Internet File-sharing, Illegal Movie Downloads and In-Theatre Camcording Continue to Plague Film Producers

Hollywood and the Digital Media Industry Turns to Technology to Help Reduce Global Movie Piracy
POINT ROBERTS, WA and DELTA, BC – May 15th, 2007– www.DigitalMediaStocks.com, an investor and industry news portal for the digital media sector, reports on issues of movie piracy and the escalating problems film makers face with Internet file-sharing, illegal downloads and in-theatre camcording. USA Video Interactive Corp. (OTCBB: USVO; TSX: US.V; Berlin: USF.BE; Frankfurt: USF.F), developer of anti-piracy products, discusses how they are providing Hollywood with digital watermarking technology to ‘embed the proof to catch the crooks’. Motion Picture Association of America, Inc. (MPAA) and Canadian Motion Picture Distributors Association (CMPDA) identify key drivers to the growing rates of piracy and explain their efforts as they continue to be strong industry voices calling for changes through education, innovative technology and stronger policies.

Over the past few years movie piracy has cost the film industry billions of dollars, with 2005 alone estimated at over $18 billion globally. These costs have made resolving this problem a key priority for many major Hollywood studios and industry participants who have seen the piracy problem taking a bigger and bigger share of their box office returns.

According to Elizabeth Kaltman, Communications Director, Motion Picture Association of America, Inc. “There are a number of factors that have led to the proliferation of film piracy in the U.S. and abroad. Improved technologies that enable faster downloads and file-sharing, combined with increased broadband width, enhanced infrastructure and accessibility have enabled millions more users to engage in on-line movie theft.”

Helping Hollywood to better protect their content is USA Video Interactive Corp. (OTCBB: USVO; TSX: US.V; Berlin: USF.BE; Frankfurt: USF.F), developer of anti-piracy products surrounding digital watermarking technology. The Company is currently working with a major Hollywood studio, recently delivering the first installment of its MediaEscort™ product specific for protecting content distributed over the Internet through the seamless embedding of SmartMarks.

For some regions around the world the lack of strict and prohibitive legislation has added fuel to the piracy fire. Canada in particular has been under the microscope as this area has become a major source for movie piracy and a thorn in Hollywood’s side. Warner Bros. Entertainment recently cancelled promotional public screenings in Canada in an attempt to minimize the number of illegal copies being made from this region and according to a company spokesperson will likely continue this trend throughout the summer for several of their blockbuster titles.

A major reason for many of Canada’s problems stems from the lack of adequate anti-piracy legislation. Mr. Serve Corriveau, Vice President, Anti-Copyright, Canadian Motion Picture Distributors Association describes, “In Canada, one of the things that we are trying to achieve is to get the government to pass a criminal law prohibiting camcording because currently there is no law against this.”

While movie piracy may never be fully eliminated, innovative technology has created valuable opportunities for reducing the problem.

Mr. Patrick Gregston, Business Development for USA Video Interactive Corp. explains, “The technologies that make piracy relatively easy are also technologies that enable a wealth of new opportunities. Over the last year, the leadership is starting to focus on those opportunities more. Watermarking is a relatively low cost, low resistance security function compared to the complex systems that go with rights management and encryption, the other leading approaches. Our SmartMarks enable transactions, does nothing to complicate usage or inhibit people from doing what they have always done and had the rights to do. Should an individual choose to violate that license, SmartMarks make it possible to provide proof that the content is not licensed for that use, and are accepted by western courts as such.”

A key component in the fight against piracy according to MPAA’s Elizabeth Kaltman is ensuring that consumers are able to get movies hassle free at a reasonable cost. “Studios are adopting new business models allowing them to get product to people using new technologies that allow consumers to see movies when and how they want,” states Kaltman.