Intellectual property piracy is a big and ever-growing problem. Superheroes, as we've seen in the movies based on the Marvel Comics characters Iron Man, Captain America, The Hulk and Thor, can win the fight against giant wormlike creatures from outer space, sinister conspiracies inside government security agencies, gods from other realms, and artificially intelligent cybermen trying to bring about the end of the world. But even they can't defeat the plague of intellectual property pirates populating the Internet. Every year, every day even, millions of dollars in U.S. investment and productivity are lost to criminals who illegally reproduce, sell, retransmit or restream creative content they have stolen from those who developed it or are otherwise licensed to produce it. The funds derived from such activities not only help support criminal cartels but, according to former Obama national security adviser Gen. James Jones (ret.), go toward supporting the activities of terrorist groups like al-Qaida and the Islamic State group. Even U.S. Secretary of State John F. Kerry, who does not always come across as the brightest bulb in the chandelier, admitted this is a problem, identifying it Monday in a speech he made in South Korea on five essential principles of international cybersecurity. How big is the business? According to the Digital Citizens Alliance in its just-released report "Good Money Still Going Bad," ad supported piracy alone is very big and, unfortunately, very much an area where the prospect for continued growth is high. The alliance said that the 589 sites in its 2014 "snapshot" of what's out there were responsible for more than $200 million in estimated aggregate annual revenue just from advertising. Not only are these sites economically damaging, they threaten the infrastructure of home computing. At least one-third of the sites "included links with the potential to infect users' computers with viruses and other malware." Most significantly, and something worthy of the attention of Congress as well as the Federal Trade Commission and the relevant portions of the Departments of Justice and Homeland Security, MediaLink researchers identified more than 125 ads for "premium brands" on these sites alongside those peddling phony generic Viagra, lonely housewives looking for a fling and internationally famous designer shoes at unbelievably low prices. As the Digital Citizens Alliance put it, "Ad revenue is the oxygen that allows content theft to breathe," yielding enormous profits (since the owners of the site do not have to pay the true price for the goods they are selling) at little risk because, let's face it, intellectual property theft is not something law enforcement outside the United States tends to take seriously. In fact, sometimes they're even in on it. This means the real effort at combating intellectual property piracy has to come from inside our own borders. Unlike the trafficking in drugs or even the trafficking in persons, the merchandising, reproduction and streaming of copyrighted and trademarked materials doesn't generate the level of interest needed to make a dent in the problem. Failure to address this problem before it grows worse will take a goodly sum out of future U.S. gross domestic product. The Internet Movie Database estimates Disney spent $250 million producing "Avengers: The Age of Ultron," creating thousands of jobs on set and off screen. Add to that the marketing costs, which can cause the cost of a movie to double before it appears on even one screen outside the studio. According to someone familiar with the motion picture industry, only two out of every 10 movies recoup their investment at the box office and only four in 10 make a profit after all the ancillary revenue streams like product placement and streaming rights are factored in. So one studio, in this case Disney, put at risk nearly $400 million in up front capital on a job-creating, GDP enhancing project for release in the global market that, instead of taking in nearly $200 million dollars from U.S. and Canadian filmgoers on its opening weekend, could have gone bust if the intellectual property pirates could have figured out a way to hack into the corporate computers, steal a digital copy of the movie and stream it over the Internet from their pirate lairs for $5 on opening night. No one outside the permanent American criminal class would countenance such a thing if the subject was bank robberies or stock fraud or knocking over jewelry stores. Films do not just provide good entertainment value, they provide actual value to the U.S. economy. So do video games, music, software and other digital items that can be easily stolen and easily resold. It's a multi-million, perhaps even multi-billion, dollar problem that we unfortunately can't depend on the Avengers or S.H.I.E.L.D. to solve.
