Piracy is the biggest threat facing the film industry as we know it — but not in the way you think

Film is usually regarded as the art form most dominated by corporate interests. Writers, directors, actors, and actresses are often forced to make artistic compromises to satisfy the commercial demands of the media companies and executives who finance their films. You have probably read, seen, or heard numerous stories of a filmmaker raging about interference by the studio.

That is, of course, a trite, inaccurate version of reality. If you think about it, there is something quite subversive about the way the movie business works. A few times per year, movie studios — owned by multibillion-dollar media conglomerates — fund art. Great movies, such as Moneyball, The Social Network, 12 Years a Slave, and The Revenant were only born because of massive production and marketing investments from big companies.1

From a Hollywood risk-and-reward point of view, these kinds of films are the riskiest, most emotional, taste-based decisions that studio executives have to make. Perhaps the biggest risk of all is that these smaller films have to turn out really well. In Hollywood parlance, they are 100 percent "execution-dependent." Any rational businessperson is rightfully cautious about such leaps.

However, for many reasons — the halo effect from winning an Academy Award; the desire to nurture talent relationships, ego; and, yes, the financial upside that comes with success — studios take these risks when they produce smaller movies.

When these movies turn out poorly, they are generally wipeouts. Not good enough to justify an aggressive marketing campaign with no Oscar buzz, they become little more than an exercise in damage control. If, by some miracle, they turn out well, they become more than the sum of their financial returns. They can impact the world through the artistic, passionate fashion in which these unique stories are told.

For example, Adam McKay’s The Big Short put an exclamation point on the financial crisis in a way no other work has. Say what you want about the failings of Hollywood, but I think it is pretty damn cool that we have a business and creative ecosystem that will put up millions of dollars so people can tell that story.

But that ecosystem is facing a dire threat. And it is not because of the standard villains usually blamed for the decline of the quality, grown-up end of the movie business, such as the rise of high-quality television programming, the dominance of blockbuster films, or the prevalence of sequels.

The number one threat to corporations funding these high-end art films is piracy. Every year, millions of piracy "transactions" take place, accounting for incalculable lost revenue to those who actually paid to make and distribute those films. And those piracy figures continue to grow.

At some point, the numbers will become unsustainable and the studios will have to cut back their slates. They will not cut back on their franchises (where they make their real money) or low-budget horror movies of the kind my company makes. They will cut back on the art movies that are risky and do not have an easy path to profitability. Pretty soon, there won’t be movies like The Big Short to even steal.

So many arguments have been made to get people to stop pirating — that it is illegal, that it is immoral, that it destroys the livelihoods of the hardworking, below-the-line crew. All of those arguments are valid and true. But they don’t hit most people in the solar plexus of self-interest. And that is the crux of my argument. If we can’t find a way to stop piracy, art movies will disappear. Please join me in standing up to help fight piracy and to ensure that the art of filmmaking thrives well into the 21st century.

Oscar-nominated and two-time Emmy-winning producer Jason Blum is the founder of Blumhouse Productions, which specializes in high-quality microbudget films and is known for the Paranormal Activity, The Purge, Insidious, and Ouija franchises and the award-winning projects Whiplash, The Jinx: The Life and Deaths of Robert Durst, and The Normal Heart.

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