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A Few Battles Won, But International Piracy Fight Still Rages

18 Apr, 2002 By: Jessica Wolf

There was good news this month in the Motion Picture Association (MPA)'s ongoing battle with packaged media piracy when a Singapore man pleaded guilty to charges of copyright infringement and was sentenced to 18 months in prison.

But the battle still rages, say MPA officials, and this new bust only confirms fears that the Internet has provided a new marketplace for the sale of illegal digital product.

Singapore authorities arrested Adrian Ng Nov. 27, 2001, and seized nearly 2,000 pirated DVDs, Video Compact Discs (VCDs) and CD-Rs of then-unreleased titles such as 0Swordfish, Heist, Training Day, Angel Eyes and Bandits.

Through his Web site IZERO.com, Ng was selling the high-quality pirated product to customers in the United States, Europe, Australia, the Middle East, Africa and New Zealand. British customs estimates show Ng's site was responsible for as many as 30,000 pirated DVDs entering the U.K. market per week. Ng pleaded guilty April 2 and was sent to jail the same day.

Though one pirate has been put out of business in a nearly yearlong, cross-border sting, this is just the tip of the iceberg, said MPA officials.

“This case represents the global nature and very real threat to the film industry from Internet piracy and in this case, the convergence of optical disc and Internet piracy,” said Ken Jacobsen, SVP and director of worldwide antipiracy for the MPA.

The Internet not only affords the opportunity for copyright infringement by downloading protected material, but through the sale of “optical discs” — DVD, VCD and laserdisc — on Internet sites like Ng's IZERO.com.

Optical disc piracy is a bigger threat to the industry than analog piracy, the MPA maintains, because it is easier and takes less time to copy material onto DVD, VCD or laserdisc than to VHS. And unlike pirated VHS copies, the quality of a pirated disc is just as good as the original.

Partners in Crimebusting
Instrumental in Ng's arrest was the MPA's enforcement arm in the United Kingdom, the Federation Against Copyright Theft (FACT).

At the end of March, FACT launched an intensive antipiracy initiative against one of the worst sources of sales of pirated DVDs in the U.K., the Barras market in Glasgow, Scotland. FACT has targeted the Barras market more than a dozen times in the last year and, at the end of March, seized 300 home-burned recordable DVDs of current theatrical releases in the region such as Ocean's Eleven and We Were Soldiers. Some of the discs were “double-features” with movies like Ali and Zoolander burned onto one disc.

FACT has teamed up with Scottish police through May for an intensive clean-up campaign which will mean additional funds and police officers focused primarily on Scottish public markets like the Barras market.

The MPA has alliances like the one with FACT in more than 60 countries.

Watch List
In September 2001, MPA officials said DVD was becoming the product of choice for packaged media pirates, noting a skyrocketing number of pirated DVD seizures in the Asia Pacific, the Middle East and African regions.

The MPA is pushing high-incident countries like Malaysia, Thailand and Taiwan to do a better job of combating piracy. All three countries have recently adopted optical disc legislation and enforcement plans, according to the MPA. But in its February report to the U.S. Trade Representative (USTR), the MPA recommended Thailand remain on the Intellectual Property Alliance's “priority watch list.” Malaysia was downgraded from priority to “watch list” during an out-of-cycle review last year. All three countries will be up for mid-year review this summer.

In his statement to the USTR, MPA president Jack Valenti acknowledged that both Malaysia and Taiwan have made positive developments in piracy enforcement, but, he said, new laws and increased raids aren't having a great enough effect on illegal exports because cases take too long to come to trial and punishments are still too lenient.

According to MPA data, Taiwan has shown a steady increase in loss estimates from piracy to U.S. media industries, up from $15 million in 1997 to $30 million in 2000, to $35 million last year. (These figures do not include losses due to Internet piracy). The MPA estimates that U.S. media losses were at $40 million in Malaysia last year, which was down $1 million from 2000, but up from 1997's $32 million estimate. Estimated losses in Thailand have risen from $19 million in 1997 and 1998 to $24 million in 2000 and 2001.

The MPA also recommended Lebanon be named as a “priority watch” state. Though MPA loss estimates for the country have remained the same ($8 million) for the last five years, the MPA holds that cable piracy in the country is rampant due to lax enforcement of copyright laws. The country has approximately 1,300 cable operators serving 50 percent of the country who regularly retransmit protected material,using videocassettes, movie channels and satellite programming, without authorization, according to the MPA. The MPA attributes plummeting theatrical admissions and negative effects on the country's legitimate television and video markets to Lebanon's cable piracy.

Ups and Downs
Meanwhile, there are a few bright spots on the piracy landscape.

In Japan, loss estimates from piracy to U.S. media dropped from $150 million in 2000 to $110 million last year. In the U.K., loss estimates declined from $70 million in 1997 to $60 million in 1998 and have held at $40 million for the last three years. In Italy, losses were estimated at $220 million in 1997, compared to 2001's $140 million. In Russia, loss estimates dropped $62 million from $312 million in 1997 and 1998 to $250 million through 2001. Japan estimates dropped from $150 million in 2000 to $110 million in 2001.

Among markets where loss estimates are on the rise is China, with $160 million in 2001, up $40 million from the previous year, and the Philippines, up from $18 million annually in 1997 through 1999, to $25 million in 2000, to $28 million last year.

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