Film piracy is one of the largest economic threats to the US motion pictures industry, costing US movie studios over $6 billion a year and the global film industry more than $18 billion a year. About three-fifths of this loss is due to DVD piracy while the other two-fifths can be attributed to online piracy. According to the Congressional International Anti-Piracy Caucus, the annual cost of global piracy to all US firms in lost sales totals about $25 billion. The US film industry supports 2.4 million American jobs—the majority of which are not high-paying starring roles, but involve behind-the-scenes work at modest wages—and contributes more than $80 billion per year to the US economy. Piracy results in the loss of more than 46,000 movie industry jobs per year and more than 94,000 jobs in other sectors that would have otherwise been generated.
In addition to the negative economic ramifications, a 2009 RAND study found strong links between film piracy and organized crime groups, which often use profits from pirated products to fund other criminal activities. Piracy is an attractive activity for organized crime groups because it is high in profit and low in risk, with DVD piracy having a higher profit margin than even narcotics. Criminal revenues are also fungible and proceeds from piracy can easily fund other criminal activities such as drug smuggling and human trafficking. The RAND study states that piracy is often falsely viewed as a victimless crime, but actually often has close connections with more violent crimes. For example, people trafficked illegally across borders are sometimes forced to sell pirated goods like DVDs in order to pay off gangs involved in human trafficking. Although there is less data on this, three of the documented case studies in the RAND report also provide evidence that terrorist groups have used film piracy profits to fund their activities.
Law enforcement agencies have already taken action in combatting this problem in the last few years. For example, Immigration and Customs Enforcement (ICE) has targeted websites selling pirated products and in 2010, ICE agents in an operation nicknamed “Operation In our Sites” seized over 60 domain names of websites peddling pirated films, and engaged in a series of other actions to stem the sale of pirated films and TV programs. The targeted websites had links to more than 200 films and 300 TV programs that had been illegally pirated. In addition, the NYPD and LAPD have made anti-piracy actions a priority given the importance of the film and TV industries to their respective cities’ economies. Both departments have launched
specialized anti-piracy units to target large manufacturers and distributors of pirated films. The LAPD also has formed the Los Angeles Anti-Piracy Task Force—which has acted as a clearinghouse for the region’s anti-piracy efforts—in conjunction with the offices of the LA County Sheriff and the LA District Attorney.
Despite these efforts, more global intelligence and data gathering will be necessary to further target film piracy and its connections with organized crime. As more data is collected on film piracy and organized criminal groups, advanced analytic platforms like Palantir can be of use by allowing law enforcement officials to make links between counterfeiters, organized criminals, and the flow of illegal funds and pirated goods. This will help save the US economy billions of dollars and thousands of jobs a year, in addition to stemming the activities of organized crime groups.