Anti-Piracy in Asia Pacific
in this section:
Unauthorized Public Performances
Quarterly Anti-Piracy Updates
Download and view our quarterly Asia-Pacific Anti-Piracy Update Newsletter:
Anti-Piracy Update: Issue 1, 2008 (PDF)
Anti-Piracy Update: Issue 5, 2007 (PDF)
Anti-Piracy Update: Issue 4, 2007 (PDF)
Anti-Piracy Update: Issue 3, 2007 (PDF)
Anti-Piracy Update: Issue 2, 2007 (PDF)
Illegal motion picture and television piracy is a thriving international enterprise. The Motion Picture Association (MPA) estimates that its member companies lose approximately US$1.2 billion each year in potential revenue in the Asia-Pacific region alone, and US$6.1 billion globally. In many countries, MPA member company losses are far outstripped by production, theatrical exhibition, home video distribution losses to local industry, as well as losses to governments in uncollected tax revenues. Consumer spending losses on filmed entertainment worldwide are estimated at US$18.2 billion.
In 2006, the MPA's operations in the Asia-Pacific region investigated nearly 30,000 cases of piracy and assisted law enforcement officials in conducting more than 12,400 raids. These activities resulted in the seizure of more than 35 million illegal optical discs, 50 factory optical disc production lines and 4,482 optical disc burners, as well as the initiation of more than 11,000 legal actions.
THE MPA's ROLE
The MPA represents the interests of six international producers and distributors of theatrical films, home video products, and television programming: Buena Vista International, Inc.; Paramount Pictures Corporation; Sony Pictures Releasing International Inc.; Twentieth Century Fox International Corporation; Universal International Films, Inc.; and Warner Bros. Pictures International, a division of Warner Bros. Pictures Inc.
The MPA, on behalf of its member companies, directs a comprehensive worldwide anti-piracy program. Begun in the U.S. in 1975, the program has several objectives: to strengthen industry security measures, to strengthen existing copyright protection through legislative activity, to assist local governments in the investigation and prosecution of piracy cases, and to provide technical support in the criminal and civil litigation generated by such investigations.
The MPA directs its Asia-Pacific anti-piracy activities from a regional office in Singapore. Worldwide headquarters are in Washington, D.C. and Los Angeles, California. Additionally, more than a dozen anti-piracy offices represent the MPA around the region.
On a worldwide basis, entire markets have been transformed from almost universal piracy to legitimate businesses for both American film suppliers as well as other foreign and local filmmakers. MPA 'source investigations', coupled with security measures, have helped identify and expose international piracy networks that reap enormous profits from stealing the intellectual property of American filmmakers. These profits come at the expense of U.S. studios as well as undermining film producers, distributors, exhibitors and retailers of all nations.
THE ECONOMIC PICTURE
Moviemaking is a risky business. Contrary to popular belief, movie- making is not always profitable. Only 1 in 10 films ever recovers its investment from domestic (U.S.) theatrical exhibition, and only four out of 10 movies ever recoups its initial investment.
In 2006, MPA member companies released 203 films, and the average cost to make and market an MPA film was US$100.3 million. This includes US$65.8 million in negative costs and US$34.5 million in marketing costs. Although the U.S. remains the largest market for MPA member company films, the international market is very important to the success of U.S. films
Today, American movies and TV shows are exported to more than 150 nations. The losses suffered to piracy are not only losses to MPA member companies, but also represent a significant loss to local economies. On average, two-thirds of the licensed sales revenue generated overseas stays in the individual countries with one-third going to the governments and one-third to local businesses.
Like every business, the motion picture industry relies on its profits to invest in future products. As piracy negatively impacts profitability, there is less available investment capital. Less capital means fewer movies can be financed, which means jobs are not created and local goods and services are not consumed. The effects of piracy are felt through all sectors of a nation's economy.
In the U.S., copyright industries — movies, home video and television programming, music and sound recordings, books, video games and software — create new jobs at three times the rate of the rest of the economy and are responsible for more than five percent of the nation's total GDP.
THE LAW
By and large, the countries in the Asia-Pacific region have strong anti-piracy legislation. In addition to criminal remedies, copyright owners may also file civil lawsuits against infringers. Worldwide, more than 80 nations have copyright laws. The MPA and its affiliated organizations work to strengthen these laws, when necessary, and suggest appropriate penalties as part of copyright reform. In some parts of the world where copyright laws are weak or nonexistent, successful charges have been brought against pirates under other statutes, such as stolen goods, trademark violations, smuggling, and failure to pay customs duties. Although the laws are generally good, there is a lack of deterrent sentencing in almost all countries in the region. The MPA is working with the governments of these countries to increase the penalties for copyright violations.
ILLEGAL DUPLICATION
In order to maximize revenues, a movie studio typically releases a film according to a sequential schedule. Often that chain includes a first exhibition in U.S. theaters, followed by international theaters, the domestic home video market, pay cable, network television and finally broadcast TV syndication. Due to language and special marketing considerations, international home video distribution may trail the domestic release of a film by six months or more. When piracy occurs at the beginning of any of these release cycles, downstream markets are negatively affected.
Optical Discs:
Pirated optical discs being produced by the hundreds of millions are the biggest piracy problem in the Asia-Pacific region. Pirated optical discs have flooded the market and have seriously affected all aspects of MPA member company businesses – theatrical, home video and television. The main sources of these illegal copies are either 1) an illegal camcorded copy made during the theatrical showing of the film or 2) an original DVD, by breaking the encryption code to make identical illegal copies. While the majority of pirated optical disc product seized by the MPA is manufactured on advanced commercial replication lines, the declining cost of high-tech equipment and blank discs has led to the proliferation of DVD burner laboratories as well.
In 2006, the MPA's operations in the Asia-Pacific region investigated nearly 30,000 cases of piracy and assisted law enforcement officials in conducting more than 12,400 raids. These activities resulted in the seizure of more than 35 million illegal optical discs, 50 factory optical disc production lines and 4,482 optical disc burners, as well as the initiation of more than 11,000 legal actions.
Theatrical Prints:
Theft of a film print from a theater, film depot, courier service or other industry-related facility for the purpose of making illegal copies is a serious form of piracy. Prints may also be purloined from legitimate advance copies used for screening and marketing purposes. At this stage, the pirate is able to make relatively high quality videotapes and optical discs from the theatrical print. It is now very common for pirates to use hand-held video cameras to shoot illegal copies right off theater screens. Illicit optical discs made from these copies flood the markets in the Asia-Pacific region within days of their theatrical release in the United States.
Counterfeiting:
Counterfeit labels and packaging often accompany illegally copied videos and optical discs, especially when they are manufactured for export. Sophisticated labels and markings have been developed by motion picture studios in an attempt to foil counterfeiters as much as possible. Although not a serious problem in the Asia-Pacific region, counterfeiting is prevalent in a number of countries, including Japan and Korea.
Source Investigations:
As optical disc piracy has become the region's number one problem, the MPA has shifted its focus to address the sources of pirated discs and the pirates who distribute illegal product.
As blockbuster movies increasingly feature near-simultaneous global release dates, illegal camcording — and audio recording that is dubbed onto video camcorded elsewhere — in cinemas is spreading throughout Asia and poses one of the biggest threats to the film industry today. Camcording is a major source of pirate material currently being illegally traded; it occurs at the start of the distribution cycle and therefore negatively impacts the economic opportunities for a film throughout the rest of its life cycle.
Pirate optical disc facilities are capable of producing millions of illegal discs each year, which are then distributed worldwide and sold in stores, on the streets, at swap meets and by street market vendors. Masters for these optical discs are normally videos camcorded right off movie theater screens or copies of a genuine DVD made by breaking the encryption code to make identical illegal copies of the DVD. Counterfeit labels and packaging sometimes complete the process but usually there is no attempt made to hide the fact that they are illegal discs. Pirated optical discs are putting hundreds of legal video out- lets out of business throughout Asia. These pirates pay no royalties, no taxes and circumvent the normal censorship channels.