Copyright Piracy Costs America up to $71 Billion: Hollywood Producer Ruth Vitale Speaks Out

Ruth Vitale, Oscar-winning producer and CEO of Creative Future, reveals the devastating impact of copyright piracy on America's entertainment workforce. Piracy costs the economy up to $71 billion annually and threatens 560,000 jobs across film and television. Ruth explains how small business IP protection matters for the 122,000 companies serving Hollywood, why copyright law basics must evolve for the digital age, and what IP protection strategies could save the industry. From malware risks on pirate sites to AI's threat to actor rights, this conversation exposes hard truths about intellectual property education and the urgent need for site blocking legislation.

Key Takeaways:

• Piracy costs the US economy between $29 to 71 billion annually
• Film and television employ 2.3 million Americans (down from 2.7 million)
• 92% of entertainment businesses employ fewer than 10 people
• Google receives 58 million takedown requests weekly—yet pirate sites flourish
• 60 countries have site blocking laws; the US does not
• Visiting pirate sites carries a 30%+ risk of downloading malware
• Movie theaters keep 50% of box office revenue
• Average entertainment industry salary: $141,000 vs $94,000 nationally
• Independent filmmakers finance projects with credit cards, can lose everything to piracy
• AI companies train models on copyrighted content without permission

Listen to discover how intellectual property course advocates like Ruth are fighting to protect creative workers and why copyright training matters for every entrepreneur.

Transcript

[Ruth Vitale] (0:00 - 0:09)

Please explain to me how it is that your stealing my movie has anything to do with your freedom of speech rights.

[Bruce Berman] (0:14 - 1:11)

Welcome to Understanding Intellectual Property Matters. I'm Bruce Berman. This is the series that gives innovators, entrepreneurs, and experts the opportunity to share their IP story, the good, the bad, and the extraordinary.

Ruth Vitale is a successful Hollywood producer, founder, and co-president of Paramount Classics and president of Fine Line Features. Ruth's films have won three Oscars and received 16 Academy Award nominations, as well as 18 Golden Globe nominations. As president of production for Vestron Pictures, she broke new ground with the highest-grossing independent film of the time, Dirty Dancing.

Ruth is CEO of Creative Future, a nonprofit coalition of more than 500 organizations and 300,000 individuals that support the value of creativity. Welcome, Ruth. Thanks for joining us.

Thank you for having me. Oh, it's great to have you. Where are you speaking from today?

[Ruth Vitale] (1:11 - 1:19)

I'm in Sperryville, Virginia, 80 miles southwest of DC.

[Bruce Berman] (1:19 - 1:39)

Okay, not in Los Angeles. Okay. Nope, not in Los Angeles.

Let's get right into it. There appears to be a general disrespect, if not disdain, for copyrighted content. I think you'll agree.

Patented inventions, too. Why is it so hard for users and businesses to accept creative thinking as a financial asset?

[Ruth Vitale] (1:41 - 2:11)

I don't know. I really don't know. I have to say, having spent 30 years in the film business as an executive, I didn't know about any of this until I was recruited to run Creative Future.

Because when you live in the bubble of Hollywood, everybody values creativity. Everybody understands how hard it is, how difficult it is to make, to create, and to get it out there to break through the clutter.

[Bruce Berman] (2:12 - 2:15)

But people steal from each other, don't they? Even in Hollywood.

[Ruth Vitale] (2:18 - 2:44)

God, please, really? I don't know. It's not the same as piracy and theft.

Maybe you take an idea and you riff off of it, but you can't literally just take somebody's script. On occasion, that happens, and they go to court, and things are settled. But I think the problem for businesses outside of Hollywood in understanding that what we do has value is that we are the victim of our red carpet celebrity.

[Bruce Berman] (2:45 - 2:47)

What do you mean by that?

[Ruth Vitale] (2:47 - 4:09)

People think that we're sitting in the back of limousines, drinking champagne and eating caviar. The moments that they see in Hollywood are red carpet, the Oscars, the Emmys, let's go even further to the Grammys, the Golden Globes. We are the victim of that celebrity.

On the news, they cover that. They don't cover someone killing themselves shooting a movie, that they're working so hard. Nobody seems to understand that the work days are 18-hour days, and that they're six-day shoots sometimes.

If it's only a five-day shoot, you're still working Saturday and Sunday to prep. They don't understand that part. I say this when I'm in D.C. that I know they don't think we're shooting these in the afternoon in my backyard with a flip phone, but the real reality of what it takes to make a movie. Start shooting at seven, have to be on set at five in the morning. You work until seven, then you have to wrap, and you have to get everyone home, and the actors have to learn their lines for the next day. The production designer has to make sure the set's okay.

The cinematographer has to set what lighting they're going to do. It's really difficult. I always say to people, why do we do it?

Because we can't imagine doing anything else.

[Bruce Berman] (4:10 - 4:11)

It's an industry. It's a business.

[Ruth Vitale] (4:12 - 4:49)

It is a business, and it is a killer business. I bring members of the creative community to D.C. to tell these stories. I brought in Deb Riley, who was the production designer for Game of Thrones for the last four or five seasons.

She did a presentation called Creating the World of Westeros. Me, having been in the business for 30 years, was slack-jawed. All of those sets that you see, they took practical locations and did them up.

Then I asked her one question, when's your day start? 4 a.m. When's your day end?

[Bruce Berman] (4:49 - 4:53)

10 p.m. They shot that in Croatia, I think a lot of it.

[Ruth Vitale] (4:53 - 4:55)

They shot it all over the place.

[Bruce Berman] (4:56 - 4:58)

It wasn't green screen. It's not green screen.

[Ruth Vitale] (4:58 - 5:08)

It was for real. That's why I think people think we're having fun. I'm not saying we're not having fun, but it's killer hours.

It's work.

[Bruce Berman] (5:09 - 5:26)

Ruth, Creative Future is a non-profit. It advocates for strong copyright protection for the millions of Americans working in the creative industries, as you were explaining, as well as businesses. What do you hope to achieve by advocating?

What is your goal here?

[Ruth Vitale] (5:26 - 6:18)

Other than losing my voice, because I'm always shouting when I'm in D.C. I'm not actually. Listen, I have to say what I hope to accomplish is to put faces to the amorphous entertainment industry. The studios are the only people, the only entities that I think that people, they know Warner Brothers, they know Paramount, and they may know Chris Nolan, and they may know Steven Spielberg, but they don't know the 2.3 million Americans that work in film and television. They don't know all of them. They don't know that they are people that are doing carpentry, and painting, and set design, and sewing costumes. They don't understand that it is a gig economy, and it's craft.

It's all craft.

[Bruce Berman] (6:18 - 6:20)

What does it have to do with copyright, though?

[Ruth Vitale] (6:21 - 7:16)

They're the people that are creating the entertainment that is copyrighted. When people steal, they're stealing from those people. This is why I say they think, oh, we're only stealing from the studios, and the studios are big entities.

I say, please think of the studios as investment banks who employ these 2.3 million Americans. Okay? The average salary in America is something like $94,000 a year.

The average salary in the creative industries, which is more than film and TV, but generally, is $141,000 a year. So those are skilled labor and jobs that should be protected. Okay?

And copyright is the only thing that protects it. How? You steal movies.

You steal a movie.

[Bruce Berman] (7:19 - 7:22)

Who's stealing? Who would you say are the biggest?

[Ruth Vitale] (7:22 - 7:33)

America is the number one place for piracy in the world. And we have more legal options than anywhere else. Okay?

[Bruce Berman] (7:34 - 7:38)

And the pirates are streamers, or where do you find them?

[Ruth Vitale] (7:38 - 8:32)

Well, you can find them anywhere. If you just go online right now, what's in theaters? One battle after another, right?

I'm not going to leave my screen now, but if you go in and put in watch one battle after another free, Google will serve you up pirate sites. Okay? Then they have these small boxes that look like Apple TV that you can load up apps that are pirate apps.

And the issue is that I always, and I make the analogy that when I was young, I said, oh, I didn't need to vote because I'm only one vote. Okay? But we don't realize if everybody thinks that way, then nobody's voting.

Okay? The same with piracy. It's only me.

I'm only pirating. Just me. But there's millions behind you that are pirating.

[Bruce Berman] (8:32 - 8:37)

What do you think that means in terms of cost?

[Ruth Vitale] (8:37 - 9:19)

I'll tell you exactly what it means because the chamber of commerce, their last study was 2019. A new one's coming out soon. But that year, the estimate was piracy cost the US economy between 29 and $71 billion a year in lost revenue and between 230 and 560,000 jobs.

Okay. How does that work? Studio makes less money.

And then the residuals that are paid from the studio to the unions, okay, healthcare, et cetera, those go down. So those revenues go down. Interesting.

And so it affects everybody.

[Bruce Berman] (9:20 - 9:37)

So hiring is really bad. Yeah, obviously. Ruth, your roots are in independent filmmaking, where you had an extraordinary career as the head of prestigious movie companies.

What was your experience with IP rights and licensing while you were head of studio?

[Ruth Vitale] (9:38 - 11:35)

So what's interesting is, is that when you're living in the bubble of making movies and TV shows, and you're not in the content protection division of a studio, you're really not aware of it. I became aware of it only twice when I had a small movie called The Way Home. It was a Korean film that we had at Paramount Classics.

And we found that bootleg copies, and it was hard goods then before it was digital, bootleg copies were available in Korean markets all downtown in Los Angeles. And I had to call the MPA because they have an enforcement arm. And I was like, uh, can you do anything?

But you know, you're, until I bring people to DC and they hear the numbers, they really don't have any idea because you're busy trying to make the product, right? And then the other one, because I haven't been, I've been doing this for now, 14 years now. Um, the other one was Hustle and Flow.

As soon as that movie went out, it was on the streets in South Central. And again, I had to call the MPA. They're out immediately.

And now it's even easier because they can do theater cams around the world. And it's not shaky, Bruce. And it's not like you see people walking across, you know, the screen.

And as soon as the digital version comes out, as soon as it leaves the theaters and goes to streaming, the pirate site swaps it out for the perfect copy. Wow. We're not all rich.

Okay. The people working in the movie business are, they're just working people who want to put food on their table, send their kids to school. The stat I love the most, there's 122,000 businesses that service film and TV.

92% of them employ less than 10 people.

[Bruce Berman] (11:36 - 11:38)

Wow. Small businesses. Yeah.

[Ruth Vitale] (11:38 - 11:41)

Small business, gig economy, picture to picture.

[Bruce Berman] (11:41 - 12:09)

Ruth, AI has been a game changer and will continue to be for content creators. And the motion picture industry is relying on AI to save costs, which it is already. Actors have in some cases been encouraged to give up their future rights for payment so that AI bots can replicate their image or voice.

My question is, can the studios use AI in this way and still respect actor and creators' rights?

[Ruth Vitale] (12:09 - 13:48)

Listen, I'm not in the negotiations between the studios and SAG-AFTRA, but I think they're not. You're not? No, I am not.

And I'm really happy that I am not. But I know that they, the reason that deal took so long to negotiate is because that's what they were doing is they were trying to figure it out. Although, as I mentioned before we came on, that there's a whole thing today that Tilly Norwood is an AI actress and she can't, you know, she shouldn't be taken, you know, she shouldn't.

I don't know what's going to happen there. I really, I just think actors plumb from so many depths of experience and emotions. I don't know how an AI configuration can do that.

I don't. Yeah. And I don't want to sound like, well, when I was a child, I walked seven miles to school in this snow.

But you did. I did not. When it was snowing, I'm from Boston.

My mother drove me to school. Yeah. I think we're into some very, very, very complicated times.

This whole AI race. I did, I don't know if you read, I did an op-ed in Deadline about three weeks ago about this, about saying you can't, a race to the bottom isn't going to make us win the AI race. And these tech companies really are talking out of both sides of their mouth.

They don't, they don't want to have to pay for the content that their LLMs are using. At the same time, they get up in arms when China steals their AI. So it's like, gosh, you can't have it both ways.

[Bruce Berman] (13:49 - 14:01)

That's right. That's right. Creative Future, Ruth, is 500 companies and organizations and nearly 300,000 individuals from film, television, music, book publishing, photography.

Can anyone join?

[Ruth Vitale] (14:02 - 16:06)

We don't ask for money. We just ask for your voice. And the reason is, is that we do petitions often.

And we just ask our membership if they would sign. And before I ask anybody to blindly sign anything, I have to want to sign it myself. And coming from the creative community, I think that my friends and colleagues in the business feel for the most part, I've never really had anyone say, well, I'm not going to sign that just because you like it, but I'll walk people through.

This is what's going on. I think the most helpful thing is when I can bring people to DC. We just were in DC about two weeks ago with two of the executives from the Walking Dead universe.

One was a supervising producer, Ryan DeGarde, and the other was the executive producer of the first original series, Denise Huth. And then a friend, another friend of ours, Chris Fenton, who's a film producer, former agent, and a real expert on China. And I bring, again, I bring people in to say to members of Congress, this is a human.

We are killing ourselves making entertainment. We are the number one cultural export of America. You need to help us keep our industry healthy so that we can continue to entertain not only Americans, but people all over the world.

How do you get your funding for Create a Future? Our funding comes from a variety of the studios and people help us with the unions and guilds, but we don't ask it from our just regular humans. We ask them to donate their time and their voice.

But when I ask people to come to DC for a week, they have to take a week off from their job to do this. We brought in some of the Twisters in March, and we brought some of the team in from a complete unknown in July. I haven't said anything for next year yet.

It just seems like it's a little bit too far away. But I'm asking them to donate their time. And so I figure the least we can do is not ask them to pay us, too.

[Bruce Berman] (16:06 - 16:13)

Sure, sure. What are the important bills, would you say, right now? Is there anything before Congress?

[Ruth Vitale] (16:14 - 16:46)

They're tussling and drafting and trying to push through a bill on site blocking. Most of the pirate sites are overseas. We have no U.S. jurisdiction. So when we go after a pirate site overseas, we have to work with Interpol, with Homeland Security, and try to shut them down. You can shut down a criminal enterprise that's involved in pirated streaming, and then the next day, they could be open somewhere else with another server. It's a very low cost.

[Bruce Berman] (16:46 - 16:47)

It's like whack-a-mole.

[Ruth Vitale] (16:47 - 17:50)

Yeah, it's a very low cost operation. In almost 60 countries around the world today, there is site blocking. Site blocking is you go to a court of law, you say, let's say, Pirate Bay, judge, Pirate Bay traffics in pirated content.

The judge makes the determination and then sends an order to the internet service providers to block that site from the country, okay? UK, Italy, France, Japan, Australia, Canada, it's everywhere. Actually, let me, I have a show and tell.

Let me show you how many countries it's in. And we don't have it here. Why don't we have it here?

Because we have an enormous amount of people, companies, here. This is the map. All the green has site blocking.

Okay? But look at the big question mark. We don't.

[Bruce Berman] (17:51 - 17:52)

Wow. Wow.

[Ruth Vitale] (17:52 - 19:56)

The organizations that oppose strong copyright protections say that this is having site blocking as a slippery slope towards freedom of speech violations. And I have said, I'm sorry, please explain to me how it is that you're stealing my movie has anything to do with your freedom of speech rights. And when you ask them like that, they go and they get very mad and cuffy and walk off.

Now, as we said, site blocking is in major countries around the world. What the UK and I think India and Brazil have found that legitimate viewing went up when site blocking went into effect and pirated viewing went down. Why?

Because most people want to do the right thing. Again, our opponents say, said on a Zoom call, well, we've been trying to push these, this legislation forward. One said, well, you're not going to eradicate piracy completely.

And that's true, right? Because there's VPNs. And if someone really wants to pirate, you're never going to cure the inveterate pirate.

However, that's like saying we're never going to get heroin off the streets. So we might as well just make it legal, which is a specious argument, Bruce. And it makes me so angry.

So we have been pushing this particular rock up the hill. Well, I've been doing this for 13, 14 years now, pretty much eight, and people before me did it also. We're hoping that Senator Tillis's office with Schiff and Coons and Blackburn are working on it in the Senate.

And in the House, it's Representative Darrell Issa, Zoe Loftgren, they are working to draft. And we're like, all right, let's go. Hurry up.

But you know, bills are like Broadway productions. They just take forever to take flight.

[Bruce Berman] (19:57 - 20:16)

Do you think tech is helping or hindering? Do they care? Distributors, I don't want to name names, but distribution folks, content distribution folks don't really care about theft as much as you would think.

Or do you feel otherwise?

[Ruth Vitale] (20:16 - 20:30)

Well, I don't know who you're describing as content distribution people. Should we just name names and go wild? Go ahead.

I know. I mean, I don't know.

[Bruce Berman] (20:31 - 20:32)

Big tech.

[Ruth Vitale] (20:32 - 21:56)

Big tech isn't really, I mean, Apple cares about piracy because they're making content. Amazon cares about content because they joined the NPA and Netflix cares about content. So they looked at themselves as technology companies.

And I think slowly they're thinking, we're spending hundreds of millions of dollars in programming. Maybe we should care about piracy. I mean, it is a problem.

I don't know how anyone can think that it isn't. You know, the film and TV business, I said, it mentioned that we employed 2.3 million people. Two years ago, it was 2.7 million people. Okay. I think between COVID, the strikes and the lack of work, people have got, have had, have to do other, you know, have had to look elsewhere for different kinds of work. It's serious.

And again, Google and Facebook ain't a bet. They have pirate sites on, you know, Facebook has pirate sites, pages dedicated to piracy. Google, people trust Google.

If I go in and say, watch one battle after another, and it's free and I'm not in the movie business, I think, oh great, it's available online.

[Bruce Berman] (21:56 - 21:59)

Right. Right. How could it be wrong?

It's available online.

[Ruth Vitale] (22:00 - 22:08)

Right. How could it be wrong? It's available on Google.

So yes, the big tech companies don't care because they're like, well, you know, we'll take it down if you, if you.

[Bruce Berman] (22:08 - 22:10)

Yeah. We're just the pipeline. We're just like.

[Ruth Vitale] (22:10 - 22:12)

We're just, we're just, we're just the highway.

[Bruce Berman] (22:12 - 22:40)

Right. Yeah. Just the highway.

We're like the electric utility company. We don't, we just supply the electricity. We don't, we don't apply it.

Right. Creative futures website talks about the hidden cost of free. And so does a professor, Jonathan Barnett at USC wrote a very interesting book about somewhat about the hidden cost of free.

Can you explain what this means? I mean, I think you've touched upon it, but, but what is it? What are you thinking?

[Ruth Vitale] (22:40 - 23:47)

Hidden cost of free? Well, there's the hidden cost of you're going to hurt an industry that is the number one cultural export, but also there's malware. I don't know if you know, Tom Galvin from digital citizens Alliance is another nonprofit.

He does excellent work on research and he does research that shows that when you go to a pirate site without even clicking, if you just do a drive-by through the site, you stand a 30% plus chance of downloading malware to your computer, which means identity theft, credit card theft, all of the things that you think, Oh, I'm going to be fine. And that's how pirate sites make money. They make money from ads and selling space on their website to malware operators.

So that whatever they, you know, whatever the malware operator gets, they give a percentage back to the pirate site. It really doesn't pay, but I think that kids probably think, Oh, I can take the chance. Okay.

Be my guest. Good luck.

[Bruce Berman] (23:48 - 24:04)

Ruth is, is there an inherent conflict between small or individual copyright holders of which there are tens of millions and large ones like record labels and movie studios, both are interested in having their rights upheld, but perhaps for different reasons.

[Ruth Vitale] (24:05 - 24:16)

Really? What are the different reasons? I mean, like, so I have a lot of small independent filmmaker friends and they're getting killed online because they don't have a studio to protect them.

[Bruce Berman] (24:17 - 24:17)

Right.

[Ruth Vitale] (24:17 - 25:47)

The studio, right? The studio has a huge network of content protection people that can, they spend all day doing notice and takedowns. So I don't, you know how the DMCA works, but for your audience, the digital millennium copyright act, which was written in 1998, the way it was interpreted, interpreted by the law.

And I'm not a lawyer, but I was told by my lawyer friends that it was interpreted not as correctly as the intent of the, the, the language itself, which was if we, if I find something that's pirated on a site, I can send a notice and they'll take it down. I think the intent was that it'd stay down, but it doesn't stay down. It goes up and up and up again.

And again, I just have my, I have my PowerPoint presentation. Facebook receives 200,000 to 750,000 takedown requests each month, each month. Google, and this is their numbers, receives 3 billion takedown requests each year or about 58 million a week.

Okay. To this day, piracy pages on Facebook flourish and continues to list piracy sites and search results. And you just think, I'm sorry, you could go a long way to helping, but they say, well, see, we're doing our job.

You send a takedown notice and we put it down. I was like, maybe you could just keep it down. I don't know.

Would that be a lot to ask?

[Bruce Berman] (25:49 - 25:53)

Yeah. Yeah. It's really, it's a conundrum.

It's really quite a situation.

[Ruth Vitale] (25:53 - 26:14)

It's honestly, it's more than a conundrum. It's just wrong, Bruce. Do you know what I mean?

They, they can do so much. I'm going to, these are not equivalents. Okay.

But if you put in watch child porn online, which I've done in a member of Congress's office, you get an FBI warning.

[Bruce Berman] (26:15 - 26:15)

Right.

[Ruth Vitale] (26:16 - 26:25)

Okay. You get a warning that says child porn is illegal. It's illegal receipt reporting.

You cannot find it unless you go to a dark web, which I don't even know how to get to.

[Bruce Berman] (26:25 - 26:45)

They do a really good job, Google and others of, of filtering for that because they have to, if not, they would, they'd be shut down, but they can use, apply the same technology to, to use, to, to eradicate pirated activity, but they, pirating, they don't care. They don't really want to do that.

[Ruth Vitale] (26:46 - 28:03)

I know that's what's so infuriating. And again, not to make an equivalency. Okay.

Because child porn is heinous and horrible and so terrible, but these guys, these are flips of switches. This isn't some poor guy sitting in a room. This is like a Monty Python sketch.

You know what I mean? It's not, it's not some poor bedraggled human that can't, you know, I have nothing, but a lot of disdain for these, for, for these highways, because those highways could help. They try a little, not so much.

So the site blocking to go full circle, the site blocking is a reason, you know, is, is, is, is something that will help us. And again, it's not going to eradicate piracy. And as soon as we, if we ever dear Lord get this into law, I'm sure there'll be a new technology that we'll have to worry about all over again.

Okay. But, and I always feel like, again, never aware of this before I took this job, but we're always behind the eight ball. It's like, we're always like, what?

And, you know, the argument, another argument is, is like, democracies don't have site blocking. I'm like, well, I'm pretty sure Canada and Italy and Germany, I'm pretty sure those are all democratic allies of ours.

[Bruce Berman] (28:04 - 28:24)

AI draws on a huge amounts of content, you know, other businesses and individuals copyrighted work under the fair use doctrine, so-called fair use. Now, now you've written about, or your website, create a few times, alluded to the fair use confusion game. What do you mean by the fair use confusion game?

[Ruth Vitale] (28:25 - 28:34)

You can't take an entire movie, upload it to your LLM and say it's fair use. You can't. Shouldn't it be?

[Bruce Berman] (28:34 - 28:36)

Why, why shouldn't I have access to it?

[Ruth Vitale] (28:38 - 28:40)

You can if you'd like to.

[Bruce Berman] (28:40 - 28:41)

If you pay for it.

[Ruth Vitale] (28:41 - 28:49)

Yeah. You know, it's not like we, it's not like we shot this in the backyard in a flip phone in an afternoon.

[Bruce Berman] (28:50 - 28:50)

Right.

[Ruth Vitale] (28:51 - 30:03)

A long time ago, when I first started this job, I went up to San Francisco and I was up there for hearings. And I asked Fred Von Lohman, who was used to be head of IP at Google. I, he's still, he's retired from there, but doing something else now.

And I really like Fred. He said to me, you know, your problem is, is you're just not making your, uh, your content available all over the world at the same time. And I was like, Fred, for the most part, we, we try to do that with smaller independent films.

They're coupled together piece by piece. And so that's not always possible. But the fact is, is that I still can't compete with free.

I said, I did profit and loss statements for 30 years. Okay. I can't offer my product for free and you are giving it away for free.

I run a business, right? Right. I have to pay people to make this.

They're not someone, you know, we do a newsletter every two weeks and someone actually texts, uh, sent a letter, an email back to me from on our newsletter saying people should make entertainment on their days off and get a real job. And I thought, you know, sweetheart, you should come to a set one day and work one day and tell me that that's not a real job.

[Bruce Berman] (30:03 - 30:24)

Right, right. You see 50 people or more, you know, working and working their butts off. Um, it's interesting.

So what, what are the economics? I know this, but what for the, our audience, what are the economics of a movie? What does the movie cost today?

An average movie costs 80 to a hundred million. And what does it need to make back in order to break even?

[Ruth Vitale] (30:25 - 31:19)

This is another reason that we're a victim of like news. It's like, you know, when a Marvel movie opens and it does $500 million, right. Even my mother, God rest her soul would say, wow, that movie did a $500 million.

And I'm like, well, that movie costs, let's say 250 million. So let's just, okay. So it may have broken.

Maybe, because what people don't understand is that let's, let's just do the simple math. A hundred million dollar movie, a hundred million or 150 million to open it theatrically release it that's print and advertising money. Okay.

So you're, let's say for easy math, you're 200 million in and that's low. Okay. You're 200 million.

And if the movie does $200 million at the box office, 50% of that goes to the movie theater because the movie theater has to pay for their operation.

[Bruce Berman] (31:19 - 31:19)

Right.

[Ruth Vitale] (31:20 - 31:38)

Right. They have to pay for the screens, for the people they employ for the real estate, for the insurance, all of that. Okay.

So they get 50% off. So if your movie does 200 million, you've now collected a hundred million. You're already, you're now you're a hundred million in the hole.

Okay.

[Bruce Berman] (31:39 - 31:42)

So you may have sold some foreign rights or something, you know?

[Ruth Vitale] (31:42 - 32:36)

No. Yeah. No, I'm talking about like a $200 million worldwide gross.

Okay. Okay. Okay.

Because you're only going to get half of that back. Right. And then you get into streaming and you have to do advertising for that.

And you have to do art. You have to do all of the things that we sort of, you're aware of when you're a consumer, right? Like as an audience member, I'm like, oh, I saw an ad or I saw a billboard or I saw a trailer online.

All of that costs money. Independent films are much smaller, right? You buy a movie for a couple million dollars, you market it for $10 million and then you pray you make money back.

Okay. I often said, and I always use this movie because I actually really enjoyed it, but I thought I would never have greenlit it. I don't know if you remember this movie, Pacifier with Vin Diesel, who's like, he's a spy and he has to be a babysitter.

Okay. And I remember sitting in that movie thinking, God bless Amy Pascal, who was head of Sony at the time.

[Bruce Berman] (32:36 - 32:37)

Sure.

[Ruth Vitale] (32:37 - 33:08)

I wouldn't have slept from the minute I greenlit that movie until the end of opening weekend, which had to be a year to a year and a half. Okay. And I think I tip my hat to every head of every studio who literally gambles every day because every movie isn't going to be out of the park.

They're not, and you're going to lose money on most and a couple will get you out of the hole.

[Bruce Berman] (33:08 - 33:13)

Sort of like venture capital, you know, one in seven or eight, maybe we'll break even or make a little money.

[Ruth Vitale] (33:14 - 33:36)

It's true. I met with a venture capitalist once when I was in the business of trying to raise some money. He said, well, we only do oil investments.

And I'm like, that's exactly like the movie business. You're drilling a hole and you have no idea if anything's going to come out of it. He looked at me and I'm like, you don't have to get fancy with me.

The oil business is the same as the movie business.

[Bruce Berman] (33:37 - 33:46)

It's speculative, right? Sure. You know, it is one of our largest exports in the U.S. And we have a surplus.

[Ruth Vitale] (33:47 - 33:54)

We have a trade surplus, which is unusual for everybody, right? So it's like we make more money for this country.

[Bruce Berman] (33:55 - 34:02)

What's the independent filmmaker world like today? Is it worse than it was 20, 30 years ago? Is it about the same?

It's worse.

[Ruth Vitale] (34:03 - 34:48)

It's worse because piracy is so bad. We did a series of interviews a while back at Creative Future. It's individual independent filmmakers who are making their own movies, financing them with credit cards and friends and family, and then putting them out themselves.

And they're getting killed because of the piracy. And you just think, I don't know how you keep doing it. The independent filmmakers are the next generation of voices for our industry.

And piracy isn't helping with that, because how do you find the next Napoleon Dynamite or the next, you know, Ryan Kozler when he first started? You know, all those guys came up through the ranks.

[Bruce Berman] (34:50 - 34:51)

Yeah. Yeah.

[Ruth Vitale] (34:51 - 35:00)

Again, I sound like when I was a child, I walked seven miles to school. But I, literally, these are artists and voices that we should want to protect.

[Bruce Berman] (35:00 - 35:30)

To cultivate, yes. To cultivate. Defining good IP behavior.

It's important on the part of creators and distributors and users to know what that is, what that means. What does good IP behavior look like? You know, obviously respecting the rights and paying full fare, but do you have an example?

Can you, someone who has stepped up in the movie industry or other industry who's said, I'm not going to do that that way. I'm going to do it differently. Can you think of anyone?

[Ruth Vitale] (35:30 - 37:49)

Well, no, I mean, listen, when I bring people to DC, it's the first time that they're really aware of the extent of the problem. Okay. And then they come back to LA and they talk about it.

Okay. And then some of them even come back to DC and testify for me, which is, I find very helpful because I can testify as well as any of them because I come from 30 years in the business, but it's better to like, for instance, Mark Varadian testified, he's the producer with Lorenzo Di Bono and Toro of the Transformers series. And he testified in front of Daryl Issa and Zolt Lofgren and other members of Congress to say, you need to help us.

It matters. Okay. So for me, good IP behavior is for me to get more of my colleagues to step up to say, this has to change.

You have to protect us. And it's not just protecting Mark. It's protecting another perfect example.

I was in DC with a television show and the executive producer was with us. And he said, he'd gotten a call from the studio saying they needed to cut 10% of the budget. Okay.

That comes from tightening costs. Piracy affects the bottom line. And when you cut 10% of a show, you're not cutting key crew.

You're cutting the entry level jobs who are the next generation of voices, be it in production design, costume design, art direction, et cetera. Okay. Good IP behavior is don't steal.

If you can afford to go buy a coffee for $9 at Starbucks, you can afford a stream at 299 or 399 or whatever it is. You know, I, I used to go to colleges to talk, but that's like boiling the ocean. I can't, you know, I can't be everywhere.

But the few times that I did, I was in Denver and I went to a university and, you know, I just talked to a class for like two hours and the kid came up to me afterwards. And he said to me, you know, when I walked in this class, I said, there's nothing that lady's going to tell me that's going to make me change my behavior. And he said, and now I promise you, I will never pirate again.

And I was like, give me, I said, give me a hug. Give me a hug. I'll hand out free hugs for anybody.

[Bruce Berman] (37:49 - 38:05)

That's great. That's wonderful. So what idea we're out of time really.

And what would you like to leave the listeners with? If it was one concept that they recall, I think you'd sort of just said it, but if, is there anything that you'd specifically like to leave behind?

[Ruth Vitale] (38:05 - 38:48)

I want people to remember the indelible impression that movies and television shows make on you. They are something that allows humans to connect, to laugh together in a theater, to be terrified in a theater, something I like refuse to do, but all those moments of movies, like remember that they are, they allow for human connectivity and human emotion and, and, and love and understanding. And that's a really powerful medium and we should promote it and keep it as healthy as we can, because without it, who will we be?

[Bruce Berman] (38:48 - 39:08)

Right. Right. It's not an accident that, you know, we've done so well in the pharmaceutical world and the technology world and the entertainment world, you know, the U S there's some method to that madness, which people often overlook and respecting IP rights is a big part of that.

It is.

[Ruth Vitale] (39:09 - 39:22)

And the reason that people don't think it's big here is because they think anybody can tell a story and you know what? Good. Come to come and tell your stories, but let's do them in the legitimate way.

[Bruce Berman] (39:26 - 40:10)

Hello, I'm Bruce Berman, the host of Understanding IP Matters, the critically acclaimed series that provides leading innovators and experts, the space to share their IP story, the good, the bad, and the incredible. Understanding IP Matters is brought to you by the nonprofit center for intellectual property understanding with the generous support of its partners and sponsors subscribe on the platform of your choice or email us at explore at understandingip.org content provided is for informational purposes only and does not represent the views of CIPU or its affiliates. This episode was produced for CIPU by PodSonic.

Thank you for listening.