Cinema Expo
Cracking down
June 15, 2004
LONDON -- It was a scene straight out of a Hollywood thriller. On June 1, Brazil's most notorious entertainment pirate, Law Kim Chong, was arrested after being secretly recorded during a meeting with an undercover police officer.
The now-jailed Chong's network of shopping centers were suspected of trafficking heavily in pirated material, including movies. But following probes by Brasília's Intelligence Bureau of the Federal Police, he was caught red-handed offering to pay more than $2 million in bribes to the chairman of Brazil's congressional anti-piracy panel to let him off the hook.
"The (bribery) money came from smuggling, from piracy and from unpaid taxes," committee chairman Luiz Antonio De Medeiros said in a public statement. "(It is) money that should be used in public health and education -- not corruption."
While one arrest might seem insignificant, it nonetheless marks the latest advance in a global war on piracy that steadily is gaining momentum.
Now, with scheduled seminars including "Global Digital Cinema Update" and "Piracy: A Proactive Approach and Case Study," it is clear that the piracy crisis will top the agenda at Cinema Expo 2004, the international film confab set to take place Monday through June 24 in Amsterdam.
Cine Expo will host distribution and exhibition executives from throughout the world, and this year's event takes place on the heels of a flurry of regulatory initiatives in the United States and Europe that are sending a message that the film sector is willing to use every possible measure to fight piracy wherever it occurs.
"The piracy situation is as bad as it can get," says Karsten-Peter Grummitt, an analyst at U.K.-based international movie-industry consultancy Dodona Research. "At this year's Cine Expo, movie distributors will definitely be asking cinema exhibitors to tighten security."
How bad is the piracy problem? Statistics tell the story: The Motion Picture Assn. estimates that the film industry annually loses $3.5 billion worldwide to pirates. In Germany, for example, about 700,000 illegal hard copies of the 2003 local boxoffice hit "Good bye, Lenin!" lost the industry nearly $4 million before that film's official video release.
"Without piracy, this industry could make a 15%-18% increase in its turnover," says Jochen Tielke, managing director of GVU, the MPA's German operation.
The London-based Federation Against Copyright Theft has found that annual movie piracy in the United Kingdom increased by more than 80% in 2003 -- costing that nation's film sector more than $600 million -- while the number of pirated-movie seizures doubled compared with the previous year. In addition, the British Video Assn. calculates that piracy could cost the U.K. video retail market about $1 billion by 2007.
Global police organization Interpol recently told government regulators during a meeting in Brussels that counterfeiting, including entertainment piracy, has generated more than $500 billion for criminal organizations and terrorist activities. That figure excludes the growing problem of online film piracy, which has seen pirates upload movies to the Internet and distribute them via high-speed broadband for others to watch for free through such peer-to-peer file-swapping Web sites as Kazaa and eDonkey.
What can be done? Throughout Europe, exhibitors and distributors are relying on tougher legislation to stem the piracy tide and send a strong message to would-be offenders. To that end, the industry is eagerly anticipating the outcome of the European Union's recently adopted Enforcement Directive, which aims to impose stringent anti-piracy measures including imprisonment, fines and bank-account confiscation.
Italy took on the directive last month through the Urbani Act, which makes unauthorized distribution of copyright works through the Internet a crime punishable by jail sentences ranging from three months to six years. In the fall, the U.K. Film Council's anti-piracy task force will publish results of what it bills as the "first comprehensive investigation" into piracy; the effort marks the first time representatives from all of that nation's relevant sectors -- including producers, exhibitors, distributors, the MPA, FACT and government officials -- have collaborated on an anti-piracy initiative.
"By bringing different parts of the U.K. film industry and government together, our task force aims to find ways in which we can curb this menace domestically and internationally through tougher regulation, better enforcement and, in the long term, educating people that piracy is theft," U.K. Film Council CEO John Woodward says.
FACT also is working with the BVA -- which is set to unveil on July 14 the Intellectual Property Trust, an anti-piracy awareness campaign funded by the United Kingdom's video retailers -- and with the government-backed Northern Ireland Organized Crime Task Force, which is conducting research to determine why consumers buy counterfeit goods.
"It is a study of how people rationalize these things in their minds so that we can create believable and persuasive (anti-piracy) campaigns," FACT director-general Raymond Leinster says. "We want to get (across) the message of the impact of counterfeit goods on people's lives because there is a lack of awareness among prosecutors and the judiciary."
"We welcome anything that concentrates the mind on fighting piracy," adds John Wilkinson, the London-based CEO of the Cinema Exhibitors Association. "We welcome the Film Council taking the lead in attempting to coordinate the industry's response to what we want from the government. And we hope that FACT strengthens its powers to close down (illegal) markets."
While the new get-tough stance is viewed by many as a step in the right direction, Tim Richards, CEO of London-based VUE Entertainment -- the new multiplex chain formed by the merger of Warner Village and SBC International -- believes that it means little unless it is backed up aggressively by action.
"What we need in Britain and (all of) Europe is legislative bite -- there is no prosecution," he says. "We need the right legislation to allow the police to make arrests, instead of just taking names but making no charges."
Intense raids that took place recently in Germany appear to support Richards' claim that clearing the path for prosecution will deter potential pirates. GVU in March raided nearly 800 homes, offices and computer centers that were suspected of harboring movie and entertainment-software pirates; the targeted offenders were members of the previously secretive "release groups," which specialize in online sales and distribution of German-language-dubbed films before they reach that nation's theater circuits.
Consultancy group GfK estimates that the number of prereleased German-language movies posted on the Internet has slumped by 50% since those March raids. That news has encouraged GVU to plan two more sweeps before year's end.
While the long-term effects of raids and legislation remain unclear, the implementation of digital projection increasingly is seen as the industry's best weapon going forward.
"There are big benefits in digital projection, but when it happens, it will happen reasonably quickly -- and I don't think that time is far off," Grummitt says.
Still, digital cinema offers a potential double-edged sword. On one hand, d-cinema is cost-effective compared with the current distribution practice of shipping thousands of analog 35mm films worldwide in metal canisters. When shooting with a digital camera, a movie's crystal-clear picture and sound can be stored on a computer server as a single encrypted digital file, which can be sent to distributors via satellite, fiber-optic cable or disk then uploaded simultaneously to digital projectors in multiple theaters.
On the other hand, can the industry agree on a digital-encryption technology standard?
"Like the first digital sound systems, what exhibitors dislike is that there are competing encryption systems in the new projectors that are also incompatible with each other," Grummitt says. "They don't want to install (digital projectors) that will eventually become obsolete."
Such incompatibility helps to explain why only 194 digital screens are in place worldwide, according to Dodona Research.
The Digital Cinema Initiatives, a joint venture established in 2002 by seven major Hollywood studios (Buena Vista, Fox, MGM, Paramount, Sony, Universal and Warner Bros. Pictures), hopes to reach a consensus soon regarding piracy-proof technological specifications. The DCI also is in talks with the U.K.-based European Digital Cinema Forum to ensure that developments on that continent and in the Asia-Pacific region are in line with the studios' decisions.
"In September, we shall be publishing a production guide for producers worldwide," says EDCF general secretary John Graham, a scheduled Cine Expo speaker. "We want to make sure that by the time Hollywood is ready, the investments in Europe would not have been a waste of time."
Other signs exist that a global move toward digital cinema finally might be happening in earnest, including:
DocuZone, founded in 2002 by the Dutch Film Fund, installed digital projectors to screen documentaries in 10 cinemas in the Netherlands, including Utrecht's T'Hoogt theater. The organization's efforts since have expanded to include 100 cinemas in nine European nations.The U.K. Film Council will invest about $20 million to establish the nationwide Digital Screen Network, which will supply 250 digital screens to 150 cinemas.French authorities and the European Union's digital-cinema agency, ADN, recently helped pay for a digital projector at Le Balzac Cinema in Paris. The ADN also has co-funded digital projectors in use at the Utopolis cinema in Luxembourg and the Folkets Hus theater in Kiruna, Sweden, and soft-drink giant PepsiCo sponsored those in use at the Mompark multiplex in Budapest, Hungary, and the Slovansky-Dum theater in Prague.Eng Wah Organization, one of Singapore's top five exhibitors, has joined forces with two government agencies -- the Media Development Authority and the Infocomm Development Authority -- to spend SNG$9 million ($5.25 million) to digitize 20 screens at Eng Wah's six multiplexes. The exhibitor also is building a giant outdoor digital screen in Legends Fort Canning Park. The MDA and IDA hope to turn Singapore into the digital hub of Asia's cinema industry. "We've already installed 15 of the screens, and the remaining units will be up and ready by (June 30)," says Cynthia Goh, Eng Wah's executive director of cinema operations. "It will save the Hollywood studios money for freight costs, and once a disk has been encrypted, the system is almost impossible to hack."With the fight against piracy intensifying and digital projection increasingly becoming a reality, Cine Expo will provide timely platforms at which exhibitors and distributors can address related issues. Grummitt admits that there is no quick fix but concludes that now is time for action.
"I don't know how much progress the exhibitors and distributors are making at the moment, but they will have to sort out something sooner or later," he says.
The now-jailed Chong's network of shopping centers were suspected of trafficking heavily in pirated material, including movies. But following probes by Brasília's Intelligence Bureau of the Federal Police, he was caught red-handed offering to pay more than $2 million in bribes to the chairman of Brazil's congressional anti-piracy panel to let him off the hook.
"The (bribery) money came from smuggling, from piracy and from unpaid taxes," committee chairman Luiz Antonio De Medeiros said in a public statement. "(It is) money that should be used in public health and education -- not corruption."
While one arrest might seem insignificant, it nonetheless marks the latest advance in a global war on piracy that steadily is gaining momentum.
Now, with scheduled seminars including "Global Digital Cinema Update" and "Piracy: A Proactive Approach and Case Study," it is clear that the piracy crisis will top the agenda at Cinema Expo 2004, the international film confab set to take place Monday through June 24 in Amsterdam.
Cine Expo will host distribution and exhibition executives from throughout the world, and this year's event takes place on the heels of a flurry of regulatory initiatives in the United States and Europe that are sending a message that the film sector is willing to use every possible measure to fight piracy wherever it occurs.
"The piracy situation is as bad as it can get," says Karsten-Peter Grummitt, an analyst at U.K.-based international movie-industry consultancy Dodona Research. "At this year's Cine Expo, movie distributors will definitely be asking cinema exhibitors to tighten security."
How bad is the piracy problem? Statistics tell the story: The Motion Picture Assn. estimates that the film industry annually loses $3.5 billion worldwide to pirates. In Germany, for example, about 700,000 illegal hard copies of the 2003 local boxoffice hit "Good bye, Lenin!" lost the industry nearly $4 million before that film's official video release.
"Without piracy, this industry could make a 15%-18% increase in its turnover," says Jochen Tielke, managing director of GVU, the MPA's German operation.
The London-based Federation Against Copyright Theft has found that annual movie piracy in the United Kingdom increased by more than 80% in 2003 -- costing that nation's film sector more than $600 million -- while the number of pirated-movie seizures doubled compared with the previous year. In addition, the British Video Assn. calculates that piracy could cost the U.K. video retail market about $1 billion by 2007.
Global police organization Interpol recently told government regulators during a meeting in Brussels that counterfeiting, including entertainment piracy, has generated more than $500 billion for criminal organizations and terrorist activities. That figure excludes the growing problem of online film piracy, which has seen pirates upload movies to the Internet and distribute them via high-speed broadband for others to watch for free through such peer-to-peer file-swapping Web sites as Kazaa and eDonkey.
What can be done? Throughout Europe, exhibitors and distributors are relying on tougher legislation to stem the piracy tide and send a strong message to would-be offenders. To that end, the industry is eagerly anticipating the outcome of the European Union's recently adopted Enforcement Directive, which aims to impose stringent anti-piracy measures including imprisonment, fines and bank-account confiscation.
Italy took on the directive last month through the Urbani Act, which makes unauthorized distribution of copyright works through the Internet a crime punishable by jail sentences ranging from three months to six years. In the fall, the U.K. Film Council's anti-piracy task force will publish results of what it bills as the "first comprehensive investigation" into piracy; the effort marks the first time representatives from all of that nation's relevant sectors -- including producers, exhibitors, distributors, the MPA, FACT and government officials -- have collaborated on an anti-piracy initiative.
"By bringing different parts of the U.K. film industry and government together, our task force aims to find ways in which we can curb this menace domestically and internationally through tougher regulation, better enforcement and, in the long term, educating people that piracy is theft," U.K. Film Council CEO John Woodward says.
FACT also is working with the BVA -- which is set to unveil on July 14 the Intellectual Property Trust, an anti-piracy awareness campaign funded by the United Kingdom's video retailers -- and with the government-backed Northern Ireland Organized Crime Task Force, which is conducting research to determine why consumers buy counterfeit goods.
"It is a study of how people rationalize these things in their minds so that we can create believable and persuasive (anti-piracy) campaigns," FACT director-general Raymond Leinster says. "We want to get (across) the message of the impact of counterfeit goods on people's lives because there is a lack of awareness among prosecutors and the judiciary."
"We welcome anything that concentrates the mind on fighting piracy," adds John Wilkinson, the London-based CEO of the Cinema Exhibitors Association. "We welcome the Film Council taking the lead in attempting to coordinate the industry's response to what we want from the government. And we hope that FACT strengthens its powers to close down (illegal) markets."
While the new get-tough stance is viewed by many as a step in the right direction, Tim Richards, CEO of London-based VUE Entertainment -- the new multiplex chain formed by the merger of Warner Village and SBC International -- believes that it means little unless it is backed up aggressively by action.
"What we need in Britain and (all of) Europe is legislative bite -- there is no prosecution," he says. "We need the right legislation to allow the police to make arrests, instead of just taking names but making no charges."
Intense raids that took place recently in Germany appear to support Richards' claim that clearing the path for prosecution will deter potential pirates. GVU in March raided nearly 800 homes, offices and computer centers that were suspected of harboring movie and entertainment-software pirates; the targeted offenders were members of the previously secretive "release groups," which specialize in online sales and distribution of German-language-dubbed films before they reach that nation's theater circuits.
Consultancy group GfK estimates that the number of prereleased German-language movies posted on the Internet has slumped by 50% since those March raids. That news has encouraged GVU to plan two more sweeps before year's end.
While the long-term effects of raids and legislation remain unclear, the implementation of digital projection increasingly is seen as the industry's best weapon going forward.
"There are big benefits in digital projection, but when it happens, it will happen reasonably quickly -- and I don't think that time is far off," Grummitt says.
Still, digital cinema offers a potential double-edged sword. On one hand, d-cinema is cost-effective compared with the current distribution practice of shipping thousands of analog 35mm films worldwide in metal canisters. When shooting with a digital camera, a movie's crystal-clear picture and sound can be stored on a computer server as a single encrypted digital file, which can be sent to distributors via satellite, fiber-optic cable or disk then uploaded simultaneously to digital projectors in multiple theaters.
On the other hand, can the industry agree on a digital-encryption technology standard?
"Like the first digital sound systems, what exhibitors dislike is that there are competing encryption systems in the new projectors that are also incompatible with each other," Grummitt says. "They don't want to install (digital projectors) that will eventually become obsolete."
Such incompatibility helps to explain why only 194 digital screens are in place worldwide, according to Dodona Research.
The Digital Cinema Initiatives, a joint venture established in 2002 by seven major Hollywood studios (Buena Vista, Fox, MGM, Paramount, Sony, Universal and Warner Bros. Pictures), hopes to reach a consensus soon regarding piracy-proof technological specifications. The DCI also is in talks with the U.K.-based European Digital Cinema Forum to ensure that developments on that continent and in the Asia-Pacific region are in line with the studios' decisions.
"In September, we shall be publishing a production guide for producers worldwide," says EDCF general secretary John Graham, a scheduled Cine Expo speaker. "We want to make sure that by the time Hollywood is ready, the investments in Europe would not have been a waste of time."
Other signs exist that a global move toward digital cinema finally might be happening in earnest, including:
DocuZone, founded in 2002 by the Dutch Film Fund, installed digital projectors to screen documentaries in 10 cinemas in the Netherlands, including Utrecht's T'Hoogt theater. The organization's efforts since have expanded to include 100 cinemas in nine European nations.The U.K. Film Council will invest about $20 million to establish the nationwide Digital Screen Network, which will supply 250 digital screens to 150 cinemas.French authorities and the European Union's digital-cinema agency, ADN, recently helped pay for a digital projector at Le Balzac Cinema in Paris. The ADN also has co-funded digital projectors in use at the Utopolis cinema in Luxembourg and the Folkets Hus theater in Kiruna, Sweden, and soft-drink giant PepsiCo sponsored those in use at the Mompark multiplex in Budapest, Hungary, and the Slovansky-Dum theater in Prague.Eng Wah Organization, one of Singapore's top five exhibitors, has joined forces with two government agencies -- the Media Development Authority and the Infocomm Development Authority -- to spend SNG$9 million ($5.25 million) to digitize 20 screens at Eng Wah's six multiplexes. The exhibitor also is building a giant outdoor digital screen in Legends Fort Canning Park. The MDA and IDA hope to turn Singapore into the digital hub of Asia's cinema industry. "We've already installed 15 of the screens, and the remaining units will be up and ready by (June 30)," says Cynthia Goh, Eng Wah's executive director of cinema operations. "It will save the Hollywood studios money for freight costs, and once a disk has been encrypted, the system is almost impossible to hack."With the fight against piracy intensifying and digital projection increasingly becoming a reality, Cine Expo will provide timely platforms at which exhibitors and distributors can address related issues. Grummitt admits that there is no quick fix but concludes that now is time for action.
"I don't know how much progress the exhibitors and distributors are making at the moment, but they will have to sort out something sooner or later," he says.
Share on LinkedIn
