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(CBS) SummerhasalwaysbeenaprofitableseasonforHollywood,asmillionsofpeoplebuyticketstoseenewblockbustermovies.

ButthissummerisalsoatimeofworryandfearforAmerica'sfilmstudios,becausethepiratesoftheInternetaregainingonthem.

AlmosteverynewfilmcannowbefoundontheInternet--anddownloadedforfreeassoonasit'sreleased,andsometimesevenbefore.

AsCorrespondentLesleyStahlfirstreportedlastyear,itmaybeillegal,butit'sbecomingeasierandeasiertodo.

ThepeoplerunningAmerica'smoviestudiosknowthatiftheydon'tdosomething-fast-theycouldbeinthesameboatastherecordcompanies.

Butwhat'sreallyatstakeforthemovieindustrywithallthispiracy?

?

Ultimately,ourabsolutefuture,?

saysPeterChernin,whoruns20thCenturyFox,oneofthebiggeststudiosinHollywood.

HeknowsthepiratesoftheInternetaregainingonhim.

?

Ithinkit'sprobablyinthehundredsofthousands,ifnotmillions,?

saysChernin.?

It'sonlygonnagrow.SomebodycanputaperfectdigitalcopyupontheInternet.Andwiththeclickofamouse,sendoutamillioncopiesallovertheworld,inaninstant.?

Andit'sallfree.Cherninorganizeda"summit"betweenstudiomogulsandsomehighschoolandcollegekids--thepeoplemostlikelytobedownloading.

?

Andwesaid,?

Let'scomeupwithachallenge,'?

saysChernin.?

Let'sgivethemfivemovies,andseeiftheycanfindthemonline.Andweallsataroundandpickedfivemovies,fourofwhichhaven'tbeenreleasedyet.Andthenwecamebackhalf-an-hourlater.Theyhadfoundallfivemoviesthatwegavethem.?

Didthesekidshaveanysensethattheywerestealing?

?

Ithinktheyknowit'sstealing,andIdon'tthinktheythinkit'swrong,?

saysChernin.?

Ithinktheyhaveanattitudeof,?

It'sthere.?

?

AnInternetcopyofthehitmovie,"Signs,"starringMelGibson,wasstolenevenbeforedirectorM.NightShyamalancouldorganizethepremiere.

Infact,Shyamalansaidthefirstbootlegcopyappearedafewweeksbeforethepremiere:

?

BeforetheInternetage,whensomebodybootleggedamovie,theonlyoutlettheyhadwastosellittothosevendorsonTimesSquare,wheretheyhadtheboxessetupoutsideandtheysay,?

Hey,wehave"Signs"-it'snotevenoutyet.?

Andyouwalkbyandyouknowit'sillegal.Butnow,becauseit'sthedigitalage,youcanseeacleancopy.It'snolongerthekindofthesleazyguyinTimesSquare,withthebox.It'sjust,oh,it'sonthisbeautifulsite,andIhavetogo,?

Click.?

"

Sohowdidthishappen?

?

Throughanabsoluteactoftheft,?

saysChernin.?

Someonestealsaprintfromtheeditor'sroom;someonestealsaprintfromtheperson;thecomposerwho'sdoingthemusic...stealsaprint,makesadigitalcopy,anduploadsit.?

Digitalcopieslike"TheMatrixReloaded"havealsobeenbootleggedfromDVDssenttoreviewersoradagencies,orcirculatedamongcompaniesthatdospecialeffects,orsubtitles.

?

Theotherwaythatpre-releasedmoviesendup(stolen)isthattherearelotsofscreeningsthathappeninthisindustry,?

addsChernin.?

Peoplegotothosescreeningswithacamcorder,withadigitalcamcorder,sitintheback,turnthecamcorderon...?

Itusedtotakeforevertodownloadamovie,butanyonewithahigh-speedInternetconnectioncannowhaveafull-lengthfilminanhourortwo.

Infact,therearemanyWebsiteswherehackerswillannouncetheirpiracyreleases,saysRandySaaf,whorunsacompanycalledMediaDefenderthathelpsmoviestudioscombatonlinepiracy.

StahlaskedhimtoshowherKazaa,whichhecalls"thelargestpeer-to-peernetwork.?

It'scalledpeer-to-peerbecausecomputerusersaresharingfileswitheachother,withnomiddleman.AllKazaadoesisprovidethesoftwaretomakethatsharingpossible.When60MinuteswentonlinewithSaaf,nearlyfourmillionotherKazaauserswerealsothere,sharingeverykindofdigitalfile.

?

Audio,documents,images,software,andvideo.Ifyouwantedamovie,youwouldclickonthevideosection,andthenyouwouldtypeinasearchphrase,?

saysSaaf.?

Andbasicallywhatthisisdoingnow,itisaskingpeopleonthepeer-to-peernetwork,?

Whohas'FindingNemo'?

"

Withinseconds,191computerssentananswer:

"Wehaveit."

Withcrisppictureandsound,?

FindingNemo?

wasdownloadedfreefromKazaaamonthbeforeitsreleaseforvideorentalorsale.

Andnow,youdon?

tevenhavetowatchamovieonalittlecomputerscreen.Onthenewestcomputers,youcanjust"burn"themovieontoaDVDandwatchitonyourbig-screenTV.

Andthat'sadaggerpointedrightattheheartofHollywood.?

WheremoviesmakethebulkoftheirmoneyisonDVDandhomevideos,?

saysChernin.?

Fiftypercentoftherevenuesforanymoviecomeoutofhomevideo...sothatifpiracyoccursanditwipesoutyourhomevideoprofitsorultimatelyyourtelevisionprofits...?

Andasmoviescontinuedtobemade,Shyamalansaystheywouldn'tbeanygood,becauseprofitswouldbenegligible,sobudgetswouldshrinkdramatically:

?

Andslowlyitwilldegradewhat'spossibleinthatartform.?

?

Technologyalwayswins.Always.Youcan'tshutitdown,?

saysWayneRosso,Hollywood'senemy.Theycallhimapirate,butofficiallyhe'sthepresidentofGrokster,anotherpeer-to-peernetworkthatworksjustlikeKazaa.

60MinutesdownloadedGrokster?

ssoftwareforfreeandaskedRossoquestionsabouthisnetwork.

?

We'relikeradio.We'readvertisingsupported,?

saysRosso,whoestimatesthat10millionpeoplehaveusedGrokstereachmonth.

Hesayshehasnowayofknowingwhatpeoplearedownloading,?

andwecan'tstopit.Wehavenocontroloverit.?

AndRossohasthelawonhisside.AfederaljudgehasruledthatGroksterandotherfile-swappingnetworksarenotliableforwhattheirdownloadersaredoing.

?

Sowe'recompletelylegal,andunfortunatelythisissomethingtheentertainmentindustryrefusestoaccept,?

saysRosso.?

Theyseemtothinkthejudge'sdecisionwasnothingbutatypo.?

Thestudiosareappealingthatcourtruling.Andtheymayfollowthemusicindustryandbegintosueindividualswhodownloadmovies.

Butthey'realsofightingthepiratesinotherways,withadsaboutpeoplewhosejobsareatriskbecauseofthepiracy-peoplelikethecarpentersandpainterswhoworkonfilmsets.

Atthesametime,Hollywoodistryingtokeepcopiesofmoviesfromleakinginthefirstplace.

?

Youwillveryseldomgotoanearlyscreeningofamovierightnowwheresomeone'snotinthefrontofthatauditoriumwithinfraredbinocularslookingforsomebodywithacamcorder,?

saysChernin.

Andonceamovie'sreleased,orifcopiesbegintoleak,thestudioshirepeoplelikeRandySaaftohackthehackers.

?

Whatwe'rejusttryingtodoismaketheactualpiratedcontentdifficulttofind.Andthewaywedothatisby,youknow,servingupfakefiles,?

saysSaaf.

It'scalled"spoofing,"andSaafandhisemployeesspendtheirdaysonKazaaandGrokster,offeringupthousandsoffilesthatlooklikecopiesofnewmovies,butaren't.

?

Itmightjustbeablankscreenorsomething,?

saysSaaf.?

Typicallyspeaking,whatwepushoutisjustnottherealcontent.?

ButRossosaysitwon?

twork:

?

Itdoesn'tworkbecausewhathappensisthatthecommunitycleansesitselfofthespoofs.?

Whathemeansisthatdownloaderswillquicklyspreadthewordonlineabouthowtotellthefakemoviefilesfromtherealthing.

?

It'slikeanarmsrace,?

saysChernin.?

Therewillbe,youknow,they'regonnagetastepahead.We'regonnatryandgetthatstepback.?

?

ButI'lltellyouonething:

I'llbetonthehackers,?

saysRosso,whobelievesthehackerswillbreakwhateverblockthestudioscomeupwith.

HollywoodknowsthatdownloadingofftheInternetisthewaymillionsofconsumerswanttogettheirentertainment--andthatisn'tgoingaway.

?

Thegenerallyacceptedestimateisthatmorethan60millionAmericanshavedownloadedfile-sharingsoftwareontotheircomputers,?

saysChernin.?

That?

samainstreamproduct.That'snotabunchofcollegekidsor,youknow,abunchofcomputergeeks.That'sAmerica.?

So,insteadoftryingtostopitentirely,thestudiosarelookingforwaystoembraceit,butalsogetpaid.

Rossosaysthebestwayistonegotiatesomekindoflicensingdealwithhim.AndhesayshewouldsellGrokstertoamoviestudioinaheartbeat:

?

Ifthemovieindustryactsnowandstartsexploringalternativesandsolutionswithguyslikeme,hopefullytheywon'thaveaproblem.?

TheideaofmakingdealswithwhatChernincalls"abunchofcrooks"doesn'tappealtoHollywood.Instead,Foxandtheotherstudioshavejustlaunchedtheirownsite,Movielink,whereconsumerscandownloadafilmforamodestfee,betweenthreeandfivedollars.

?

Ithinkyouwouldlovetheideathatyoudon'thavetogotothevideostore.Youcandothis,?

saysChernin.?

Andthat'swhatwe'reworkingon.Butinorderforthattobeeffective,wehavetostoppiracy,becausethemosteffectivebusinessmodelintheworldcan'tcompetewithfree.?

Themoviestudiosmaybegintofiletheirlawsuitsagainstindividualdownloadersbeforetheendofthissummer.

DirectorM.NightShyamalan'snewfilm,"TheVillage,"premieredonJuly30.ThefirstbootlegcopyofthemovieappearedontheInternetthenextday.

Since60Minutesdidthisstory,RossoannouncedhewasleavingGrokstertotakeoveraspresidentofanotherbigfile-swappingsoftwarecompanybasedinSpain.Groksterwastocontinueundernewmanagement.

 

(CBS) It'snosecretthatonlinepiracyhasdecimatedthemusicindustry,asmillionsofpeoplehavestoppedbuyingCDsandstartedstealingtheirfavoritesongsbydownloadingthemfrom

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