Officials Confiscate Pirated DVDs

Photograph

By: Associated Press

Date: April 29, 2005

Source: Associated Press

About the Photographer: The Associated Press, founded in 1848, is the world's largest and oldest news gathering organization. Functioning as a non-profit cooperative, it is the single largest source of news, photographs, and graphics that are distributed to thousands of print and media organizations around the world. Its staff includes more than 3,700 people in 240 offices worldwide. The Associated Press partners with CHINATOPIX for news and photographs from China.

INTRODUCTION

Since the early 1990s, many companies based in the United States have shifted production and other corporate activities to China to take advantage of cheaper labor and manufacturing costs. However, the globalization of American trade and industry has not come without its share of problems especially for American music, film, and software companies. The greatest threat the American industry faces, especially in the Chinese market, is piracy, counterfeiting, and the theft of intellectual property.

The rapid growth of the Internet and cheaper computer technology has given rise to rampant production of counterfeit and pirated DVDs in China. The scale of piracy has concerned U.S.-based companies for a number of years. Soon after software or a movie is released in the United States, Chinese entrepreneurs obtain master copies, subtitle them in Chinese, and mass produce them for the Chinese market. These end up in almost every video shop and street market in China.

Movie admission in China costs about $6 per ticket, whereas a pirated DVD costs $1-$3. Pirated versions of Microsoft software are available for $1-$4. Piracy is not limited to just software or movies alone. Published reports state that although China has become the production site for authentic American goods, it has also become a center for producing counterfeited American goods like branded footwear, clothing, and designer luggage.

The photograph reproduced here shows officials inspecting and seizing counterfeit DVDs from a video store in Xian, located in Shaanxi Province of China.

PRIMARY SOURCE

OFFICIALS CONFISCATE PIRATED DVDS

See primary source image.

SIGNIFICANCE

China became a signatory to the World Trade Organization (WTO) in December 2001. Since then China has been required to obey international trade laws and rules, including strict observance of intellectual property rights (in simple terms, anti-piracy laws). However, the United States continues to be concerned about the growing menace of counterfeiting in the Chinese market. According to various sources, piracy in China is costing the American film industry around $168 million annually. On a global scale, the music industry loses about $5 billion per year to piracy alone, and the U.S. recording industries claim to lose about $1 million a day.

Most counterfeit DVDs made in China are created using technologies developed in the United States. This fact adds insult to the injuries already inflicted by Chinese piracy, since the efficiency of those technologies makes it very difficult for officials to distinguish pirated DVDs from original ones. Chinese entrepreneurs distribute pirated DVDs through a wide variety of traditional and nontraditional channels—corner stores, street peddlers, Internet sites—making this activity even more difficult to police.

U.S. anti-piracy officials claim that the scale of counterfeiting has grown to such an extent that it has become integrated into the fabric of the local Chinese economy. The Chinese counterfeiting industry employs a substantial number of people and provides them with employment during a time of growing unemployment in China. As a result, Chinese authorities are concerned that tackling piracy will lead to job losses and, potentially, social instability. Nevertheless, since the early 2000s, the United States and other governments have increased pressure on the Chinese government to eliminate the counterfeit DVD industry. The Chinese government does routinely conduct raids (as can be seen in the accompanying image), yet the United States claims that these efforts are inadequate and have not done much to stop these illegal practices.

Discussions with the Chinese government concerning the protection of intellectual property rights and related issues have failed on several occasions in the past. Chinese officials maintain that a number of barriers make it difficult to curb piracy. China has the largest population in the world, and, with a low per capita Gross Domestic Product (per capita Gross Domestic Product can be thought of as how much an average citizen produces, or earns, in a year), poverty is a major issue in China. Because of the gradual opening of the Chinese market, many Chinese are anxious to try new cultural experiences, especially those related to the previously forbidden western cultures. When they want to watch a Hollywood film, most of them would rather purchase a cheaply priced, pirated DVD with Chinese subtitles, rather than going to an expensive movie theater. Many experts believe that this is a primary reason for the growing DVD piracy market in China.

However, to prevent DVD piracy and protect intellectual property rights, Chinese officials do routinely conduct inspections and make arrests to deter the practice. In June 2004, two U.S. nationals were arrested for DVD piracy in Shanghai, China, as a result of a joint operation between U.S. and Chinese authorities. There have been many more reported arrests as well. These measures have been effective, but limited. Anti-piracy officials state that only tougher implementation of trade rules and growing awareness about counterfeited goods will lead to an appreciable decrease in the scale of piracy and intellectual property theft in China.

FURTHER RESOURCES

Web sites

Fighting Piracy News Desk. "Fight Against Piracy." 〈http://www.dvd-intelligence.com/news_desk/piracy_newsdesk.htm〉 (accessed February 14, 2006).

Huilin, Zou. "US Nationals Arrested for DVD Piracy," China Daily, July 30, 2004, 〈http://www2.chinadaily.com.cn/english/doc/2004-07/30/content_353431.htm〉 (accessed February 14, 2006).

RIAA (Recording Industry Association of America). "Anti-Piracy." 〈http://www.riaa.com/issues/piracy/default.asp〉 (accessed February 14, 2006).

U.S. Department of State. International Information Programs. "Trade Official Urges China To Punish IPR Violators Forcefully." 〈http://usinfo.state.gov/ei/Archive/2005/Apr/15-94765.html〉 (accessed February 14, 2006).