When ''Hulk'' hit the small screen early, Hollywood hit the roof. Two weeks before the film adaptation of the story of the angry green giant opened in theaters in June, copies started showing up on file-sharing networks around the world. The film cost Universal $150 million to make and distribute, but anyone with a fast Internet connection, a big hard drive and plenty of time could see it free. To add insult to injury, it turns out that someone working closely with the movie industry was responsible for the release of the pirate copy. Hollywood is desperately worried that it will soon face the widespread illegal copying that has bedeviled the music industry ã and that prompted record companies to file lawsuits last week against 261 people accused of illegally distributing copyrighted music online.Piracy of works in digital format, like DVD's or high-definition television, is in theory so simple that whole movies could be zapped around the globe with a click of a mouse ã a prospect that Jack Valenti, chief executive of the Motion Picture Association of America, has told lawmakers ''gives movie producers multiple Maalox moments.''But the early debut of ''Hulk'' was not the work of the armies of Kazaa-loving college students or cinephile hackers. The copy that made its way to the Internet was an almost complete working version of the film that had been circulated to an advertising agency as part of the campaign for theatrical release. And ''Hulk'' is not alone.According to a new study published by AT&T Labs, the prime source of unauthorized copies of new movies on file-sharing networks appears to be movie industry insiders, not consumers. The study is ''the first publicly available assessment of the source of leaks of popular movies,'' according to its authors.Nearly 80 percent of some 300 copies of popular movies found by the researchers on online file sharing networks ''appeared to have been leaked by industry insiders,'' and nearly all showed up online before their official consumer DVD release date, suggesting that consumer DVD copying represents a relatively minor factor compared with insider leaks. ''Our conclusion is that the distributors really need to take a hard look at their own internal processes and look at how they can stop the insider leaks of their movies'' before taking measures that might hamstring consumers' technologies and rights, said Lorrie Cranor, a researcher at AT&T Labs and lead author of the study.The production and distribution process provide a better choke point, Cranor said, than antipiracy measures that could hamstring consumer electronics devices and computer networks. ''If you're not going to worry about the insiders, it's kind of pointless to worry about the outsiders,'' she said.The insiders might be workers in production or promotion, or even Academy Awards screeners, to whom the studios send thousands of advance copies of DVD's each year. ''The movie industry ought to treat everybody within its influence equally, from studio executives and investors, down through movie editors, truck drivers and out to the critics,'' concluded Cranor and her co-authors: Patrick McDaniel, Simon Byers and Dave Kormann, researchers at AT&T Labs, and Eric Cronin of the University of Pennsylvania. Ken Jacobsen, senior vice president and director of worldwide piracy issues for the motion picture association, said that he had not yet seen the report but added that its conclusions seemed off. ''The industry experience is the awards screeners are a source for piracy,'' Jacobsen said, but primarily during the Oscar-judging season. ''The industry experience also is, on a rare occasion, a copy gets out of a postproduction house and enters the pirate marketplace. And the industry experience is that a majority of movies enter the pirate marketplace as a result of illegal camcording'' in theaters. Digital piracy, Jacobsen said, is ''a serious problem for us now.'' Still, large-scale swapping of high quality, full-length films and HDTV programs is out of the reach of all but the most wired consumer because the files are gargantuan, said Raffi Krikorian, a graduate student in the Media Lab at the Massachusetts Institute of Technology, who has researched the difficulty of digital copying. However, Josh Bernoff, a principal analyst at Forrester Research, cautions that when the technology does grow robust enough for movie trading, consumers will almost certainly do it. In a recent survey of 12- to 20-year-olds published by the company, 20 percent said they had downloaded a feature film. ''I'd have to say when one out of five young people has downloaded a full length movie from a file sharing site, you do have a problem here,'' Bernoff said. But the downloads were probably of low quality, he said, and the economic effect is ''basically nil.'' Solid figures are hard to come by, but estimates in recent studies put the daily movie downloads at 350,000 to 400,000. Like many experts in the field, Krikorian said that consumers were still several years away from being able to zip large digital video files to each other. Hollywood, he said, ''shouldn't worry about Internet piracy now, because that's not feasible,'' he said. Instead, he suggested that the industry learn from the mistakes of the music industry and focus on building business models that will allow the companies to give customers what they want, ''so they don't have to look like the bad guys, suing 12-year-old kids.'' While Hollywood is supporting new laws to toughen penalties to fight online piracy, it is also imposing better control over internal security. The case of the premature ''Hulk'' turned out to be a success story because federal investigators traced the online copy back through identifying numbers. The person who put the movie online, Kerry Gonzalez, had received an early copy from a friend at an advertising agency. He pleaded guilty to copyright infringement in June. Cranor and her colleagues acknowledge that the industry had taken some steps but concluded that substantially more could be done. To Bernoff, those moves are crucial to any industry strategy for fighting digital piracy. ''They have to mind their own store,'' he said.
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