Hollywood studios will be left behind by the likes of Netflix after failing to embrace the Internet, according to the man accused of the biggest movie copyright infringement in U.S. history.
“If Hollywood had some smart people working for them, they would probably have the biggest Internet company on the planet,” Kim Dotcom, who’s facing extradition from New Zealand to the U.S., said in an interview with Bloomberg Television in his Auckland mansion. “Instead, it’s companies like Apple and Netflix that steal their thunder and this opportunity to monetize the power of the Internet. They completely missed the train.”
The U.S. government accuses Dotcom of piracy, money laundering, racketeering and wire fraud through his file-sharing website Megaupload.com, which was closed after an armed police raid on his home in 2012. The German entrepreneur, who faces as long as 88 years in U.S. prison if extradited and convicted, said he did everything he could to prevent pirates using his website and shouldn’t be held responsible for their actions.
The studios, who in a separate civil case allege Dotcom facilitated, encouraged and profited from massive copyright infringement, are attacking him out of ignorance and fear of a new technology, he said. “It’s like the candlestick maker that didn’t like the lightbulb when it came along.”
Hollywood encourages piracy by releasing a film in one country and then slowly rolling it out in others over several months, Dotcom said. “Because people don’t get that access, they are looking for the stuff elsewhere. So it’s a problem created by the content creators, I’m not responsible for that.”
If movies were available globally at a fair price on any device, “piracy would shrink into insignificance,” he said. Studios would also be more profitable if they combined their catalogs and provided all their content online.
“The entire catalog, everything, at a fixed monthly fee, you know, for everyone to access around the world, working on every device,” Dotcom said. “They would have the biggest Internet success in history. Everyone will love a service like that, everyone will use it.”
The problem, he said, is the outdated business model used by the studios, where they fund the production of a movie by pre-selling distribution rights to different license holders in different countries. Companies like Netflix are creating content without this licensing issue and making it available globally, he said.
They “will ultimately take over these dinosaurs in Hollywood,” Dotcom said. “Hollywood has missed that opportunity and they are stuck in the past.”
After the dawn raid on his mansion in January 2012, involving two helicopters and officers armed with assault rifles and gas canisters, Dotcom was indicted in Virginia for what prosecutors called the biggest case of copyright infringement in U.S. history.
They allege that Megaupload, which once accounted for 4 percent of all Internet traffic, generated more than $175 million in criminal proceeds from the exchange of pirated films, music and files.
Studios 20th Century Fox, Disney, Paramount, Universal, Columbia Pictures and Warner Brothers are seeking more than $100 million in the civil case.
Dotcom’s extradition hearing has been repeatedly pushed back amid ongoing legal battles and could take a decade or more to resolve, he said.
In the three and a half years since his arrest, Dotcom has launched a new website called Mega and founded a political party advocating Internet privacy and freedom. He befriended Edward Snowden and Julian Assange to reveal New Zealand’s alleged spying activities and try to embarrass Prime Minister John Key. His Internet Party failed to win any seats in parliament in last year’s election.
Plans to bring the party to the U.S. this year have been pushed back to 2016, Dotcom said.
His next project is to create an alternative Internet called “MegaNet.”
“It’s an Internet that is completely run by the people for the people,” he said. “It’s a beautiful thing.”