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March 21, 2016

Creative Content Hits Back at Internet Australia on Internet Piracy, Site Blocking

IPI expert referenced: Tom Giovanetti | In The News | Media Hit

By Peter Dinham

The peak body for the promotion of copyright, creative rights and piracy research, Creative Content Australia, has hit back at Internet Australia chief Laurie Patton over what he said were accusations of Australians being “rampant Internet pirates”.

Creative Content Australia Executive Director Lori Flekser said “Mr Patton claims that Internet Australia does not condone piracy but he continues to trot out tired and oft-repeated justifications for piracy without a shred of research or evidence to back them up”.  

Flekser was responding to Patton’s comments on a statement by the newly appointed chairman of Creative Content Australia Graham Burke and what he (Patton) sees as Creative Content’s over-zealous approach to eliminating online piracy.

Patton had said, “Mr Burke may be 'on a mission', but what mission exactly? Australians pay nearly double the price to go to the cinema as Americans. We have traditionally been slugged more for DVD's and music downloads. Now we are being accused of being rampant 'Internet pirates' despite a lack of any concrete evidence that unlawful downloading of content is actually causing the rights holders significant financial losses in Australia.”
“Actually, this is simply not true,” Flekser said of Patton’s comments on Graham Burke’s “mission”. 

“I urge Mr. Patton to look at the Deakin University research from 2015 which charts the average ticket price across all OECD countries, measured in terms of the opportunity cost of the amount of average hourly earning time required to pay for a cinema ticket. It shows that our opportunity cost to see a film measured in temporal terms (40.7 minutes) is remarkably close to the OECD average of 41.9 minutes.

“Similarly, in home entertainment, 2015 AHEDA (Australian Home Entertainment Distributors Association) research of local and international EST and VOD prices shows that Australia compares favourably to many other international territories, for example, a new release SVOD title at A$4.25 vs $5.00 in the UK or $4.91 in NZ.”

In her response, Flekser also said of Patton’s claim that Internet Australia does not condone piracy that “Creative Content Australia ensures that such myths and misconceptions are countered with local and global empirical research and maintains that creators - just like other workers in our economy - should determine how to distribute and monetise their work and are entitled to the fruits of their efforts.” 

Flekser said that Creative Content Australia is the peak body for the promotion of copyright, creative rights, piracy research and education resources, and the organisation’s annual research “underpins the debate about illegal content with facts”. 

“It seeks to raise awareness about the value of creative content and the impact of illegal access on the creative industry.  I’m keen to understand how Mr Patton sees that as a ‘zealous approach’ to eliminating online piracy.”

On Patton’s comment that the simple solution to most of Australia's unlawful downloading is “simply for the rights holders to make stuff more easily available (which is happening with Netflix, Presto and Stan) and stop price gouging”, Flekser is sharply critical of Patton.

“Access and price are not the answer to diminishing piracy.  If we look at the music industry, which offers literally hundreds of sites offering music at low or NO cost, the number of infringing downloads grew in 2015 - (”

Flekser goes on to say that “there are over 30 licensed online music services in Australia offering every genre of music to fans across a variety of platforms and devices at a range of price points, including free with ads. 

“Worldwide there are over 500 licensed music services. Yet according to the IFPI Digital Music Report 2014 approximately 26% of internet users worldwide regularly access unlicensed services.

“Mr. Patton concedes that content is being made available faster, but is he aware that piracy spikes by up to 300% for many titles when they become available on VOD and DVD/blue-ray?,” Flekser asks. 

“One need only examine the seismic shift in content delivery technological changes and business models to see this – from “fast-tracking” of TV content and growth of subscription services, to the digitisation of cinemas and the gradual erosion of windows.

“And as Tom Giovanetti, President of the US Institute for Policy Innovation says, “Patronising suggestions that creators should “innovate” away their problems is an unhelpful contribution adding nothing to discourse about solutions to piracy…  Content owners ARE innovating. They also want their product protected against massive theft. It’s not a matter of either/or—it’s a matter of both/and.”

For good measure, Flekser says that the “myth perpetuated by the blogosphere and consumer groups”, is that content is not provided to Australian audiences at the same time as overseas audiences. 

And, she list the top 10 grossing films of 2015 and the comparative release dates in the US and Australia, and the fact that nine of the 10 films opened in Australia before the US:

Film Title/Release Date Australia/Release Data USA – 

1 STAR WARS: THE FORCE AWAKENS 17/12/2015 18/12/2015 1 day earlier

2 JURASSIC WORLD 11/06/2015 12/06/2015 1 day earlier

3 FAST AND FURIOUS 7 2/04/2015 3/04/2015 1 day earlier 

4 THE AVENGERS: AGE OF ULTRON 23/04/2015 1/05/2015 2 weeks 

5 SPECTRE 12/11/2015 6/11/2015 1 week later 

6 MINIONS 18/06/2015 10/07/2015 3 weeks 

7 INSIDE OUT 18/06/2015 19/06/2015 1 day earlier 

8 THE HUNGER GAMES: MOCKINGJAY PART 2 19/11/2015 20/11/2015 1 day earlier 

9 PITCH PERFECT 2 7/05/2015 15/05/2015 1 week 

10 THE MARTIAN 1/10/2015 2/10/2015 1 day earlier 

“Of course there are exceptions. Long-standing contractual licensing arrangements can occasionally confine access to a particular distributor or exhibitor for a specific show.  The content is not “unavailable” – it’s simply available via one particular channel,” Flekser further explains.

“Most channels have been making it increasingly simple to access just one particular show: as Foxtel did with Game of Thrones from Series 4 in 2014.  Non-Foxtel subscribers could sign up to Foxtel Play on a month by month arrangement (no lock-in contracts) and could watch shows on 3 devices. Previous series were available on catch up at no additional cost and the episodes were aired in Australia within an hour of the US broadcast.  
“People forget that GoT is available in the USA to HBO subscribers only,” Flekser says. “So those with a Netflix account would also need another service to legally watch GoT.

“How would Mr. Patton explain that Americans were the 2nd highest infringers of Season 3 of House of Cards in 2015 – despite Netflix being available for less than $10 per month?  It’s not access, it’s not availability, it’s not price.  It’s about “FREE”.

“Even the Department of Communications 2015 research confirmed that ‘free’ content was cited as the major reason for content theft by 55% of Australians.”

On Patton’s comments that “Australia is not on the International Intellectual Property Alliance 'watch list' because #WeAreNotTheProblem,” Flekser says:

“The Watch list identifies markets that exemplify global counterfeiting and piracy concerns.  It’s not simply about the number of people in the country who stream or download infringing content, but identifies countries with weak IP laws or inadequate copyright protections: countries that host or legitimise counterfeit activities.  This includes countries that manufacture fake drugs, or host The Pirate Bay.  Australia has increasingly strong copyright laws, particularly since the introduction of site-blocking and reasonable enforcement measures - that is why they are not on the list. 

“Australians are amongst the highest per capita illegal downloaders of content. In 2012, website Torrent Freak published piracy figures for Game of Thrones which revealed over 10% of the show’s entire illegal downloads originated in Australia, a nation of just 23 million people. America, with a population of 313 million, came in at 9.7%.” 

And, in a response to Patton’s comment that: “A federal government survey last found that high use "pirates" are also high users of paid-for content,” Flekser has this to say:

“I’m not sure how this is relevant. Is Mr. Patton saying that it’s ok to pirate if you occasionally access legitimate content?  Is it OK to steal an apple from the grocer where you usually buy your fruit and vegetables?,” questions Flekser. 

Flekser concludes with a comment on Patton’s statement that: “We do not condone unlawful downloading. However, we draw the line at unworkable solutions like site-blocking because they interfere with the open and trusted essential nature of the Internet. They cause operational issues that can lead to interruptions in service, like the ASIC case a few years ago where they inadvertently put 250,000+ innocent sites offline for several days."

On site blocking, Flekser disagrees with Patton’s comments about the workability of the solution..

“Site-blocking in not an unworkable solution.  It has been adopted by 32 countries – 28 of which are EU member states.  13 countries have successfully had site-blocking cases processed through the courts.  

“While we have always acknowledged that there is no ‘silver bullet’, research by Carnegie Mellon University in 2015 (The Effect of Piracy Website Blocking on Consumer Behaviour) shows that persistent website blocking of a number of piracy sites has effectively migrated pirates to legal channels.  

“In the UK, research comparing site visits in February 2014 to one month prior to each of the site blocks, found that visits to all of the blocked sites declined by more than 90% (Alexa and ComScore Data – ‘Impact of Third Party Orders on Traffic to Infringing Sites’).”


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