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Distribs dent VCD piracy in Indonesia

Video Ezy chain to open 75 stores by year's end

JAKARTA — It’s taken a healthy injection of Australian expertise combined with the persistence of two local distributors, but the battle to stem homevideo piracy in Indonesia is finally making headway.

The Aussie input comes from the Video Ezy chain, which signed a master franchise agreement in September 2000 with PT Vision (homevid licensee of Warner Bros. and Buena Vista) and PT Cinekom (which reps nine Hong Kong film and TV companies including leading broadcaster TVB).

The first store, also branded Video Ezy, opened in March 2001. This month, the 40th outlet bowed. The partners are shooting to have a total of 75 by the end of this year.

“Without Video Ezy’s guidelines and experience, we would not have been able to do the business in a country in which 90% of the market was and is still dominated by pirated products,” says Tjianan Djie, managing director of Cinekom and president-director of Video Ezy Indonesia.

“At the beginning we did not have any idea even how to survive. Many businessmen have tried but failed. It looks as if we are waging silent guerrilla warfare to capture the market. Except for occasional government raids (against the pirates), everything goes on as normal.

“By the end of 2002, we would like to see the legit VCD business gaining 20% of the total market.”

VCD (video compact disc) is the dominant format in the country; no efforts have yet been made to introduce DVD. Pirated VCDs are sold for something between 50¢ and a dollar and rented for 20¢. At Video Ezy outlets, the usual rental fee is 50¢. But with various promos, folks can rent titles for as little as 30¢ apiece.

Each store pays about $5,000 for a two-year franchise. Video Ezy supplies the titles and revenues are split 50/50. The only other significant chains — in a country that has thousands of mom-and-pop vidstores — are Odiva, operated by Dumitra (Columbia TriStar’s licensee) and Medialine (licensee of Universal and DreamWorks). Odiva has about 50 outlets.