Here is the State of the Industry address from Cinemacon.
From Cinemacon.
Hi everyone, I’m Charlie Rivkin, Chairman and CEO of the Motion Picture Association, and it is great to be back here at CinemaCon with all of you.
You’re some of the most fearless, driven, and visionary people working in our industry today, and I’m delighted to see our international exhibitors here – who have returned to Las Vegas after a two-year hiatus.
Despite the challenges we’ve all faced these past two years, I couldn’t be more optimistic and excited about our future for so many reasons: Not only the wonderful spectacle of everyone returning to CinemaCon in person, but also for the Motion Picture Association.
Because this year we are celebrating our 100th anniversary as the voice, and chief advocate of the film and television industry.
And what an important moment to celebrate our history, as this industry is demonstrating, once again, its amazing longevity and extraordinary resilience, after a devastating pandemic.
So today I want to share some stories about real people – day to day superheroes – who embody the inventive, “never-say-die” spirit that has built and sustained this industry, all the way back to the days of Thomas Edison.
And then I want to discuss what the MPA is doing for you, as we work to protect our industry from the existential threat of piracy.
One of my favorite stories about Edison, by the way, is when he was working on one of his many inventions and a friend of his (by the name of Mallory) came by to see how he was doing.
He told Mallory he’d been working on the project for five months.
They’d performed 9,000 experiments.
But so far, nothing.
“Isn’t it a shame,” said Mallory, “That with the tremendous amount of work you have done you haven’t been able to get any results?”
Edison turned to him with a smile, and said: “Results!
Why, man, I have gotten a lot of results!
I now know nine thousand things – that won’t work.”
Thomas Edison knew he wasn’t beat, and he ultimately went on to invent the Kinetograph and Kinetoscope, the foundational tools of our industry – enabling people to make movies and to project them.
And that relentlessly innovative spirit … That ability to meet setback – with success … that willingness to learn and evolve … has been the credo of our industry – from Day One.
Even during the pandemic, we showed our resilience, and our inventiveness.
We put together some of the best health and safety protocols of any industry, and we were able to return to production, and contribute to the economy, sooner than anyone thought -possible.
And when we did return to doing what we did best, our resurgence, was the real story of 2021.
That rang loud and clear, as we can see in the Motion Picture Association’s latest Theatrical and Home Entertainment Market Environment Report – better known as the MPA’s THEME Report.
Last year, according to THEME, the combined global theatrical and home/mobile entertainment market grew to $99.7 billion, a 24 percent increase compared to 2020, but also notably overtaking the pre-pandemic 2019 value.
That we came back and greatly surpassed the levels of 2020 – was no real surprise.
But given the challenges that we continued to confront, the fact that we came as close as we did to the pre-pandemic levels of 2019, (even surpassing it in some cases), – was nothing short – of remarkable.
Like Thomas Edison, our industry knew – it wasn’t beat.
We bounced back, and that rebound continues to move in the right direction.
In the first quarter of 2022, our domestic box office surpassed $1 billion.
And the resounding successes of “Spider-Man: No Way Home” and, more recently, “The Batman”, and “The Lost City”, have been a testament – to the continuing value of big theatrical openings – even – during challenging times.
Audiences have flocked to see these movies for a very simple reason: They want to be entertained!
They want to see great stories – well told on the big screen.
That is why I am so optimistic about this industry and the sacred connection between our MPA studios and every movie theater around the globe, from the Cathay Cineplex in Singapore to the Kino International in Berlin to the Colosseum theater – right here in Vegas.
Our industry will continue to lead the way in creating the next century’s most compelling (and innovative) stories and delivering them to audiences – around the world.
We are proud of our continuing and long list of global policy and legal victories – in support of creators, creative rights, and freedom of expression.
It is a fundamental rule, both in nature and in business, that change – is constant, and evolution – is our only option.
As Bob Marley once said: “You never know how strong you are, until being strong – is your only choice.”
Well, we’ve always recognized that maxim, and we have rediscovered that strength in ourselves – every single time … through cultural revolutions, paradigm shifts in technology, disruptions of entire industries, changes in consumer tastes and behavior, and seismic changes in business, and in distribution models.
And every time throughout our history, our industry evolved, and – we grew stronger.
Our Ratings System, (which has been successful for more than 50 years), shows just how closely we paid attention to those changes in public taste, while keeping faith with our audiences.
Since its inception, (in partnership with NATO), we have provided parents with clear, unbiased assessments of the movies before them, so that they can decide which ones are appropriate – for their families.
At the same time, our successful ratings system continues to evolve with the times, while continuing to protect the creative community from the never-ending threat of government censorship.
There’s another maxim in nature and business: Challenges – evolve.
Just as the pandemic shifted from one deadly variant to another, so too has one of the biggest existential threats to our collective future: -piracy.
And as today is, in fact, World Intellectual Property Day, fighting piracy is the main story I want to share with you this morning.
Piracy’s dramatic evolution, (and our equally dramatic response) is a compelling drama … with all the international intrigue and high-stakes action you’d see in any marquee movie.
The difference is, the perpetrators, (and the threat they pose to our industry), are very real.
We have no illusions about the scope and the severity of the problem.
For us to have any kind of meaningful impact, many things must continue to fall into place, including working with governments around the world to expand our pirate site-blocking efforts, and more broadly, driving a sea change in the consumer culture that understands why piracy harms – us all.
But today, I want to share the story of what our professionals are doing to combat piracy, on the enforcement side, which in my book, makes them, the real superheroes.
Let me give you an example that, I think, will resonate with every theater owner (and exhibitor) in this room.
Recently, we caught two perpetrators who were illegally recording first-week release movies in Houston and Seattle.
Our investigators had been monitoring their actions for quite some time, and we knew they were being paid by illegal Russian casinos, who planned to use the recordings to drive online traffic to their casino websites … such as the 1-ex-Bet website, including their affiliates in Cyprus – and around the world.
Working with law enforcement in the Seattle case, we convinced them to give up everything they know about their operations, their contacts, and methods of payment.
We are still working with law enforcement in Houston, and the case remains active.
But it’s important to understand that this type of cam-cording theft is only a small part – of a much bigger, and much more complex story.
You see, we’re no longer dealing with the piracy of Napster, music file sharing, and illegal DVDS sold off the street.
They’re gone, along with dial-up modems, shoulder pads and brick telephones.
Piracy is now a digital, global industry – with illegal websites and streaming subscription services run by operators all around the world.
One example is f.movies… the most popular streaming service in the world … 80 million visits a month … and half of those visitors come from the U.S.
… It’s actually more popular than the websites for Gmail and Grubhub, Starbucks and Major League Baseball.
These illegal streaming websites are incredibly sophisticated in terms of their online setup.
Many illegal streaming services come with subscriptions that cost $10 to $20 a month, offering Live and catch-up TV, pre-release, and post-release films (and television shows), live sports content – the full array.
And it’s often beautifully presented, with state-of-the-art navigation.
The people behind many these operations, however, are real-life mobsters.
Their piracy is often folded into other illegal activities like gambling, money laundering, tax evasion, drugs, grand theft auto, and prostitution.
They’re sophisticated and nimble and are ‘stream-ripping’ content with extraordinary speed and quality, and then making it immediately available to the entire world.
And these streams can be ripped (nowadays) in a matter of seconds.
They’re elusive too, with extensive operations spread across many countries … hosting servers in one country, and distribution networks in another … sometimes with rogue intermediaries in additional countries.
An industry this extensive, requires an equally powerful response – (maybe even the creation of the real-world equivalent of a Marvel Avengers team) ….
An organization that can combat piracy in a systemic way….
With resources, personnel, and a global network – with the reach and authority to work in real time, across time zones, and in different and challenging jurisdictions.
Well, ladies and gentlemen, that is exactly what the MPA – has built.
In 2017, we created the Alliance for Creativity and Entertainment – or ACE as we call it – a global coalition of our six MPA studios and the world’s biggest entertainment companies, including Apple TV+, and Amazon Studios …
AMC Networks … BBC and Canal Plus …
ACE members are now almost 40 strong, and we just added a new live, sports tier.
In fact, I’m proud – this morning – to announce that BeIN Sports, a Qatar-based sports broadcaster available in 41 countries around the globe, has signed on …
With other local partners in Europe, Asia, Latin America, and the Middle East soon to follow.
Our Chief Content Protection Officer heads an elite division of more than 100 top-of-the-line professionals, in everything from high-tech surveillance (and investigating) to cybersecurity, – and in close partnership with international organizations like: Interpol and Europol, – and a vast network of local law enforcement – around the world …
We have the sophistication, the capabilities, and the personnel to take on the full supply chain of pirated content.
And we are doing so with four kinds of tactical responses, which we deploy based on the urgency of the situation.
They range from the nice – to perhaps the not-so-nice.
The first tactic – at the nice end of the spectrum – is what we call in-person cease-and-desist operations.
We approach illegal operators with law enforcement, present them with concrete evidence of their illicit activity, and tell them – to stop.
We then encourage them to provide information about how their system works, who their customers are, and how they source – their content.
Just a month ago, we shut down three illegal Canadian streaming subscription services this way – services that offered more than 15,000 live channels, video on demand, and pay per view content.
And fewer than two weeks ago, we shut down an illegal subscription streaming service in Florida that attracted 200,000 visits per month and had as many as 50,000 active paid subscribers at any given time.
To be clear, that’s millions of dollars that will now be flowing in your direction (not the pirates).
For our second tactic, we build voluntary initiatives with the intermediaries in the global supply chain.
We do this to disrupt the hosting, the payments, the social media, and the advertising (among other things) that feed the illegal operation
When things are more hostile, we adopt the third tactic: filing civil cases.
We do this in countries around the world.
When those adversaries operate across borders (and jurisdictions), we resort to our fourth tactic: which is making criminal referrals.
We investigate and build extensive files of evidence against them from A to Z.
We provide those complete files to international organizations like Interpol, Europol, and local law enforcement authorities so they can take immediate action.
There are currently more than 200 such referrals in the pipeline around the world.
And you’ll be hearing a lot more about them in the months ahead.
In addition to ACE’s four-pronged response, the MPA and our member studios are employing another very effective strategy to piracy: combining site blocking and delisting of pirate sites.
Thanks to our new partnership with Google, we have removed 10,000 illegal domains from search results -across 10 countries.
As a result of this holistic approach to content protection, ACE is now a 24/7 service with formidable global reach, capable of deploying response teams in every corner of the world, at a moment’s notice.
We have taken down sites offering thousands of films and television series and receiving tens of millions of visits per month, from Peru to Pakistan to Singapore, and from Turkey to Tunisia to Morocco.
And in North America, from a high of 1,400 illegal websites and streaming subscription services in 2019, our antipiracy campaign has dramatically reduced that number to about 200.
Don’t get me wrong, there’s still a lot work to be done, and we are not stopping until that 200 number goes down to zero.
Four of the sites that we took down recently were on our Top 25 illicit streaming sites list.
In the final month before we shut them down, those four, together, were receiving 28 million visits per month.
Another recent development has fueled our momentum even more.
We recently concluded an agreement with the Department of Homeland Security (the first of its kind), that embeds MPA investigation experts inside DHS itself.
This kind of public-private partnership is a testament to our close relationship with law enforcement both in America, and around the world.
Ladies and gentlemen, ACE is harnessing the collective weight of the global industry and taking the fight against piracy to an unprecedented level.
This is what makes our people, and our partners, superheroes.
Before we came, there was no real coordination, far too much duplication of effort, and ultimately, no unified response.
Now, we’re really making a difference.
So, when people ask how successful ACE’s anti-piracy program is going, we point to any number of concrete examples…
Like the recent arrest of a man named George Bridi.
For 10 years, this British national ran a piracy ring called SPARKS, which stole major motion picture and television shows, and uploaded them on the internet before their official release date.
This was costing our industry incalculable damage.
Thanks to an extensive operation that included the Department of Homeland Security’s HSI division, the U.S.
Postal Inspection Service, Eurojust, Europol, and law enforcement partners in 18 countries on three continents, he was arrested in Cyprus, and brought to the U.S. where he was recently sentenced to 22 months in prison.
We are grateful to US law enforcement for taking our cases, bringing copyright charges, extraditing suspects, and bringing them – to justice.
Another recent success story is Operation Kripton in Madrid.
We worked with the Spanish National Police and other partners to bust a major piracy ring that was importing blank Android devices from China, preloading them with copyright infringing apps (and add-ons), then selling and shipping them to customers around the world.
The Spanish National police arrested six individuals, seized more than 24,000 of their illicit devices, as well as money, computers, and other assets like luxury sports cars and jewelry.
I was proud, (on behalf of the MPA and ACE), to receive the highest civilian honor, The Merit Cross (with Distinction in Content Protection) from the Director General of the Spanish National Police – recognizing our efforts working together to fight piracy and protect intellectual property rights.
We are stepping up security in what we call the ‘content life cycle’ as well.
During the passage of a movie or television show from its earliest pre-production stages to exhibition and beyond, many hands are involved.
And there are ample opportunities for leaks, hacks, and rips.
On average pre-release piracy can take away as much as 20% of box office revenue … your revenue.
A year after we established ACE, we created the Trusted Partner Network (TPN), a voluntary, cost-effective way for industry vendors to ensure that the security of their facilities, staff, and workflows meet the MPA’s best practices.
By establishing security benchmarks and security assessments for everyone in the supply chain, we are creating a gold standard for trust, accreditation, and security.
And with the right efforts to build awareness with consumers, lawmakers, and the media, we can continue to build a culture that recognizes piracy for what it is – theft, pure and simple, and a direct threat to creators, the creative workforce, and the creative community everywhere.
I’m encouraged by our progress in this ongoing fight against piracy, and I’m also encouraged by the surges (I mentioned earlier) that we are currently seeing at the global box office.
These current box office successes show that moviegoers still enjoy the sanctity and the social headiness of shared space …
They continue to appreciate the great seats, with good food choices, and of course that glorious big screen with its luxurious sound.
Ladies and Gentlemen, these are the stakes – as we move into our next century.
We need to continue to work together, to ensure that we walk towards this new future productively, and profitably … but also, to make sure that we continue to stay connected with the needs, and the expectations of our audience.
We can do this by remaining as technologically innovative, culturally influential, and economically impactful as we have ever been … ready to reimagine our way – into the foreseeable future – as we always have.
Thinking about the next century, I’m reminded of a quote from a Nobel Prize-winning scientist, who said: “The future cannot be predicted, – but futures can be -invented.”
That quote has been adopted and restated in many different ways.
But the wisdom is clear enough: The best way to predict the future – is to create it.
And for the next 100 years, this is exactly what our industry intends to keep doing, as we create this new future, together.
Thank you so much.
