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Thu 1 Sep 2005 04:00 AM

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Piracy is eroding the Motion Picture industry

John Malcolm, anti-piracy director for the Motion Picture Association Worldwide, which represents major Hollywood studios, was in Dubai last month to meet with authorities and discuss how they can combat DVD piracy and satellite signal theft. In an exclusive interview with Digital Studio, he speaks about the worst offenders and possible measures that can be taken to protect the industry.

I|~|john.jpg|~|John Malcolm displays some pirated copies of Hollywood movies.|~|Why have you come to Dubai now?
It is my first entry into the region as vice president of anti-piracy for the Motion Picture Association Worldwide. There are a number of issues in this part of the world that I need to tend to. One is the situation in Pakistan, which is very close to the Gulf region.
Pakistan is a big exporter of pirated discs and this, in turn, is affecting a variety of markets such as this one and neighbouring countries like the Kingdom of Saudi Arabia. I am here to discuss what’s going on in Pakistan and to assess the situation along with my counterparts in the music and software industry. I am very heartened to see that President Musharraf has launched very tough wars against the perpetrators of this crime but more needs to be done.
I have meetings arranged with some high-ranking police officials in Dubai primarily to thank them for stepping up their efforts to fight piracy. The court systems here appear to be fairly transparent. Judges here seem to be taking this conduct very seriously and are beginning to impose deterrent sentences on criminals.
Piracy is no doubt, a problem here in Dubai particularly with Chinese street vendors but there are some other concerns as well that I am here to address. For instance, Dubai is often used as a trans-shipment point. Criminals ship pirated material from Pakistan, Malaysia or China onto other countries and use Dubai as a transit point. I am very encouraged by the actions taken by the customs and the police in Dubai and am here to pledge whatever support they need in future. I also wanted to get an assessment of some other countries in the region including Saudi Arabia. Saudi continues to be a great concern with an under performing market. Piracy is very rampant there. Not only is the lack of attention from the law enforcement authorities a significant problem but there is also not much transparency in the courts. Likewise, there’s Jordan and Kuwait that needs to be looked into.

Who do you think is the biggest offender in this region?
The piracy situation among the Gulf countries is at its most severe in Saudi Arabia. Piracy is also evident in Bahrain, Oman, Kuwait and, to a very large degree, in Lebanon and Egypt. In fact, Lebanon, Egypt and Kuwait are currently on the International Intellectual Property Alliance’s (IIPA) priority Watch List, while Saudi Arabia is on the standard Watch List. The UAE was taken off the list in 2000 following efforts to clamp down on piracy. However, we look at Pakistan, which is the most active exporter of pirated products as the biggest offender even if it is not within the Middle East. Not only does it use pirated products but it also exports them to this market and affects this place greatly. The pirated products from Pakistan are of very high quality. They come with holograms. They have discs with multiple titles in most cases and one disc might have say, six of Leonardo di Caprio’s movies or Antonio Banderas’ movies. In this way, they do niche marketing as well.

||**||II|~||~||~|Do you have any statistics on the rate of piracy in the Gulf?
We have better statistics on some countries than others. In KSA, we work with the IIPA. They are our primary liaison with the US government, and with the US trade representative and the Special 301 process. 301 refers to a section of a particular act. It is a process whereby the US trade representative categorises countries based on whether they have intellectual property rights enforcement or they need to be on the priority watch list.
We make certain recommendations to the IIPA and that includes estimates about piracy rates which are done through consumers surveys, market surveys and a variety of methodologies. In KSA, piracy is supposed to be 60% and that is apparently a very conservative estimate. Likewise, Jordan is a big problem. Kuwait is a problem although recently, the country have taken a positive step forward by setting up a federalised task force. This has not been implemented yet. It’s just in the planning stages now but, at least, we know that they are moving in the right direction.

In Dubai specifically, what measures do you plan to suggest to authorities here to step up the fight against piracy?
I have been told that there have already been very exciting and innovative developments in Dubai such as imposing an intellectual property hotline. Authorities here have also sent out circulars to restaurants and bars saying that if their premises are used for the widespread sale of pirated products, they can be fined and even lose their licence.
It is a very aggressive approach but it seems to be working. However, as I mentioned before, there have been indications that Dubai is being used as a trans-shipment point for pirated products that are being produced in other countries and being passed on to European countries.
We have worked with Dubai Customs and they are well aware of the fact that they can use some of their X-ray equipment — which they use to check for smuggled goods and dangerous products — to identify pirated movies and cut back on their trans-shipment. So we are going to reach out to Dubai Customs. I don’t expect them to be resistant. We will be working with the music and software industry as well.
We expect them to take a more proactive stand and I am here to thank them for all their past efforts. Also, in Sharjah, there has been some law enforcement action. There is more that can be done there. Likewise, Abu Dhabi also has a big problem with regards to piracy.
It’s a constant fight and it requires good intelligence and the cooperation of law enforcement authorities because the people engaging in this are very sophisticated criminals. So it is an appropriate response for law enforcement to get involved in this. And it requires us to push for investigations, to compel courts to implement deterrent sentences and to wake up the next morning and go right back at it again.
||**||III|~||~||~|What is the loss incurred by the MPA because of piracy?
Deloitte & Touche estimates that in 2004, hard goods piracy alone cost our members somewhere between US $3 and US $4 billion. This year, Salomon Smith Barney is predicting that piracy will cost our members losses in the vicinity of US $5.4 billion, and this includes internet piracy. There are other studies as well and I am not vouching for their accuracy but we are certain that the annual losses our members incur are significant enough for us to want to take action.

We hear you are working with Showtime in Dubai?
We work with any legitimate rights holder that respects intellectual property and rights and we want to partner with those groups to address people who make their living by stealing the creative works of others. Showtime, as a pay TV operator, is a victim of signal theft.
It is estimated that Showtime, Orbit and ART together lost more than US $25 million last year from 35,000 homes in the GCC illegally accessing pay TV. The compounds in Saudi Arabia, especially, are a hotbed of cable piracy, with pay TV signals being redistributed through a network of internal cabling systems. Worse still, the masterminds behind it often charge users the same fee as pay TV operators. We have seen cable piracy surface in most of the Middle Eastern countries. In Lebanon, cable piracy has totally eroded the market. Oman is also a big offender. It is a big concern to both pay TV operators and the MPA.
Also, there is the sale of DVDs within each of the compounds in Saudi. Bottom line is the authorities there allow it to take place and don’t enforce copyright law within the compounds.

Would you look at Dubai also as a big offender?
Not anymore. Dubai has a bright future and has taken all the right steps to curb piracy. Right here, you have a big internet and media city. To me, Dubai is making a statement that it wants to be a beacon for the region’s information society. Any information society is founded upon respect for intellectual property and to attract more investors, you need to show them that you will respect their rights. This emirate is headed in the right direction.

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