Piracy costs film industry US$2.7b

PUBLISHED : Tuesday, 20 June, 2006, 12:00am
UPDATED : Tuesday, 20 June, 2006, 12:00am

Study finds 93pc of discs on mainland are counterfeit

Piracy on the mainland cost the movie industry US$2.7 billion last year and the problem is expected to grow as the illegal market expands, the US-based Motion Picture Association said yesterday.

A study commissioned by the group found 93 per cent of discs on the mainland were counterfeit, down slightly from 95 per cent in 2004.

The local film industry lost more than half of the US$2.7 billion, with the rest evenly split between association members and companies from Hong Kong and other Asian and European countries combined.

'This isn't a problem just for American movies. It is a global problem,' said Michael Ellis, the association's regional director for Asia-Pacific.

Association members alone - which include large motion picture companies - lost US$565 million in potential spending by Chinese consumers, of which US$244 million was direct revenue.

The association called on the mainland to improve market access for films and institute a ratings system for more transparency.

'When we can't get films in the market, the pirates are filling that gap. We have always advocated very clearly that China will not address their piracy problems until they deal with market access,' Mr Ellis told a news conference on the sidelines of the Shanghai Film Festival.

In an unprecedented move, the mainland recently pulled The Da Vinci Code from screens despite a successful two-week run, citing commercial reasons.

The third instalment in the Mission: Impossible series will premiere on July 20 in a censored version, reportedly without scenes presenting what was deemed to be a negative image of Shanghai, where the movie was partly filmed.

Both movies are already available on pirated DVDs, which sell for 10 yuan or even less. The mainland only allows about 20 imported foreign films on a full revenue-sharing basis each year.

In a separate study by the Chinese Academy of Social Sciences, 90 per cent of 100 industry players surveyed said the mainland's market for pirated movies was continuing to grow.

Xiao Lian , director of the academy's Centre for American Economic Studies who headed the research, said internet downloading of pirated movies through commercial websites was a new and growing threat on the mainland.

'Online piracy is a new trend. It's very difficult to prevent. Perhaps in the future, anti-piracy efforts should be focused on this area,' he said.

His study found that judicial penalties were playing a 'minimal' role in fighting piracy and called for more use of the courts, which would result in jail terms, instead of just warnings and fines.

Washington is considering lodging a complaint against China through the World Trade Organisation over piracy, which crosses a wide range of industries.