New crusade fueled by drop in revenue

HOLLYWOOD– Peru has become an unlikely hero in Latin America’s anti-piracy battle where losses from motion picture piracy are estimated at $344 million.

Since last year, local distribs, exhibs, home video retailers and a television station have joined forces in an Anti-Piracy Crusade in a bid to raise media coverage and urge the government into action. This is the first coalition of its kind in the region where companies outside of the MPA membership have come together.

Members include exhibs Cineplanet, Cinemark, UVK, and Cinestar; theatrical distribbers WB/Fox, Andes Films and UIP; and video distribs/retailers Televideo, WestCoast and Blockbuster. Channel 2, a part owner of Blockbuster, has increased its investigative reports on the piracy problem to help boost awareness.

Each member shells out a monthly fee of $350, which covers the costs of raids and publicity.

It’s a small price to pay, considering that piracy penetration of theatrical and home video releases in Peru currently stands at 70%.

In 2003, total revenues from Peru’s film industry dipped an alarming 30% compared to the previous year, according to Marlon Manay, head of Andes Films Peru, which subdistributes Columbia TriStar and Buena Vista titles. Overall theatrical grosses in Peru grew 3% in 2003 compared to an annual average of 12% in previous years.

In addition to raising public awareness through blanket media coverage, the coalition has successfully lobbied for legislative reform, such as an increase in sanctions for piracy.

The amended anti-piracy law now slams a convicted bootlegger with four to eight years in prison, compared to the previous penalty of a two-to-four-year incarceration. The law now imposes a minimum one-year sentence compared to none in the past.

So far, none of the bootleggers caught have been convicted. The legal process is slow here as in the rest of the region. “The process could take six months to a year,” says Manay.

The coalition has established three functions:

  • Coordinate directly with INDECOPI (the Consumer and Intellectual Property Institute) through its Copyright Office Director, Martin Moscoso, to coordinate raids and press. INDECOPI, in turn, coordinates with the National Police (PNP) and Customs (Sunat) to raid street markets and to seize imports of unrecorded discs.

  • Lobby for improved legislation, such as the recent changes to the criminal code.

  • Have direct contact with government officials to lobby for more effective anti-piracy measures.

Despite the slow process of bringing pirates to justice, the Peruvian model has inspired neighboring countries.

“We are planning to adopt it in Chile,” says Giovanni Gentilli, head of Santiago de Chile-based distrib Andes Films.

“It does serve for smaller countries such as Colombia and those in Central America and MPA needs to bring the model to these countries,” says Steve Solot, Senior Vice President, Motion Picture Association, Latin America.

“The problem is that with every 5,000 to 10,000 bootlegs that are seized, thousands more emerge to replace them,” says Gentilli, who only has to walk out of his office to bump into a street vendor hawking the Buena Vista and Columbia TriStar pics his company distributes.

According to Solot, larger territories such as Brazil, Mexico, Argentina and Chile have more advanced programs coordinated by the MPA and local licensees.

“The only difference is the financial participation of exhibitors and television in Peru,” he adds.

The past two years has seen a shift from VHS piracy to digital piracy (transmitted via DVD and the Internet), as well a proliferation of street stalls, instead of VCR-to-VCR duplication at video stores in Latin America.

Piracy penetration in Mexico, which accounts for more than half of the theatrical and homevideo revenues from the region, rose to 70% (nearly all DVD) from 40% (mostly VHS) two years ago. Motion piracy losses in Mexico is estimated at $140 million. Brazil, a country nearly twice its size, reports an estimated loss of $120 million.

MPA Latin America has been re-orienting its anti-piracy programs to address the threat from both street and Internet sales.

Among the new region-wide initiatives under consideration is the screening of anti-piracy trailers at cinemas, something which Peru’s Anti Piracy Crusade has already put into action. Local film industries of some territories may also start offering rewards to moviehouse employees who catch illegal camcording at cinemas.

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