movie news : Piracy 'destroying China's own movie industry'

Most Chinese film executives believe movie piracy, which accounts for more than 90 per cent of the market in China, will expand in the short term and is unlikely to shrink in the future, according to a survey. The survey was recently conducted on behalf of the Motion Picture Association, the lobby group for Hollywood and the global interests of the US film industry.

The survey represents an effort by the MPA to put a Chinese face on its longstanding claims about the size and scope of movie piracy in China, which it argues is devastating the local industry as well as harming foreigners. "Pirated movies have fundamentally undermined the production capabilities of China's movie industry, with the private sector hit most severely," the report says.

The MPA's work in countries such as China has often been undermined by the perception that the Hollywood lobby simply represents wealthy foreign studios with little interest in building the local market. A recent study commissioned by the MPA estimated that piracy cost movie makers $2.7bn in 2005 in China, with more than half of that loss being carried by the Chinese industry itself.

The latest report makes no such claims for total monetary losses, as it is based on the responses of about 100 senior Chinese executives to a list of survey questions. One measure of the scope of piracy are China's 774 registered DVD/CD production lines which have a total annual capacity of about 2.7bn pieces, overshadowing official sales of 353m in 2003. "Some pirated DVD manufacturers have established their own reputations and brands," the report says.

The rapid growth in downloads by young movie watchers is a major reason why piracy will continue to thrive. The makers of pirated discs are mostly clustered in Guangdong, the southern Chinese province bordering Hong Kong, and are structured along the lines of organised crime organisations, the report says. "These [crime] bosses generally establish illegal production plants in mainland China but stay abroad themselves to avoid being arrested," the report says.

The main drivers of piracy remain the tight restrictions on movies in China and the huge profits that come from selling illegal discs. Discs cost less than Rmb1 (E0.10) to manufacture and are sold for between Rmb5 and Rmb10 each.

von Richard McGregor, Beijing