RUSSIA: PIRATE VIDEOS ARE BIG BUSINESS

(28 Jun 1995) Russian/Eng/ Nat

Video and software piracy has become a multi-million dollar industry in Russia. But under threats of trade sanctions by the U-S, Russia says they'll crack down on the pirates.

Russian intellectual piracy costs American companies 800 (m) million dollars a year- according to U-S trade officials- and the country now accounts for 10 per cent of all U-S losses on the sale of pirate film and videos worldwide.

APTV slipped inside one video-pirate's factory and found out just how easy it is to make a buck in this black market industry.

This weekend market - in the centre of Moscow- is proof of the flourishing video piracy industry. It started in the Soviet era, selling bootleg copies of Western rock. But it's now become the largest market in Russia for pirated videos, cassettes, compact discs and
computer software.

With no enforcement of copyright laws in Russia, hundreds of firms are in the business of pirating.

SOUNDBITE: (Russian)

"The prices here are pretty cheap compared with the state and private shops. And you can choose anything you like here. You can even find things which are not in the shops."

SUPERCAPTION: Lena Danilants, Shopper

With potential profits so high, video piracy has become a cut-throat business in Russia. Security is tight in this basement
factory in St Petersburg.

In a makeshift studio five people work 20 hours a day copying Western videos. Each blank cassette costs them 4 cents- they sell the finished product for around 5 dollars.

The head of the studio- who asked that his identity be protected- claims he made more than a (m) million dollars last year.

SOUNDBITE: (Russian)

"This is a powerful, completely informal system which regulates itself. It is subject to no laws but is a genuine market with its own laws and you can't ignore them.

SUPERCAPTION: Head of St Petersburg pirate video company

Such is the power of the industry that they're making up copies of the new Kevin Costner movie "Waterworld", the most expensive Hollywood film ever made. The film won't be released in theatres in the U-S until the end of the summer.

Copies of the latest Western releases reach Russia via an established trade route which originates in the Hollywood studios.

SOUNDBITE: (Russian)

" Within literally two days the whole market in Russia, the Baltics and the CIS is flooded with the copies. You can't do anything to stop it. Everyone has been bought off. It's a route paved with gold and you can't fight it."

SUPERCAPTION: Head of St Petersburg pirate video company

One man is trying to convince the pirates to go legal.

Christopher Abel-Smith manages Varus Video, a company which copies and distributes Western movies legally in Russia.

Their cassettes cost twice as much as pirate copies.

SOUNDBITE:

"If you're being asked to pay 20 per cent of your monthly salary to buy a CD or video cassette, what are you going to do if someone is going to offer you the same product at a similar quality, or a quality you find acceptable for two-three dollars, you're going to go and buy it."

SUPERCAPTION: Christopher Abel-Smith

Abel-Smith is working with the Russian government to improve enforcement of intellectual property laws which took effect last year.

With U-S trade sanctions looming, Abel-Smith is confident that he can persuade the pirates that it's in their interests to join Varus Video.

Either that or lose the (m) millions of dollars they've invested in equipping their studios with hi-tech machines.

His optimism is not shared by Russia's video pirates.




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