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[Marwan]

A new proposal emerging from the Russian parliament's Committee on Economic Policy could have global implications for the entertainment industries, movies in particular. The scenario envisions a state-sanctioned 'Department of Piracy' that would obtain copyrighted content unavailable by legal means, so that the state can sell it to the public.

Pirate KeyFollowing Russia’s invasion of Ukraine and the introduction of sanctions, replacing foreign goods and services with local alternatives became a Kremlin priority.

Russia’s reliance on Western software suppliers led to proposals in favor of removing liabilty for piracy, as long as the unlicensed software originates from a country supporting sanctions.

Content Vacuum Will Be Filled
Removal of liability for software piracy was widely reported as the ‘legalization’ of all piracy in Russia, which at the time certainly wasn’t the case. But as the months pass by all options remain on the table, and for the entertainment industries, the situation looks pretty bleak.

When citizens first began screening pirated Hollywood movies in cinemas, Russian entertainment groups condemned them for it. Three months later, a dejected cinema industry chief said that he couldn’t blame venues for trying to stay alive.

Since Russia’s self-inflicted problems are becoming more acute, government action on a national level seems increasingly likely. It’s unclear how plans for compulsory licensing are progressing but recent MPA and RIAA submissions to the USTR offered little hope.

Russia Will Get Content, One Way or Another
It’s clear that global entertainment companies, particularly those based in the United States, face an almost unfathomable set of circumstances. In broad terms, compliance with sanctions means that there is no legal market in Russia for new movies and TV shows, for example. Meanwhile, there are millions of Russian consumers who want new content but are unable to buy it, even if they wanted to.

Opinions on how to solve this conundrum are not hard to find in Russia. If U.S. companies sell movies and other content in the region, they will get paid for their work. However, if they refuse to do business, the same movies will be sourced from the black market and they will get nothing.

During a recent roundtable discussion titled Right to Content: Why the Exit of Foreign Companies from the Market Makes Everyone Worse, nothing had changed.

“If the copyright holders of this or that content refuse to supply us, we should not be afraid to take responsibility for the fact that we really will have this content one way or another,” said Artem Kiryanov, Deputy Chairman of the State Duma Committee on Economic Policy.

Legalizing State Piracy, Not Piracy By Individuals
People pirating movies, TV shows and music on the internet is nothing new for Russia, or any other country for that matter. In this case, however, Kiryanov has a different type of vision. If piracy of Western content is to be embraced by Russia, Kiryanov suggests that individual piracy efforts should be supplanted by a state-controlled entity tasked with procuring and then distributing pirated content to existing streaming platforms.

“[I]t shouldn’t be a spontaneous action when someone is into something – to steal, download and then watch. It should be an authorized body that will centrally collect content without any copyright payments or respect for the intellectual property of those countries that harm Russia as much as possible. And only then will the collected content be sold to our colleagues who will use it,” Kiryanov said.

“Accordingly, people will have what they are forcibly being deprived of. And business will operate in a legal space, so the very meaning of piracy is lost. We must not let Russians feel they are being discriminated against and deprived of some services.”

Russia Understands Value of Intellectual Property
On its current trajectory, Russia faces many serious problems over the next few years, with Kiryanov’s proposal addressing just one – badly. Not only would his scheme enrage copyright holders everywhere, at best it would provide Russian citizens with a premium service they can already get in two types of free – free of charge and free from censorship.

And then there’s the prospect of legal streaming platforms competing with pirate sites for market share and revenue, offering the same product at a premium price, while attempting to capture the moral and legal high ground. And if that doesn’t provide enough dark humor, stand by for the site-blocking requests targeting pirate sites – sent by authorized sites with permission to distribute pirated content.

Whether the proposal will gain any support remains to be seen, but if nothing else it suggests that Russia has been listening. For many years the U.S. hammered home the message that Russia’s economy would benefit from the protection of foreign intellectual property but as things stand, there’s nothing new to protect.

Embedding the state into piracy networks to take all of the available profit is perhaps the most depressingly predictable response, one that features a race to the bottom and ever-reducing profits.

[Silent Watcher]

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