Piracy complicates emerging markets, but also helps them blossom

When she took the congratulatory call for “Prison Break” becoming the No. 1 series in China, Twentieth Century Fox Intl. TV prexy Marion Edwards was unpleasantly surprised.

“I had the unhappy experience of saying to them that I had never actually licensed the show there,” said Edwards, speaking Friday at the 2012 BRIC (Brazil, Russia, India, China) Summit, presented by Variety in assocation with AFCI Location Show at the Los Angeles Convention Center, where the discussion of key challenges facing rapidly growing international film and TV markets kept returning to the issue of piracy.

“It’s not going away,” said Hasbro prexy Stephen Davis.

Dileep Singh Rathore, producer at India’s On the Road Prods., added that some U.S. titles were released in India weeks before their scheduled bows to control the effects of piracy.

The issue is just one of many that face studios and brands trying to break into foreign markets that hold the promise of lucrative rewards. Greg Foster, chairman and prexy of Imax Filmed Entertainment, noted that the company’s overseas growth has caught up with domestic. Imax has developed 225 theaters in China — where relaxed limits on megascreen films that enter the mainland have been a boon to the format — and more than 40 in Russia, with more to come in both countries.

Summit attendees credited much of the growth in international programming to younger generations that grow up watching more films and TV. China Lion Film Distribution topper and co-founder Milt Barlow said that piracy, ironically, had indirectly helped some foreign film and TV markets bloom, by way of familiarization, especially in China.

Such familiarity is also inspiring foreign governments to court foreign productions, with financial incentives becoming more common and enticing. South Africa, for instance, offers anywhere from 15% to 35% cash back for qualified projects, and has dished out $50 million for foreign co-productions in the past four years. Foreign markets also tout friendly exchange rates and lower costs.

Foster warned, however, that rushing to break into a ripe foreign market can lead to disappointment. “One size doesn’t fit all: If you’re running your business in Russia, China, Vietnam the same way you’re running it in Burbank, it’s probably not gonna work,” he said.

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