Not only does Italy have the worst homevideo piracy problem in Europe, its pirates are also the proudest.

After the country’s leading daily La Repubblica reported last week that Walt Disney’s Christmas box office champ “Aladdin” still hadn’t been seen for sale on the street in an illegally duplicated format, the journalist who penned the article received an anonymous package.

Inside was a pirated cassette of “Aladdin,” along with a copy of the article.

Buena Vista did some investigating and discovered that the pirate copies of “Aladdin” were American tapes (the film is already on sale stateside) with an Italian soundtrack taped with a portable tape recorder during a theatrical screening of the film.

Estimates vary widely about how much money the pirates siphon off each year here from the legit industry. According to the Italian Motion Picture Assn., homevideo piracy accounts for 40% of the $ 400 million generated by homevideo sales and rentals annually. In other words, distribs are losing $ 160 million each year. And consumers lose, too, since the quality of the illegally made cassettes is dismal.

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