NY Times: Mainstream Studios Losing to Digital Pirates

NEW YORK - Hollywood studios are losing the battle against online copyright infringement, according to a front-page report in today's New York Times.

According to the story, illegal copies of Warner Bros.'s The Dark Knight were downloaded 7 million times over a six-month period, despite what the studio thought was an extensive anti-piracy plan.

The Times suggested Hollywood may be having its "Napster moment," referring to the crossroads the music industry came to several years ago.

Industry insiders believe the future of entertainment will follow the model of the music industry, as video sales shift to downloads. But where is the iTunes for movies?

According to CNN, more than 1 million XBox users have activated a Netflix application for an annual fee in order to legally download films and television shows. Last year, Apple's Apple TV set-top box was updated so that music, TV shows and select films could be purchased or rented from its iTunes Store.

The Times story said 2008 DVD shipments were at their lowest levels in five years. Many sources blame the glut of torrent sites and online "link farms"for the slump.

The problem is also generational.

"Young people, in particular, conclude that if [downloading] is so easy, it can't be wrong," NBC Universal Counsel Richard Cotton said.

The lawyer cited YouTube's use of filters and digital flags as a step in the right direction for tube sites that offer free content without permission from copyright holders.

A recent study by the Motion Picture Association of America claims illegal downloads and streams are responsible for roughly 40 percent of lost revenue.