Sandy Brown
Star Wars: Revenge of the Sith, from Lucasfilms and distributed by News Corp.'s (NWS Quote - Cramer on NWS - Stock Picks) 20th Century Fox was widely distributed through illegal means as it was released, according to many reports.
"We applaud the efforts of the Department of Justice and the FBI and their overseas counterparts with respect to Operation Site Down, and are happy to have assisted them," John Malcolm, the MPAA's director of worldwide antipiracy operations, said in a statement. "We are well aware how difficult it is to identify and investigate secretive and tech savvy release groups which are able to operate in many countries because of the worldwide reach of the Internet." One key element in the returns of DVDs for high-grossing theatrical releases doesn't appear to be that people aren't buying them; in fact, both The Incredibles and Shrek2 have broken DVD sales records. The reason is likely to do with the fact that hyperpopular films are available through Netflix (NFLX Quote - Cramer on NFLX - Stock Picks) or are accessible through video on demand and are being heavily pirated. Dreamworks has been blasted hard since DVD sales of its smash hit Shrek2 fell short of expectations. The company overestimated first-quarter sales and subsequently faced a slew of returns. If today's trading is any indication, Pixar is now in a similar stew. The current Pixar earnings warning and Dreamworks' issues, while raising questions regarding the difficulty of accurately tracking DVD sales, highlight an enormous problem for media content providers. Namely that they face an uphill battle to hit targets and drive legitimate sales in a theft-ridden online environment.
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