Pirates hurt region’s B.O.

'XXX,' 'Signs,' 'MIB2' among pix available before local bow

SYDNEY — Exhibs in Hong Kong are alarmed at an upsurge in video piracy after several years in which the illegal trafficking of videos had been sharply reduced.

Cinema operators say DVDs and VCDs of every major U.S. film including “XXX,” “Signs” and “Men in Black II” were available on the streets of Hong Kong and a Shenzhen mall, in mainland China, before they bowed locally.

The impact is damaging the legit video industry as well as hurting ticket sales and discouraging investment in new screens, exhibs say.

“Piracy is very serious and totally out of control here in Hong Kong,” UA Cinemas general manager Bob Vallone tells Variety.

Vallone adds, “The pirates have become so wealthy they have superior manufacturing equipment lines over legitimate manufacturers and licensees. Their network of distribution is to be envied. They can get the movies and music CDs onto the streets of Asia virtually overnight from their legitimate (U.S.) releases.”

Officials at the Motion Picture Assn. in Hong Kong haven’t detected any marked increase in vid piracy, which they estimate accounts for 25% of the overall market.

“Many battles have been won but the war continues,” says Mike Ellis, the MPA’s regional director/ VP of anti-piracy operations. “Over the last three years the number of pirate shops has been reduced from more than 1,000 to around 160. But the (criminals) are still out there as ad-hoc stalls.”

Nonetheless, Ellis says vid piracy has been reined in from its high point of 65% of the market in 1999, before authorities launched the anti-piracy campaign.

The MPA is liaising closely with HK Customs and Shenzhen authorities to go after the smugglers in the border area.

In the Shenzhen mall, DVDs sell for 8RMB ($1) per disk and VCDs for as little as 12 cents.

A joint operation between Customs and the Shenzhen Cultural Task Force in May resulted in the arrest of one man in Hong Kong and the seizure of 2,000 DVDs. In Shenzhen, four warehouses were raided, leading to the arrest of four people and the impounding of 54,000 DVDs.

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