NEW INDIE FILM MONETIZATION PLAN: SUING DOWNLOADERS

In a surprising Hollywood Reporter article, Eriq Gardner discovers a new indie film monetization scheme. He quotes Jeffrey Weaver of the D.C.-based U.S. Copyright Group who says of his company’s work, “We’re creating a revenue stream and monetizing the equivalent of an alternative distribution channel.”

Like many others in the indie community, Weaver’s efforts involve torrents. In his case, however, the company is not using torrent sites as a no-cost means of cultivating an audience but rather as objects of prosecution.

From Gardner’s piece:

In what may be a sign of things to come, more than 20,000 individual movie torrent downloaders have been sued in the past few weeks in Washington D.C. federal court for copyright infringement. A handful of cases have already settled, and those that haven’t are creating some havoc for major ISPs.

The lawsuits were filed by an enterprising D.C.-based venture, the US Copyright Group, on behalf of an ad hoc coalition of independent film producers and with the encouragement of the Independent Film & Television Alliance. So far, five lawsuits have been filed against tens of thousands of alleged infringers of the films Steam Experiment, Far Cry, Uncross the Stars, Gray Man and Call of the Wild 3D. Here’s an example of one of the lawsuits — over Uwe Boll’s Far Cry.

Another lawsuit targeting 30,000 more torrent downloaders on five more films is forthcoming, we’re told, and all this could be a test run that opens up the floodgates to massive litigation against the millions of individuals who use BitTorrent to download movies.

The piece goes on to detail propietary technology by the German company Guardaley IT that offers real-time monitoring of downloads. U.S. Copyright Group, which is comprised of intellectual property attorneys, uses this technology to offer services to its clients. From the group’s website (whose URL, by the way, is savecinema.org:

AT NO COST TO OUR CLIENTS, THE US COPYRIGHT GROUP WILL:
IDENTIFY ILLEGAL DONWLOADERS BY ISP ADDRESS
SUBPOENA IDENTIFYING CONTACT INFORMATION
SEND A CEASE & DESIST LETTER TO DEMAND PAYMENT OF DAMAGES
OBTAIN SETTLEMENT OF APPROXIMATELY $500 – $1,000 PER INFRINGER & PROMISE TO CEASE FUTURE ILLEGAL DOWNLOADING
PROCESS SETTLEMENTS & PROVIDE RECORDS TO THE CLIENT
DISBURSE CLIENT’S PORTION OF THE DAMAGES
ALL SERVICES PROVIDED ON A CONTINGENCY OR FLAT-FEE BASIS AT NO COST TO THE CLIENT

Let’s do the hypothetical math on the case described in the THR article. The U.S. Copyright Group files lawsuits against “tens of thousands” of downloaders. The THR says “more than 20,000.” Let’s say 25,000. They settle for between $500 – $1,000 per infringer. Say $750. Total revenues: $18,750,000. Say the U.S. Copyright Group takes a standard one-third contingency fee. That leaves $12.5 million going to the copyright holders. According to iMDB, Far Cry grossed about $900,000 in its German theatrical release. Call of the Wild 3D‘s total gross appears, again according to iMDB, to be about $29,000. I can not find financial details on the other films. The website for Uncross the Stars, for example, does not list distribution information for the Barbara Hershey-starrer, and the first critics group quoted is the National Senior Living Providers Network (“”A rare treat…that makes the audience laugh and cry.”) If the Hollywood Reporter article is complete and those five films were the sole plaintiffs, and indeed those numbers are the sum total of their theatrical box office (and, of course, if my estimates are correct), then U.S. Copyright Group gained its clients a 1,350% dividend on the films’ theatrical play! (Tongue partially in cheek here as it’s clear that these films were not necessarily produced for the theatrical market.)

Who needs P&A, VOD, and day-and-date when you can sue downloaders?