Vid distribs fight illegal rental scams

Foundation looks to regulate business

HONG KONG — Tired of watching helplessly as the number of small shops renting out movies meant for sale spiralled upwards over the past year and a half, 15 major distributors have banded together to form the Hong Kong Video Development Foundation to stamp out the practice.

Plagued by a high unemployment rate and poor economy, Hong Kong residents are searching out cheaper forms of entertainment. Entrepreneurial minds are responding, albeit illegally, and making a quick buck at it.

The unauthorized shops, numbering more than 300, rent out for-sale VCDs and DVDs or pirated discs for between 45¢ and $1 or a monthly fee of $4.85 for all-you-can-watch. Compare that to the established movie rental chains, which legitimately rent VCDS for $1.90 and DVDs for $2.60.

Even large chains are not exempt from the foundation’s critical eye: Some are said to be renting for-sale movies.

The foundation has set goals: It wants to regulate the rental business, negotiate with existing unauthorized rental shops by signing them up as authorized dealers and provide rental copies at reasonable prices.

Losing out are sole sell-through retailers such as HMV, HK Records and CD Warehouse, as well as filmmakers and production and distribution companies.

Man Kung, chairman of the foundation, estimates a 40% drop in sales each year. “If the situation doesn’t improve, foreign and local entertainment investors will not spend money in producing and distributing their titles in Hong Kong,” Kung says. “No titles, no entertainment business in the future. It’s as simple as that.”

The foundation’s members have rewritten a legal notice printed on their discs to define private uses or viewing as any rentals, transactions or broadcasts without authorization.