In its battle against near-universal Chinese piracy of Hollywood blockbusters, Warner Bros' weapon of choice is a little white price tag smaller than a postage stamp.
Last year, the home entertainment giant began selling selected movies with price tags of only US$2.75 in major Chinese cities, aiming to carve out a market for relatively afforsdable but high-quality, legitimate versions of movies in a sea of counterfeit products selling for less than US$1.
"The reason why piracy's come along is that there weren't enough products at the right price soon enough," said Tony Vaughan, managing director of CAV Warner Home Entertainment Co, Warner Bros' joint venture distribution company in China.
Warner's strategy has been "to build a legitimate, viable offering for the Chinese consumer," he said.
The war against rampant counterfeit movies, drugs and other products is moving from China's back alleys and sidewalks into boardrooms and laboratories. Companies that once relied on lawsuits and police raids are diversifying their strategies, turning to competitive pricing and trying out new technologies to even up seemingly overwhelming odds.
Drug-maker Pfizer Inc of New London, Connecticut, is experimenting with attaching small radio-frequency identification chips to track packages of its erectile disfunction drug Viagra, popular knockoffs of which are widely available. The RFID tags, attached to packaging, can be scanned by a pharmacist to detect product codes showing their authenticity, and presumably weeding out fakes.
Confronted with widespread piracy of computer software, Microsoft Corp is using new products and advertising to promote the benefits of legitimate software. The new Windows Genuine Advantage program checks the authenticity of a user's software and provides access to Microsoft software and other benefits for Windows XP users. The company is also offering low-cost versions of Windows starter software in some countries.
"Do you really want an `adventure?'" says a Microsoft banner greeting arriving passengers at Shanghai's Hongqiao Airport.
Lian Hoon Lim, a consultant at AT Kearney in Hong Kong, recommends a "portfolio approach" to clients: A combination of secrecy, careful research of local partners, new technology and business strategies, as well legally enforcing patents and trademark rights.
"It's not a problem for which there is a clear silver bullet," Lian said. "The message is that people who want to do business in China have to expect to spend money to protect themselves."
Worldwide, sales of counterfeit products may run as high as US$650 billion a year, the International Chamber of Commerce in Geneva estimates. The global black market for counterfeit pharmaceuticals is worth up to US$32 billion.
In many industries, China accounts for the largest share of pirated products. Almost 70 percent of US Customs seizures of pirated goods are traced back to China.
Despite the new initiatives, though, the pirates appear to have the upper hand. International criminal syndicates are devoting increasing technical prowess to foil anti-counterfeiting packaging and extend their distribution into major Western markets, said Lee Bromberg, head of the patent litigation department at the Boston-based law firm Bromberg & Sunstein.
"For every preventive measure companies take, the wise guys will find it and you're back to square one," Bromberg said. "I don't think the good guys are winning yet."
Still, from medical products makers in Salt Lake City, Utah, to software designers in San Jose, California, companies are awakening to the need for varied approaches to coping with piracy.
"Intellectual property protection has made the transition from a lawyer's issue to a mainstream issue," said Jeffrey Bernstein, chairman of the American Chamber of Commerce in Shanghai.
In its effort, Warner Bros. turned to China's state-owned distributor for audiovisual products, making it a partner. Affiliated with the Culture Ministry, the Chinese company has its own vested interest in seeing piracy stamped out.
Vaughan said his team in Shanghai, recruited from top foreign companies and universities, is tackling piracy from the high and low ends of the market. Commemorative albums and limited editions -- such as a John Lennon 25th anniversary DVD complete with miniature guitar case and sunglasses -- sell for US$20 or more and have proved popular as gifts.
Warner is also experimenting with releases in China's provincial cities of cheaper, simply packaged DVDs that sell for under US$1.85.
Vaughan would not disclose any sales figures, but said they were in line with expectations.
"We're seeing some early signs that things are going in the right direction," he said.
In other industries, secrecy remains the mainstay.
Household names like the spray lubricant WD-40 and Coca Cola have managed to protect their businesses by using closely guarded formulas. Lian said he urges companies to keep some of their production processes outside China.
"The most effective methods are focused on keeping part of the production process secret," Lian said.
The RFID tags that Pfizer and other drug companies are putting on their packages are also being adapted for use on cigarette packaging, specialty materials and jewelry, said Rod Chui of Hong Kong RFID, a high-tech firm in Hong Kong that is developing the products.
But such technologies are in their infancy and it is unclear whether they will deter piracy or be worth the added costs.
ROLLER-COASTER RIDE: More than five earthquakes ranging from magnitude 4.4 to 5.5 on the Richter scale shook eastern Taiwan in rapid succession yesterday afternoon Back-to-back weather fronts are forecast to hit Taiwan this week, resulting in rain across the nation in the coming days, the Central Weather Administration said yesterday, as it also warned residents in mountainous regions to be wary of landslides and rockfalls. As the first front approached, sporadic rainfall began in central and northern parts of Taiwan yesterday, the agency said, adding that rain is forecast to intensify in those regions today, while brief showers would also affect other parts of the nation. A second weather system is forecast to arrive on Thursday, bringing additional rain to the whole nation until Sunday, it
CONDITIONAL: The PRC imposes secret requirements that the funding it provides cannot be spent in states with diplomatic relations with Taiwan, Emma Reilly said China has been bribing UN officials to obtain “special benefits” and to block funding from countries that have diplomatic ties with Taiwan, a former UN employee told the British House of Commons on Tuesday. At a House of Commons Foreign Affairs Committee hearing into “international relations within the multilateral system,” former Office of the UN High Commissioner for Human Rights (OHCHR) employee Emma Reilly said in a written statement that “Beijing paid bribes to the two successive Presidents of the [UN] General Assembly” during the two-year negotiation of the Sustainable Development Goals. Another way China exercises influence within the UN Secretariat is
LANDSLIDES POSSIBLE: The agency advised the public to avoid visiting mountainous regions due to more expected aftershocks and rainfall from a series of weather fronts A series of earthquakes over the past few days were likely aftershocks of the April 3 earthquake in Hualien County, with further aftershocks to be expected for up to a year, the Central Weather Administration (CWA) said yesterday. Based on the nation’s experience after the quake on Sept. 21, 1999, more aftershocks are possible over the next six months to a year, the agency said. A total of 103 earthquakes of magnitude 4 on the local magnitude scale or higher hit Hualien County from 5:08pm on Monday to 10:27am yesterday, with 27 of them exceeding magnitude 5. They included two, of magnitude
Taiwan’s first drag queen to compete on the internationally acclaimed RuPaul’s Drag Race, Nymphia Wind (妮妃雅), was on Friday crowned the “Next Drag Superstar.” Dressed in a sparkling banana dress, Nymphia Wind swept onto the stage for the final, and stole the show. “Taiwan this is for you,” she said right after show host RuPaul announced her as the winner. “To those who feel like they don’t belong, just remember to live fearlessly and to live their truth,” she said on stage. One of the frontrunners for the past 15 episodes, the 28-year-old breezed through to the final after weeks of showcasing her unique