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2 US movie giants swim with China's
sharks By Gwynn Guilford
instance, in December, months after the
early release of Superman Returns, a poster
of the Man of Steel with the Chinese Warner logo
hung in the hallway near the underground entrance.
But the Superman Returns on the shelf was
the pirated one.
Not that Warner cares
that much. Once the legit version is out, it's a
cinch for pirates to copy it immediately. But in
the case of Superman, in the time it took
to reproduce the real thing, sales
had
already taken off. On Warner's Superman
Returns take, Vaughn wouldn't quote numbers
but said, "We're not talking tens of thousands,
we're talking ... significant amounts."
While companies such as Warner and Fox are
slashing prices and turnaround time to beat the
flood of fakes, they're also figuring out ways to
keep the profits up outside of mainland China,
where prices for DVDs can be as much as 10 times
as high (even in Hong Kong, the Region 3
Garfield 2 sells for about US$18). For now
they're both using Region 6 coding, which can only
be read on Chinese DVD players - and on the
increasingly popular multi-region DVD players.
Vaughn explained that Warner also uses
Mandarin-only dubs and burned-in subtitles to make
sure that its Chinese versions can't travel
overseas and undercut sales of more expensive
versions. "So far we haven't had a problem with
parallel imports," he said.
With Zoke and
Warner relying on semi-legitimate stores to sell
their products, anti-piracy enforcement can be a
dicey issue. In the past year, the Chinese
government has also stepped up its effort to foil
the fakers, likely related to other efforts to
clean up Beijing's streets before the 2008 Summer
Olympic Games. It has initiated a series of
rigorous crackdowns on piracy in Beijing, actions
that span government agencies. In October, the
government instituted a "zero-tolerance" policy in
Beijing's Chaoyang district, which includes most
of the city's embassies, Sanlitun, Lido and many
other expat haunts. And last summer, the so-called
One Hundred Days Campaign drove some pirated DVD
sellers out of business and forced others to open
DVD speakeasies in the shops' back rooms.
Another coup for film companies came late
last month, when a Beijing district court fined a
Beijing-based store $20,100 for selling pirated
DVDs.
"This is good, because the fine is
nothing to them, but when they see they're going
to get fined, they're [more likely to] cooperate,"
said the Zoke source, adding that while
enforcement is important, the semi-legitimate
stores are valuable points for retail. "The thing
is, Wal-Mart's not ever going to open its own AV
[audio-vido] stores. So we really don't want [the
semi-legitimate stores] to close."
Vaughn
said the crackdowns make the prospect of selling
legitimate DVDs more appealing to semi-legitimate
stores.
"If you have a 100-day crackdown,
people have to buy something - otherwise you just
create a vacuum," he said. "So what we've done is
to use that [campaign] to push what we think is a
viable consumer proposition."
With
semi-legitimate stores willing to stock legit
DVDs, it's up to the consumers to provide the
demand.
Though Vaughn and the Zoke said
people in China - particularly teachers and
parents - are increasingly concerned about the
moral quandaries of buying fakes, it might not be
enough to push consumers to buy legitimate discs.
"The most effective tool will be education
- or when we have a law to tell people that they
will get fined or go to jail for buying pirated
goods," said the Zoke representative, who pointed
out that cases against people who use the Internet
to download illegally have been successfully
prosecuted.
Vaughn suggested that legal
consequences for consumers might not be such a bad
idea.
"We have some international
learnings on this," he said. "Either you give them
a better deal or you scare them."
Gwynn Guilford is an American
freelance reporter based in Beijing.
(Copyright 2007 Asia Times Online Ltd. All
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