Chinese Market for Pirated Films Called "Out of Control"

In Shanghai, Titanic was available on Video Compact Disc last November, a month before it appeared in theaters in the United States. According to New York Times correspondent Seth Faison in a story dated March 28, illegally copied discs are flooding into China at the rate of half a million per day, primarily from Macau, a Portuguese colony near Hong Kong. China has no legal jurisdiction over Macau, which is not a signatory to the World Trade Organization's International Treaty on Intellectual Properties. Both the US and China signed the pact to control piracy.

Video Compact Disc (VCD) players are one of the hottest consumer-electronics items on the Chinese mainland. Selling for about $250 (US) each, the machines play discs similar to CDs. Two discs of 70 minutes' running time each are needed for a typical two-hour movie. The format is so popular that it is displacing video tape in China, where pirated films sell for as little as $2 apiece on the street. Fifty million VCD players will be manufactured and sold in China this year.

The piracy problem was exacerbated by Chinese authorities, who forced many pirates off the mainland and into Macau and Hong Kong. Now they admit there is little they can do to stop the epidemic. The few seizures they make at the border are a tiny fraction of the total number of discs coming into China each day. The potential for enormous profits, bribery at the border, and the Chinese people's seemingly insatiable demand for cheap movies all combine to make the problem unmanageable for the police.

"The authorities seem to have lost all interest in trying to prevent sales," said Cheng Ching-ming, a Chinese official with the International Federation of Phonograph Industries. The London-based IFPI represents the world's recorded-music industry. Cheng said the problem of music piracy is relatively minor compared to film, primarily because the film industry has been quite passive about dealing with the pirates.

American businesses lose an estimated $2 billion annually to Chinese piracy, Faison states, but an accurate figure on losses to the film industry is impossible to calculate. Nobody knows how many Chinese, accustomed as they are to dirt-cheap movies, would be willing to pay higher prices for legal copies.