21 June, 2006

A Defense of China’s DVD Pirates

Simon yesterday offered some commentary on the Motion Picture Association’s latest report on DVD piracy, and specifically its claims about piracy in China.:

Piratemovie“Piracy cost filmmakers US$2.7 billion (HK$21.06 billion) last year, with domestic firms shouldering more than half those losses, according to a study commissioned by a trade group representing the major Hollywood studios. China’s film industry lost US$1.5 billion in revenue to piracy, while US studios lost US$565 million, according to data released Monday by the Motion Picture Association…Some 93 percent of all movie sales in China were of pirated versions of films, according to the latest study.”

Who’s to blame here? Is it the average Chinese worker, who earns maybe 5,000 yuan a year and can either buy a copy for 5 yuan or the original for 10 times as much? Is it China’s government, who’s domestic industry and creativity suffers far more from piracy than Hollywood? Or is it the outdated business and pricing models of foreign companies in the Chinese market?

AsiaPundit is less inclined to support the thesis that movie piracy in China is price driven and would argue that the problem is based on censorship, heavy regulation and a lack of legal channels for distribution. Pirates are on every street corner, but the only legal outlets for sales are inefficient state-owned shops or big-box retailers such as Carrefour. While the pirates can carry everything, the legitimate outlets can only sell the very slim selection of Chinese Communist Party-approved content that is available.

For that reason, AsiaPundit generally welcomes piracy in China. It would challenge a person’s sanity to only have access to CCP-approved material for viewing.

AP expects that many of the most-heard voices complaining about China’s piracy problems are also consumers of pirated products. AP would wager that the vast majority of local American and European chambers of commerce members, Western journalists, local employees of MPAA-affilated companies and even CCP party cadres all buy pirated DVDs or rob television signals trough illegal sattelite dishes and descramblers.

If the MPAA wanted to see less piracy in China it should be challenging the state’s restrictive policies on content. There are many Chinese and expatriates who would buy quality original DVDs if they were easily available, even if they were significantly more expensive than pirated product.

Variety’s Asian cinema blog, Kaiju Shakedown, offers a post today that makes the same point.

“But, as we all know, these numbers regarding China are completely bogus anyways. Because most MPAA member movies can’t be sold in China so they have no loss. China only allows 20 foreign films to be imported each year, and usually 14 - 16 of these are from MPAA members. So what the MPA is talking about in this report isn’t “profits lost to pirates in China” but “profits lost to closed markets in China”.

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by @ 10:37 am. Filed under China, Asia, East Asia, Northeast Asia, Censorship, Film

6 Responses to “A Defense of China’s DVD Pirates”

  1. Steve Says:

    I recently had a conversation with one of the pirate DVD vendors here in Thailand and he was complaining that business was really getting bad and the market was drying up. I assumed it was because of government crackdowns, although, glancing around Pantip Plaza it was obvious that couldn’t be the case. He went on to explain that everybody is downloading movies on bittorrent instead of buying them. Come to think of it, that’s exactly what I’m doing! The only reason I was there was to look for a more obscure title, which I happily found, otherwise, I’d have downloaded it.

    Perhaps if things play out this way, the DVD vendors will soon be a thing of the past and the governments can claim victory!!

  2. China Law Blog Says:

    Good point re censorship. What else is a person to do if they want their MI3 with dirty laundry?

  3. Shanghaiist Says:

    Extra! Extra! Growing Pains, Yao Ming and the Backdorm Boys…

    TIME magazine’s advice: Learn Mandarin. Their subhead: “China’s economic rise means the world has a new second language—and it isn’t English.” Hmmm. Really? We’re all for learning Chinese — our lesson starts in 30 minutes — but would you real…

  4. Micah Says:

    Last night I went out with my wife to see Octopus 2 at the Warner Cinema here in Shanghai because she’s into the “big aniimals terrorizing people” kind of movie. It turned out to be an awful movie as they go, and we were puzzled why it was dubbed into Chinese yet had been advertised as having a July 22nd release date, like it was a new release. A search on the IMDB turns up that it’s a no-name movie studio *2001* release. “Hooray for import limits” was all I could apologetically say to my wife as we left the theater.

  5. Micah Says:

    Oh, and it was RMB 60 a person. We shoulda just bought a DVD of Jurassic Park II (RMB 5 down the road). Or 24 DVDs, for that price.

  6. Chinabounder Says:

    You make an interesting argument, but I am not wholly sure I agree.

    If the prime reason behind piracy is, as you suggest, closed markets and censorship, then one would expect less piracy in open and uncensored markets.

    But facts do not bear this out. Piracy is every bit as rampant in `open’ sectors of the market. From fashion to food to printer ink, everything that can be sold is pirated. It seems to me that wherever there is a profit to be made by cheating, people will cheat; and wherever a bargain is to be had, consumers will buy it.

    Sure, the CPC’s censorship of films is morally and intellectually repugnant. But the vast majority of young Chinese people I talk to simply have no idea that the government only allows 20 films in per year. Many of them do not even know the government censors the internet and controls the press.

    Piracy is price-driven; it is as simple as that.

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