. If the State had legislated, authors would be paid for downloading their works. And as early as 2012 (because the so-called global license bill was part of the campaign promises of François Hollande, elected to the Presidency of the Republic in 2012), France would have begun to develop a virtuous economic model that would guarantee diversity around a freedom of free distribution on the Internet, thanks to this direct tax levied on subscriptions. This is, in fact, quite similar to the TV licence fee, also a direct tax, which allows the financing of public television and radio.

If this law had been enacted, downloading and streaming would have become legal acts, and Internet users would know that authors are paid according to the number of downloads/viewings, from the price of this “state subscription” that would be the 10€ monthly tax on the Internet subscription.

There would be, just as in the case of private copy, a virtuous circle, which allows the financial recognition of the value of the work of creation, its life and its renewal. And this thanks to the fact that the State would have done its job of regulating the economy, in the light of the evolution of technologies and uses.

Many people consider this bill unrealistic and utopian. However, it was not brought forward by sweet dreamers. The first global license bill was built following a report by Jacques Attali (former adviser to François Mitterrand) in 2008. The law was part of the campaign promises of François Hollande in 2012. Then another report, by Pierre Lescure (former director of Canal +) in 2013 was the basis for a new bill proposed by the deputy Michel Zumkeller in 2013. And in 2016, the global license was even validated in the first instance by the National Assembly as part of the DADVSI law. But then it was gutted. So it is a living subject, which deserves to continue to be defended, because it is in my opinion a real key to the remuneration of authors in the era of the distribution of works on the Internet.

The Hadopi law

Unfortunately, it is another regulatory project that was adopted in 2009: the Loi Hadopi. This law was written from a report made two years earlier by Denis Olivennes, president of the Fnac. The main principle is to penalize the acts of copying, viewing and making available content on the Internet. The declared objective of this law, still in force today, is “the diffusion and the protection of creation on Internet”. But when you read the content, at no time is there any question of remuneration of authors or support for distribution. This law is only a repressive arsenal. In its essence, it would like to “curb” the acts of sharing that the Internet allows, which are however the singularity of this technology, which allows its immense richness for humanity, as we have seen above.

In whose service is this law? It is certainly not at the service of the remuneration of authors, nor of the renewal of creation, nor of the diffusion of works on the Internet... It claims to defend creation, but in reality it only defends the short-term interests of the intermediaries of culture, the publishers, the retailers, the producers, the broadcasters, who, thanks to the lobbying power they have, prefer to work to protect their old economic models rather than to work to imagine new ones.

It is clear that the interests of the cultural industries and the interests of the authors are opposed, because of the attitude of the former, who on the other hand carry a (completely hypocritical) discourse of defense of creation. The “graduated response” only has the effect of making citizens feel guilty, who legitimately download works they like. It is not the Internet users who download who are guilty, it is the State which is responsible for the non remuneration of the authors following the downloading of the works, by the regulatory choice that it made. We can see this with music, which is always 10 years ahead of the audiovisual industry: for years, the industry tried to repress the practice of downloading and streaming music, then they finally took note of it and adapted their proposals by integrating the economy, and it works, of course.

But it is true that if we don’t think deeply about the specificities, opportunities and innovations linked to Internet broadcasting, a quick reasoning seems to give reason to Hadopi: we have to pay what we consume. Except that the economic models of the Internet are not at all the same as the economic models before the Internet. This has been documented for a long time, notably in the book « The Long Tail » (Chris Anderson, 2003). So I propose a very short introduction to the economic models of the Internet, applied to the audiovisual industry.

A market with a demand without a supply

Beyond the Hadopi law, the myth of the financial loss linked to Internet viewing is very present in people’s minds. For example, this post-Covid op-ed by Jean Labadie (CEO of the film distribution company Le Pacte) in Le Monde in 2021, whose caption reads:

Fines for movie pirates
Without a financial penalty against Internet users, French cinema will not recover from the economic crisis linked to the shutdown of theaters.

Le Monde, April 29, 2021

The point of view adopted is that of the industry and not the point of view of the spectator. The spectators are, however, the customers of theaters, distributors and producers; it is surprising to see these companies so distrustful of their own customers. It is astonishing to see that these companies are so distrustful of their own customers, whereas the various sociological studies conducted on the subject have always shown that the people who download the most are also those who buy the most cultural goods.

What is a market?

A market is first of all a demand and a supply: for example, I go to the market because I need vegetables, and merchants come there to sell vegetables. The market is the place that allows for exchange.
A market is also a price that allows this exchange to take place: a price that allows the merchant to earn a living, and that is acceptable in the customer’s budget, with all the variations and tensions that we know. A functioning market allows a good mutual adaptation of the price.
The “market studies” try to analyze the state of a demand, in order to predict if it could be useful to create a market, i.e. an offer to meet the supposed demand. The market study will attempt to specify the terms of the offer: contents, prices and terms of exchange.

Since the beginning of the 2000s, the massive downloading (and then streaming) of films via the Internet can be seen as an immense demand that is expressed. This demand is therefore rich in a gigantic potential market. On the other hand, the industrialists capable of making offers have not proposed anything that is adapted. They have reasoned in reference to their past economic model, which downloading has undermined. They reacted by trying to punish people who downloaded. They could have seen in this change of use, linked to a new technology, opportunities to invent new economic models. Moreover, studies showed that people were ready to pay a subscription (which supports the relevance of the global license bill). In response to this, French industrialists have always postulated that subscription would never allow for sufficient revenues. The result was, for fifteen years, a huge potential market, a powerful demand that was expressed, but never a relevant commercial offer in front of it. Illegal consumption therefore flourished without remuneration for authors, and the only response was the Hadopi law.

The arrival of Netflix in France in 2014

In France in September 2014, this huge market without any relevant offer for fifteen years receives the arrival of Netflix. Netflix was thus faced with an open boulevard, a market with almost no competitors. Its penetration rate in France was phenomenal (as in just about every country). In July 2021, 6.7 million French households are subscribers to Netflix. This represents 29% of households; thus, 65% of the country’s inhabitants have access to Netflix.

French households pay an average of 10 euros per month for a Netflix subscription, which is almost exactly what was envisaged in the global license bill. French professionals had always claimed that it was impossible to finance cinema through a subscription system, that it would devalue the works, that spectators had to pay individually for each film, or else the whole structure would crumble. However, studies have shown for years that this is not true. And the Canal + channel has been proving it since 1984, as well as Netflix since 2014, which thus reaps profits for the financing of creation at heights well above what the Centre National du Cinéma et de l’image animée collects.

Netflix has a huge catalog of films and series and invests a lot to have an increasingly abundant offer, in diversity of genres and in quality of manufacture.

If the global license law had been enacted in 2012 to replace the Hadopi law, France would have developed a living economy of audiovisual creation on the Internet, with direct remuneration for authors Just as the CNC offered a virtuous model of support for creation for the exploitation of films in theaters, the global license law would have opened up a virtuous economic system, based on the new uses of audiences. But the majority of professionals have blocked the law out of fear and lack of information, which has permanently weakened the economic system of the French audiovisual industry, which has become extremely precarious in the face of Netflix. On my part and on the part of many others, it is not for lack of having regularly alerted in professional assemblies for 15 years, receiving each time the animosity of the majority. Innovation, thinking outside the box, is essential to building the future. But innovation is never comfortable, because it implies questioning oneself, sometimes very deeply.

Today in 2021, the CNC and the State have “tinkered” so that Netflix and the other platforms contribute, within the old system of redistribution still in force. But it is this very system that should be reformed, putting authors and the defense of creation back at the center, rather than the industrialists. It is never too late.

But on what basis does Netflix operate, more precisely, and what lessons can we learn from it in our practices?

The indirect economic model

The traditional economic model of the audiovisual industry revolves around the “film product” as an individual object: its cost price (cost), its sales (turnover), and finally the profit generated (we subtract the cost from the turnover). This is what we call a “direct economic model”. The practices of selling cinema tickets, buying DVDs, renting a film on VOD, buying anything in a store... are all part of the “direct economic model”.

But this is far from being the only way to produce profits, there are many other less simplistic economic models, especially in the Internet era. I can refer you to another book, an important one in my opinion, by Chris Anderson, “Free, enter the free economy” (2009), which gives the history and perspectives of indirect business models, which are much more constructive than they may seem at first sight. Let’s take the example of Google: you don’t pay anything, and yet thanks to your use of Google’s services, it generates revenues (in this case mainly thanks to targeted advertisements) that produce one of the world’s largest fortunes.

Let’s go back to the audiovisual industry, and take the example of Netflix: “bandwidth”, i.e. the amount of network usage, is one of the main costs (Netflix uses the services of AWS, an Amazon subsidiary, for its broadcasting infrastructure). The more a movie is seen, the more it costs Netflix. In other words, the more views, the more money Netflix loses. This is exactly the opposite of the movie ticket system. Netflix’s revenue comes from the subscription, which allows for an unlimited number of viewings. Thus, those who watch the most movies are the users who cost Netflix the most money, and yet Netflix engages them to watch as many movies and series as possible... Which is completely inconsistent in a direct business model logic. On the other hand, in an indirect economic model, considered in the medium and long term, what will produce Netflix’s revenues is loyalty, the fact that people stay as subscribers and are more and more numerous to be so. What makes Netflix money is an economy that is deccorellated from the “sale” of each movie

We were told that this approach devalued the films. In reality it is the opposite, because what keeps people subscribing is the quality (or rather the satisfaction) of the audiovisual products they watch. Netflix’s angle of view, the heart of its working method, is the customer’s satisfaction and not the anxiety of “making money” on each movie. Thus, Netflix is constantly innovating (i.e., evolving its proposals, taking risks, making clear-cut choices), in the interface, in the extremely fine analysis of tastes with an algorithm that produces recommendations for new subjects (hence the creation of the “House of Cards” series, for example), in taking risks in terms of production, etc. There is no longer a “general public”, but an immensity of “niches”. Thus, Netflix offers very specific audiovisual products to specific niches, which therefore get all the more satisfaction from them. To be able to have this “agility”, Netflix employs quite atypical working methods. The Netflix CEO’s 2021 book “The Rule? No rules! Netflix and the Culture of Reinvention” is quite enlightening about innovation methods. But be warned, Netflix can’t “do everything”, it’s far from a place of perfect diversity.

Paths for a humanistic audiovisual market

We can thus see that the new uses of film lovers (in the sense of those who love) due to the ever-renewed technologies, are not a fundamental problem. On the contrary, it is a market that is opening up, that must absolutely be reinvented, as it goes along, in its modalities and even in its deep structures (for example, passing from the old direct economic models to the contemporary indirect economic models).

We know that technologies and uses will continue to evolve, and that we will always have to rethink our models. So, what to do? And how to do it? Here are some concrete proposals and methodological guidelines.

Move from the notion of the public to the notion of the spectator

If we focus on the user, on the client, rather than on ourselves, we will change our vision and our methods, to enter into a true “address to the other”. It is no longer a “public”, considered in a quantitative way, which will generate our revenues by its direct purchases. We move to an interest for the other, which we consider as enriching in the questioning that it allows us to make, constructive for us. It is to leave one’s comfort zone, to work on putting oneself in a position to question certainties and traditions sometimes so anchored that one believes that reality cannot be different. It means relying on spectators, getting to know them better, in order to better address them, to “serve” them (and not the opposite).
The technical tools of automation, the databases, the algorithms..., allow extremely precious help in this attention to the other and the evolution of the proposals, more and more adapted to the expectations of the spectators. This is not “marketing”, it is a deepening of the “relationship”, more and more personalized.

Long-term project planning and cultivating interdisciplinarity

It seems important to me to recognize that the economic development of audiovisual markets is 50% short-term and 50% long-term. Let’s not forget to consider the long-term economy as well. The conventional wisdom gives the impression that the long term is only a small part of the economy. No, in the age of the Internet, the long term is 50% of revenue. This is what Chris Anderson explains perfectly in his book « The Long Tail »-.
Thus, the question of “natural referencing” on the web is one of the keys: how to build the future existence of our audiovisual proposals in Internet searches, automated recommendations and social networks? It is through the good use of words that we write around the film. In short, the more you write / describe the film in detail, the better it will be referenced (this is a subject on which I had notably accompanied the Arte channel, within the framework of professional training).
Moreover, there is no opposition between the practice of cinema theaters and free viewing on the Internet. Going to the cinema is above all a “social experience” (whether collective or individual) articulated around a valuable content, the film. Watching a movie for free on the Internet is just accessing a content. The two have nothing to do with each other, contrary to what one might think. The movie theaters that reinvent themselves and continue to welcome a large and enthusiastic audience are precisely those that work on the specificity of their proposals around the films and the possibilities of their places: meetings with the teams, discussions, catering of various kinds, broadcasting of operas, video game tournaments, partnerships with other actors of the territory for crossed proposals, involvement of certain spectators in the programming, work on the before and after show, etc. This is a subject I am working on very explicitly, via the collective project of Research-action “Education aux images 2.1” that I have been carrying since 2017.
An example of an idea, around heritage films: I had noticed while working with Agnès Varda during her lifetime, that the people who illegally downloaded and shared her films were real enthusiasts, all over the world. If these people were valued for their tastes, their skills and their potential contributions to their passion, this could develop the commercial distribution of these films in more countries. For example, these viewer-amateurs could be encouraged (as is done spontaneously for series) to write and translate the subtitles of the films into many languages, and make the films known in other cultures. This could then lead to retrospectives, theatrical releases, exhibitions, publications...
We can see that many interdisciplinary synergies are possible to develop the economy of audiovisual creation, by relying on the spectators. This requires first of all that we listen to them.

Listen, understand, respect and engage the spectators

Behind the artistic-legal-economic questions lie, as always, visions of the world, ways of envisioning the “politics of relationship”. The listening, the understanding, the respect of the other, then the proposal of commitment, this “framework” which allows a constructive exchange for all, must come in my opinion from those who propose. Those who receive should not be dominated, but listened to and respected. If they have new uses because of new technologies, instead of being afraid and trying to punish them and make them feel guilty, we can choose to question ourselves. This is an opportunity to evolve and work towards the long-term sustainability of a funded, vibrant and renewed culture.
What is the “framework”? The framework is not the submission of some to others in coercive rules. The framework that allows the development of each person is a space of trust, which is built thanks to healthy and shared rules of the game, because they are discussed and questioned. Remember: in the games of our childhood, we spent more time talking to establish the rules of the game than playing. Because children are in the process of building themselves. I think we should never stop building ourselves. It’s an ethic.

In my opinion, the economy of culture, if it wants to be in coherence with the values of emancipation contained in the cultural objects that it promotes and sells, must be articulated around a humanist ethics. That is to say built around the listening and the respect of the other, even if this other is foreign to us, worries us, destabilizes us... The other always brings us an occasion to question ourselves, to evolve, to advance, to build. It is never comfortable. This is in complete harmony with the enrichment we receive from works of art, whose otherness sometimes upsets us, delights us, and always makes us grow.