Although it has been possible to watch videos online for a long time, the advertising industry is only now getting hip to the commercial possibilities. For a while, they figured that if people watch free movies online, they would drive the film studios out of business. I don't think the film studios are anymore at ease with free online movies, but they are starting to realize that there is only so much they can do. Rather than fighting it, they are starting to try to find new ways to make money with the technology.
A lot of Internet viewers try to watch videos made by the big studios, but I think even more people are into watching independent movies. For everyone illegally downloading Spiderman, there are probably three or four people who watch funny videos on youtube made by some guy with his web cam. There are a lot of ways to watch video clips from commercial movies, but downloading movies online is a little bit more difficult. You usually need a pretty fast connection, a lot of hard drive space, and a good bit of luck. After all, the laws are so draconian in this country that if you get caught downloading videos, it can completely bankrupt you.
One of my favorite things to do is to watch videos of old TV shows that aren't available anymore. Although this is technically illegal, in general the laws aren't enforced. I download Dr. Who movies off bit torrent all the time. Many of the old episodes haven't even been released, and a few of them have been lost, but there are still people uploading them on to the Internet. If Dr. Who fans could not watch videos online, we wouldn't be able to see many of these great episodes. I think the BBC knows this and that is why they aren't taking legal action to stop it.
It is also a lot of fun to watch videos on YouTube. The great thing about You Tube is that it costs nothing to post your movies, but once they are up, they can be seen all over the world. People put up political commentary, funny movies, or just footage of their vacations. It doesn't matter – YouTube posts it all. I think that is why it has been such a successful service. It makes it so easy for people to post and watch videos online.
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