I was asked by another boardmember to post this in my section as he felt it would recieve more readers than where it was, so here goes.
By ALEX NICHOLSON, AP Business Writer
Sat Jul 1, 4:04 PM
MOSCOW - When "The Da Vinci Code" premiered in Moscow, Konstantin Zemchenko started his count.
As the Motion Picture Association of America's top pirate-fighter in Russia, Zemchenko's operatives were monitoring the capital's markets and street stalls for when the first bootleg copies would appear.
His goal? A modest 10-day delay. In the worst pirate market in the world after China, that translates into a home run for Hollywood, which says it loses well over $300 million a year in Russia.
On this occasion, the pirates won: Three days after the premiere, a grainy, camcorder copy of the $100 million-plus budget movie was available on DVD for under $6. Two days later a pristine version with interactive menu was on sale for the same price.
The ease with which pirate films, music and software enter the Russian marketplace and the increasingly ingenious means counterfeiters use to get them there are cited by United States Commerce Department officials as a $1.8 billion per year barrier to Russia's entry to the World Trade Organization.
It sometimes feels like running to stand still for Zemchenko, whose Russian Anti-Piracy Organization, or RAPO, sifts through the millions of discs that police confiscate.
"We're choking on the volume," he said in a recent interview in RAPO's headquarters, located in a converted kindergarten on a leafy lane in northern Moscow. Stacks of boxes overflowing with confiscated DVD's clutter its narrow corridors.
In quieter times, Zemchenko organized film festivals abroad as foreign relations director of the USSR's Union of Cinematographers.
Now his job involves more than just long hours in the office.
"There are threats _ all sorts of things. You get complicated moments, you get phone calls," he said, reluctant to discuss an uncomfortable topic. Anti-piracy organizations have repeatedly stressed the link between organized crime and counterfeiting.
RAPO's warehouse currently holds about $7 million worth of pirated DVD's _ enough to make him very unpopular indeed with the people who had hoped to profit from their sale.
While the pressure from Washington has been reflected in a sharp rise in police raids over the past year on optical disc plants and warehouses _ the backbone of the counterfeiting industry _ the number of pirate optical disc lines in Russia has doubled over the past two years. In Russia there are 50 licensed factories housing a total of 60 DVD and 68 CD production lines, with a maximum capacity of 800 million discs per year. Zemchenko estimates 90 percent produce both licensed and pirate discs loaded with music, films and software.
This bottomless capacity, combined with gaps in Russia's copyright law and corruption among beat cops and movie hall staff alike, make Zemchenko's 10-day limit a tough challenge.
In the case of "The Da Vinci Code," the first version to appear was a "tryapka" or "rag" _ Russian slang for the low-fi copies shot on camcorder directly in the cinema. Despite warnings shown before screenings, Russia's copyright law doesn't bar the practice: if a pirate is kicked out of the movie hall for filming, he can claim the copy was for personal use and successfully sue for the cost of his ticket.
The later, high quality copy was made from the original 35mm film using a telecine machine _ the expensive equipment used by television studios to convert film onto video, DVD or computer files. A comparative rarity elsewhere in the world, copies made with telecine are a dime a dozen in Russia: assuming the film can be covertly removed from the cinema to one of the 20 telecine machines in Moscow, there are no clauses in the copyright law that make the process of copying a motion picture to disc any harder than photocopying a newspaper.
And the pirate markets and stalls that dot Russian cities and the capital are as abundant as ever: Corruption among Russia's poorly paid police force means that the stalls' owners can bribe their way out of most situations.
Now Zemchenko is gearing up to meet the challenge of pirate movie downloads from the Internet:
http://www.kinozal.ws lets visitors download The Omen and other recent releases, while infamous Russian pirate music site allofmp3, which is already challenging Apple Computer Inc.'s iTunes with its knockdown prices, also offers films.
Russian prosecutors are already pursuing a criminal case against allofmp3, but Igor Pozhitkov, head of the International Federation of the Phonographic Industry in Russia, calls the current situation with the site "ridiculous."
"It's as though a person is stealing your electricity. The prosecutors determine that what they are doing is illegal, but they just keep on stealing it while you have to wait for the courts," he said.
Already Zemchenko has assigned a staffer to monitor and weed out web providers that host such sites full time.
Total losses to Russian and foreign companies from all forms of intellectual property theft clock in at between $4 billion and $6 billion, according to German Gref, Russia's minister of economic development and trade.
And while Russian President Vladimir Putin has called on the government to take advantage of the country's soaring oil revenues to steer the economy away from its traditional reliance on its raw mineral riches, Chris Israel, the U.S. coordinator for international intellectual property enforcement, argues that goal is already in jeopardy.
"You certainly cannot have a globally competitive, knowledge-based economy without strong intellectual property rights protection," Israel said.
Copyright 2006 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
