Gilberto Sanchez, a budding musician who goes by such usernames as "SkillfulGil" or "SkillyGilly", says he obtained a leaked copy of 'Wolverine' from a New York street vendor.
(Credit: MiGente.com)The FBI has accused the man who allegedly was first, or among the first, to upload a pirated copy of "X-Men Origins: Wolverine" that circulated online in April. What authorities have apparently yet to do is identify the original source of the leak.
On Wednesday, after Gilberto Sanchez was charged in New York with violating federal copyright laws by posting "Wolverine" to a file-sharing site a month before the film's theatrical release, he told reporters from The New York Daily News: "It's just ridiculous. I bought it from a Korean guy on the street for five bucks. Then I uploaded it. I didn't make any money."
Sanchez, who is 47 and works as a glazier, doesn't appear to have any direct ties to 20th Century Fox, the Hollywood studio that produced "Wolverine," or the film industry. To hear Sanchez tell it, he was way downstream from the original leak and authorities should be on the lookout for one of the thousands of New York street vendors.
But Sanchez's explanation raises more questions than it answers. The first of which is whether the trail of the person who first leaked the movie has gone cold in the eight months since the unauthorized copy first appeared on the Web. Security experts I've spoken with, however, say long delays are common with these kinds of file-sharing cases, which sometimes require law enforcement officials to spend months compiling evidence.
The two things that almost everybody agrees on are: 1) the case illustrates once again how hard it is to protect digital content, and 2) Sanchez isn't the original source of the leak.
In April, someone posted to the Web an incomplete version of "Wolverine," which cost $100 million to make and stars actor Hugh Jackman. The indictment filed against Sanchez in Los Angeles earlier this month did not say whether he was allegedly the only person to upload it or the first, but Sanchez is the only person who's been indicted in connection with the investigation. The copy that began circulating online was missing music and many computer-generated effects but was still a popular attraction. According to Big Champagne, which tracks file sharing, the movie was viewed 4 million times before it was screened in theaters on May 1.
In the months after the leak, "Wolverine" went on to gross $375 million worldwide, so it doesn't appear the pirated copy prevented the film from turning a profit. But 20th Century Fox, which produced the movie, argues the unauthorized version was watched about 14 million times online and no matter how one slices it, the leak cost the studio big money.
A man accused of uploading "Xmen Origins: Wolverine" suggests leaked copy circulated on discs before appearing online.
(Credit: 20th Century Fox)More recently, the U.S. Attorney's office has begun efforts to extradite Sanchez to Los Angeles, according to Philip Weinstein, his attorney. Weinstein said he has advised his client not to comment on the case.
According to my Hollywood sources, the authorities have ruled out Sanchez as the original source of the leak.
At many top studios, security is tight. Access to working copies is restricted. Copies are tracked and the names of anyone who touches them are supposed to be recorded. That happens not only at the studios but often at the firms hired to do post-production work, such as special-effects houses.
While sources say Sanchez didn't have that kind of access, what isn't clear is whether he knows someone who did.
The government said in its indictment against Sanchez that he posts comments on the Internet under such usernames as "SkillfulGil" and "SkillyGilly." A Google search showed that those names are prevalent at some video-sharing sites as well as numerous music-themed community sites, including MySpace and Crazypellas.net.
Many of the posts from these sites are accompanied by snapshots of a person resembling the Gilberto Sanchez who was photographed by the Daily News on Wednesday.
In one 2008 post at Crazypellas.net, SkillfulGil discussed ripping and posting movies to the Web. At the same site on July 7, two months after the "Wolverine" leak, SkillfulGil wrote: "I had FBI with search warrant in my place. They took my PC. Now (they're) building a fed case on me for the same thing. Copyright Infringement...So I guess I'll (be) made an example of."
An FBI spokeswoman said Tuesday that Sanchez's residence was searched by agents last summer.
Tracing the source of the leak
If, like Sanchez says, the leaked "Wolverine" copy was first available on bootleg DVD and was sold from a street corner to any passerby, then isn't it logical to assume others uploaded the movie to the Web? Couldn't tracing the discs back to their source help lead agents to the original leak? And if there were others who uploaded the film to the Web, wouldn't the government be arresting them as well?
According to my film industry sources, one possible reason that federal officials haven't arrested anyone else is that they may be building a case.
One example for how long it can take to build a case was illustrated in last year's leak of "The Love Guru."
FBI agents had to follow a long trail before filing a criminal complaint nine months after the original leak. (Ben Sheffner, a well-known pro-copyright blogger and attorney, posted a copy of the criminal complaint at his site, Copyrights & Campaigns).
In that case, agents had strong suspicions early on about who leaked the much-maligned Mike Meyers film, according to court documents.
Jack Yates, an employee of Los Angeles Duplication & Broadcasting ("LADB"), was asked to make screener copies that were supposed to appear on talk shows for promotional purposes (one of the copies went to Jay Leno). Yates, however, was seen on the company's video cameras making an extra copy and taking it to his car.
In interviews with agents, Yates denied knowledge of the copy. So federal officials were forced to track down the IP address associated with the first uploading of the movie.
The trail of who obtained a copy of the film involved multiple people but Yates was eventually undone when investigators traced it back to his cousin.
Last summer, the 28-year-old Yates was sentenced to six months in jail.
"X-Men Origins: Wolverine" was uploaded to a file-sharing network last spring, before its release to theaters.
(Credit: 20th Century Fox)Update 7:50 a.m. PST: To include new information from FBI that suspect may not be source of the leak.
The FBI has accused a man of copyright infringement for allegedly uploading to the Web the feature film "X-Men Origins: Wolverine" last spring.
Gilberto Sanchez, 47, was arrested in the Bronx, N.Y., early Wednesday morning by FBI agents without incident, law enforcement sources told CNET. A spokeswoman from the FBI's Los Angeles field office, which led the investigation, confirmed the arrest.
If convicted, Sanchez faces up to three years in prison and a $250,000 fine, or twice the gross gain or gross loss attributable to the offense, whichever is greater.
When the feature film from 20th Century Fox was leaked to the Internet in April, it caused panic in Hollywood because the movie, which reportedly cost $100 million to make, was not scheduled for theatrical release until May. The fear was that Internet distribution of an unauthorized copy would hurt ticket sales.
By the time the movie screened in theaters, the unauthorized copy had been watched 4.1 million times, according to market researcher BigChampagne.
"We're supportive of the FBI's actions," said a Fox spokeswoman. "We will continue to cooperate with law enforcement officials to identify and prosecute those who illegally steal our creative content."
According to a copy of a grand jury indictment that was unsealed last week in U.S. District Court for the Central District of California, Sanchez is accused of uploading the film to file-sharing network Megaupload.com under one of his online aliases, which include "theSkilled1" and "SkillyGilly."
The indictment does not say, however, how Sanchez allegedly obtained a working copy of the film and FBI spokeswoman Laura Eimiller declined to provide those details. She did say that the agency has not ruled out more arrests. What this means is that Sanchez may not have been the source of the leak.
The copy that made the rounds online was rough. Many of the computer-generated graphics had not been inserted yet and the cables holding actors to simulate flying were visible.
The major studios say that films being leaked to the Web is a huge problem, and they have gone to great lengths to increase security. In this case, when the film first leaked, executives at Fox said they were confident that the person who leaked the movie would be caught because of forensic marks on the film copy.
Watermarks are inserted into varying film copies so that they can be identified and any leaks can be traced.
However, some proponents of content sharing claim that such leaks and the publicity they stir actually help ticket sales by building interest in a movie prior to its release--provided that the film is any good.
"Wolverine" ended up making at least some money. It cost about $100 million to make, and worldwide grossed almost $375 million in ticket sales, according to to Numbers.com, which tracks box office sales.
In 2003, a New Jersey man pleaded guilty to copyright infringement charges after uploading the superhero film "Hulk" to the Web weeks before its theatrical release. In that case, the man was sentenced to six months house arrest and ordered to pay a $7,000 fine.
Below is the meat of the indictment
The grand jury charges:
[17 U.S.C. § 506(a)(1)(C) and 18 U.S.C. § 2319(a), (d)(1)]
On or about March 31, 2009, in Los Angeles County, within the Central District of California, and elsewhere, defendant GILBERTO SANCHEZ, also known as ("aka") "theSkilled1," aka "SkillfulGil," aka "Skillz101," and aka "SkillyGilly," did willfully infringe the copyright of a copyrighted work by the distribution of a work being prepared for commercial distribution, by making the motion picture "X-Men Origins:Wolverine" available on www.Megaupload.com, a computer network accessible to members of the public, when he knew and should have known that the work was intended for commercial distribution.
Charting number of times Wolverine was illegally downloaded on file-sharing sites.
(Credit: BigChampagne)Outfitted with a skeleton forged from a super alloy, the comic book hero Wolverine is supposed to be indestructible.
After a raw version of the movie "X-Men Origins: Wolverine" leaked to the Web last month, 20th Century Fox is hoping the action pic, which debuts Friday, is nearly as durable.
Hollywood has been in a near frenzy since April 1, when someone--who has yet to be identified--leaked a copy of "Wolverine" to the Web. The fear was that the unauthorized copy would hurt ticket sales. "Wolverine" cost more than $100 million to make.
Some people won't bother to spend money at the theater when they can watch it for free online, goes one argument. Since it hit the Internet, the pirated copy has been downloaded more than 4.1 million times, according to BigChampagne, which does market research that focuses on file-sharing networks.
Another of Hollywood's concerns is that people who download work prints of movies, as was the case with "Wolverine," are seeing incomplete versions. The studios say they're worried some people will be turned off by the unfinished works and that they'll spread word that the movie is a stinker. So far, none of that appears to have happened.
Fandango, the online movie-ticketing services, is reporting hundreds of sold out shows across the country (not all of them sold through Fandango). The Los Angeles Times wrote Friday the film appears headed "toward a solid but not spectacular opening around $85 million."
(Credit:
20th Century Fox)
It's still too early to tell how "Wolverine" will fare in the long run, but the film's early success could be seen as evidence of a claim many in the torrent community make: that a film appearance on the Web can actually help create anticipation around a movie. Certainly, no one so far has attempted to blame an Internet leak for a film that bombed.
"Torrents won't have one iota of impact on the financial results of the film," said Justin Bunnell, founder of TorrentSpy, a formerly popular BitTorrent search engine that shut down after being sued by the film industry. "The torrenting only increased awareness of the film."
Who can argue that the controversy surrounding the leak didn't generate scores of headlines about Wolverine?
"The news cycle was strong (as a result of the leak)," said Eric Garland, BigChampagne's CEO. "This is a big tent-pole movie that would have received a lot of publicity anyway, but it saw a lot of extra headlines and the word-of-mouth wasn't bad. I don't think this movie was badly hurt by this leak."
Bunnell argues that previous films or TV shows that were shared illegally online, such as the "The Hulk" or "Sicko" succeeded or failed in theaters based on their quality.
"The Hulk" (the version starring Eric Bana) leaked to the Web in 2003, shortly before the theatrical release. After a respectable opening weekend, sales went into a nosedive and the movie is considered a financial disappointment. But the film also suffered from critical reviews, so its dismal performance can't be blamed on the leak. (Critics are mixed about "Wolverine.") "Sicko," director Michael Moore's documentary on the health care industry, appeared on the Web a week before being screened in theaters and fared well, relative to other documentaries, at the box office.
"It can be catastrophic to any media company if advanced word is poor," Garland said. "Ultimately, a bad product will always lose out. What's changed is that you always used to get a chance to get that first wave of paying customers through the door. You lose that group if word gets out that the movie isn't any good."
What it comes down to is that most people prefer watching a film on a huge theater screen than watching on a PC or TV, says Bunnell.
"Watching in a theater is a very empowering experience," Bunnell said. "You're watching with your friends, eating popcorn, seeing all the action up close. Even full screen on a computer can't produce that... I think the theater is a great experience and much more fun than watching alone on a computer screen."
Rupert Murdoch apparently wants his employees to know that he does not take piracy lightly--especially when it's one of his movies that is being illegally downloaded.
An early review of the new X-Men film escorts a Fox entertainment columnist to the nearest exit.
(Credit: Marvel.com)
So when Roger Friedman, an entertainment columnist with FoxNews.com, a division of Murdoch's News Corp. media giant, posted a short review of the forthcoming "X-Men Origins: Wolverine," he soon found himself out of work.
Friedman, who had had contributed to FoxNews.com for 10 years, wrote Thursday in his Fox 411 column that downloading the unreleased superhero movie from the Internet was "so much easier than going out in the rain" and that it "exceeds expectations at every turn," according to a report in Nikki Finke's Deadline Hollywood Daily. 20th Century Fox described the Friedman copy of the movie as a "stolen, incomplete and early version," and Friedman's review was removed from the site on Friday.
News Corp. said in a statement Sunday that the review promoted piracy by reviewing a pirated movie:
Roger Friedman's views in no way reflect the views of News Corporation. We, along with 20th Century Film Corporation, have been a consistent leader in the fight against piracy and have a zero tolerance for any action that encourages and promotes piracy. When we advised Fox News of the facts, they took immediate action, removed the post, and promptly terminated Mr. Friedman.
Fox News apparently later decided to soften that message, issuing the following statement Monday regarding Friedman's position with the company:
Fox News representatives and Roger Friedman met today and mutually agreed to part ways immediately. Fox News appreciates Mr. Friedman's ten years of contributions to building foxnews.com and wishes him success in his future endeavors. Mr. Friedman is grateful to his colleagues for their friendship and support over the past decade.
The film, which reportedly cost $100 million to make, is not scheduled for theatrical release until May 1. But it was leaked to the Web a week ago. A representative for the FBI's Los Angeles field office told CNET News that the bureau has opened an investigation to find out who released the incomplete movie onto the Web.
FBI agents have started looking for whoever uploaded to the Web an incomplete version of the unreleased movie "X-Men Origins: Wolverine."
The new X-men film was leaked to the Web and the FBI may be able to trace the copy back to whoever's responsible.
(Credit: Marvel.com)The film, which reportedly cost $100 million to make, was not scheduled for theatrical release until May 1 but was leaked to the Web Tuesday evening. Laura Eimiller, a spokeswoman for the FBI's Los Angeles field office, said Thursday that the agency is responsible for investigating copyright infringement and allegations of piracy.
She said the bureau received a call within the last 24 hours from 20th Century Fox, the News Corp.-owned studio that produced "Wolverine." At this early stage in the investigation, Eimiller said the agency is without suspects.
However, studio representatives told news agency Reuters because of forensic marks, the authorities would be able to trace the source of the leak.
Studios embed identification marks on prints and film copies and that's how authorities tracked down Kerry Gonzalez. He was the New Jersey man who uploaded the superhero film "Hulk" to the Web weeks before its 2003 theatrical release. Gonzalez pleaded guilty to felony copyright infringement charges and was sentenced to six months house arrest and ordered to pay a $7,000 fine.
That case is an example of how hard it is for studios to protect their multimillion-dollar products, according to a film industry insider.
Gonzalez had nothing to do with the movie business. He told FBI agents that he obtained a videotape copy of the film print from a friend who worked at an advertising agency connected with the movie.
The problem comes down to two issues: lots of different people need access to a working print of a feature film. The second problem is the Internet hands anyone the power to disseminate digital information to a vast audience with little effort or expense.
"You have to realize that toy manufacturers, advertisers, editing houses, preview houses, they all need access to some form of the film cut," said the industry source. When it comes to business partners, the studios are "only as safe as the partner company's last hire."
"When they find this guy," the source continued, "and they will, he will become the poster child for never doing this again."
Not everyone agrees that a movie is harmed by this kind of early Internet release.
"Sicko," director Michael Moore's documentary on the health care industry, appeared on the Web a week before being screened in theaters. The film still saw a respectable opening when compared to other documentaries.
Some say the Web can act as a promotional tool for films, provided that they receive positive word of mouth. In the case of the "Hulk," the movie was widely panned after going out on the Web. When it reached theaters, the film saw a big opening but quickly lost steam and is considered a financial flop.
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