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Pirates play cat-and-mouse with enforcers

Coming to a street vendor near you * Movies such as `Tomb Raider,' `Pearl Harbor' and `A.I. Artificial Intelligence' were available on the streets just hours after their release in theaters. * Global piracy costs movie studios an estimated US$2.5 billion annually. * US customs agents are focused on reducing illegal DVDs from Malaysia, China, Taiwan and Russia.

It was the end of a true crime, cat-and-mouse game over pirated videos of the hit movie, Cats and Dogs.

Police snapped a lock with a pair of bolt cutters, and film-industry crime fighter Pete English busted into a dark storeroom filled with thousands of illegal videotapes of movies that only days before hit theaters around the US.

Copies of Warner Bros comedy Cats and Dogs were stacked high in one corner, Paramount's Pootie Tang in another and Dimension Films' Scary Movie 2 against a far wall.

"This is pretty typical," said English, an investigator for The Motion Picture Association of America (MPAA).

He's seen it all before, and even though this investigation led to a seizure, English knew there were thousands more tapes hidden in tiny storerooms around New York where video pirates now store their booty. That contrasts to only a few years ago when pirated tapes were shipped from large warehouses.

For years major movie studios, Warner Bros, a unit of entertainment giant AOL Time Warner Inc, Paramount, a division of Viacom Inc, and Dimension of The Walt Disney Co, have faced unorganized bands of video pirates who rob them of millions of dollars in revenue.

But the problem is rapidly spreading to new DVDs and video CDs, which promise near-perfect copies compared to the often grainy videos shot with hidden cameras in movie theaters.

English's boss, Bill Shannon, who heads US anti-piracy efforts for the MPAA, said illegal copying of videotapes costs MPAA member companies upward of US$250 million in sales a year in the US.

That figure has only slightly declined from the piracy's heyday in the early 1990s. The MPAA estimates that global piracy costs the major movie studios US$2.5 billion annually.

While video pirates have been operating in and around New York for years, English, Shannon and other experts said their operations have changed since the late 1990s, when police broke up some of the biggest piracy operations.

Instead of setting up large factories to distribute tens of thousands of videotapes and CDs, the pirates establish smaller operations, so if police raid one, the losses are only modest.

Moreover, the miniaturization of cameras and falling prices for recorders have improved the speed and efficiency with which the pirates can copy and distribute tapes.

That point was illustrated widely on the streets of New York the past month as illegal copies of hit movies like Paramount's Tomb Raider, Disney's Pearl Harbor and Warner Bros' A.I. Artificial Intelligence could be bought within hours of their official releases in theaters.

Recently the MPAA caught one pirate who was recording movies the night they came out with a camcorder he had bolted on a plank of wood hidden inside his backpack. "He had the eyepiece attached to a cord so he could look through it and adjust the camera at the same time," said Shannon.

The Brooklyn man would then make up to 30 to 40 copies of it in his mother's apartment and sell them to pirates with bigger labs for about US$150 each, according to Shannon.

Those pirates would then make thousands more copies using their larger facilities, and the illegal copies would be sold on the street for US$5 to US$10.

Frank Creighton, director of anti-piracy for the Recording Industry Association of America -- whose member companies lose roughly US$300 million in sales each year to non-Internet piracy -- predicts that trends in the motion picture arena will closely mirror trends in the music industry.

Where once almost all pirated music was distributed on cassette tapes, the advent of CDs has led to relatively cheap CD "burners" that pirates could install at home and make nearly perfect, digital copies of recorded music.

"The same thing could happen in the video marketplace with DVDs," Creighton said.

DVDs, or digital video discs, are copies of movies stored on small discs much like CDs.

Shannon said the MPAA is shifting resources toward finding pirated DVDs, working with US Customs agents focused on reducing illegal DVDs imported from Malaysia, China, Taiwan and Russia, among others. In some overseas countries, at any time, as many as nine out of 10 DVDs or VHS tapes are pirated copies, according to the International Intellectual Property Alliance.

Currently, there are very few US piracy operations that target the burgeoning DVD business because machines that duplicate DVDs, called mono-liners, cost about US$1 million each, which is far too expensive for street pirates.

"We have not seen DVD factories here yet, but that's going to change very soon," Shannon said.

And it is very likely that just as with videotape copies, the pirates will find willing buyers for pirated DVDs.

Experts said consumers want copies of current movies people are talking about rather than waiting for a legal video release which can be six months to a year after a film hits theaters.

Additionally, Shannon said, piracy is not taken seriously enough by courts where judges hand down relatively light sentences of sometimes eight to 10 months.

With billions of dollars at stake, the MPAA refuses to give up its pursuit of the pirates, but despite routinely busting labs and distribution locations, they never really know how much of a dent they're making in the problem.

"It's too lucrative," said English, boxing up illegal tapes in the Brooklyn storage room. He wiped some sweat dripping down his forehead. "This is just a drop in the bucket."
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