Yesterday, the Motion Picture Association of America (MPAA) released results of what it called a "worldwide" study on movie piracy through downloading. This self-serving release is obviously crafted to paint a scary picture, and the methodology isn't well explained. (By world, for instance, the MPAA means eight countries.)
Still, results from the U.S., U.K., France, Germany, Japan, Australia, Italy, and Korea -- especially Korea -- offer a glimpse of the struggles facing moviemakers such as Time Warner (NYSE: TWX), Lions Gate Entertainment (NYSE: LGF), and Sony (NYSE: SNE).
In short, everyone wants everything for free, and many people are willing to steal, as long as it's done online, anonymously, and there's little risk of being caught.
Almost 25% of Internet users have downloaded a movie -- in Korea, it spikes to more than 50%. And the unstated assumption is that we're talking illegal downloads, since video-on-demand (VOD) services like those in the works from RealNetworks (Nasdaq: RNWK), Netflix (Nasdaq: NFLX), and Motley Fool Stock Advisor pick TiVo (Nasdaq: TIVO) are either brand new or vaporware.
Here's the bummer for the MPAA. Of the pirates, 25% say they go to the movies less often, and 50% of the Korean file grabbers have curbed their trips to the Googolplex. Among non-pirates, the major deterrents were fear of John Law, long download times, and poor quality of the bootlegs. But, in these three findings, there is hope for the nascent VOD industry.
Despite the screams of so-called technology advocates, it looks like congress may finally put its boot on the neck of pirate enablers like Kazaa and Grokster. If that curbs rampant file-theft, then the movie industry, together with content delivery specialists such as RealNetworks, TiVo, Netflix, and (dare I add?) Apple (Nasdaq: AAPL), has golden opportunity.
Technology is still several years from delivering a DVD-quality downloaded movie to our computers within minutes. Someone out there needs to find the sweet spot where video quality, price, and download time intersect. Clearly, people are willing to accept a loss of fidelity to view cheap flicks on their computers. The question is who's going to make it easy, find the right price, and make money in the process?
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Fool contributor Seth Jayson prefers getting his flicks in the mail. He has no position in any firm mentioned. View his Fool profile here.
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