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Lack Of Copy Protection Costs Home Video Nearly $1B Annually

A lack of comprehensive of copy protection technology has resulted in movie studios, producers and distributors of video content losing almost $1billion a year in retail revenue, nearly 5 percent of the $20.6 billion home video industry according to a study sponsored by Macrovision.

The company estimates that 75 percent of movies/music video and other material released on DVD and videocassettes use its copy protection technology, which thwarts DVD-to-VHS copying and prevents DVD-to-DVD-R, DVR and home media center/PC hard drive recording as a means of inhibiting internet file sharing. Video titles left unprotected by content providers against unauthorized copying are most at risk according to the study.

More than 25 percent of respondents admitted to making copies of pre-recorded video content in the last year. Survey results indicated that those who admitted to unauthorized copying would otherwise have rented or purchased specific titles.

"With new, less-expensive products equipped for DVD-to-DVD video copying arriving in home entertainment stores soon, the popularity of combination DVD/VCR units and other advances in high-quality video and computing technology, leading video content companies are continuing investments in copy protection to counter the rising threat of casual piracy among consumers," said Carol Flaherty, senior vice president of Macrovision's Entertainment Technologies Group. "Surveys show that over 50 percent of respondents have copied music CDs, and over 40% would copy DVDs if they could." Flaherty said the video rights owners intend to prevent further financial damage to the music industry by digital piracy.

Revenue losses related to home copying in Western Europe mirror those in the U.S., with an annualized rate of $779 million to $1.25 billion. Western Europe's VCR household base is approximately 20 percent larger than the U.S., with 20-25 percent lower DVD penetration that the U.S. The European survey results suggest moderately higher copying trends among consumers.