[Infowarrior] - Pirates of the Canadians

[Richard Forno]

http://www.theglobeandmail.com/servlet/story/RTGAM.20070112.wpirates13/BNSto
ry/Entertainment/home

Pirates of the Canadians

GAYLE MACDONALD

>From Saturday's Globe and Mail

It was the kind of letter that can ruin a guy's day.

Late in November, Twentieth Century Fox fired off a blunt, one-page missive
to Ellis Jacob, the Toronto-based chief executive of Cineplex Entertainment,
Canada's biggest cinema chain.

Bruce Snyder, Fox's Hollywood-based president of domestic distribution, had
spent the last few weeks steaming mad after his team pinpointed Canadian
theatres ‹ primarily in Montreal ‹ as the source of illegal camcording of a
steady stream of Fox blockbusters, including Borat, Eragon and Night at the
Museum.

Snyder was sick of it. In the Nov. 30 letter, he warned Jacob, a friend and
business associate for 20 years, to do something ‹ or he would.

Then he threatened to do something unprecedented in Canadian distribution
history: Fox could stop sending copies of all its films to Cineplex
Entertainment's 130 movie houses, with close to 1,300 screens. Or, Fox might
decide to delay the Canadian release of popular films until a few weeks
after their U.S. release.

In the letter, Snyder fumed that his company had discerned that, at one
point during 2006, Canadian theatres were the source for nearly 50 per cent
of illegal camcords across the globe: ³Much like an out-of-control epidemic,
those Canadian camcords ... have become a leading source of worldwide
Internet film piracy.²

Jacob, whose company is the world's fourth-largest theatre chain in terms of
revenue and fifth-biggest measured by locations/screens, felt physically
ill. More so, he readily admits, because he recognized Snyder was absolutely
right. Cineplex Entertainment ‹ in conjunction with the Canadian Motion
Picture Distributors Association (CMPDA), the RCMP and other movie chains
such as Empire and AMC ‹ have been lobbying the federal government for years
to make it a criminal offence to pirate films. But so far their efforts have
fallen on deaf ears. Sophisticated thieves toting black-leather bags with
remote zooms, monitor devices and infrared sound receivers, and wearing
sweatshirts or jackets with special holes designed to surround the lens of a
camera, are having a field day.

For the third year in a row, the U.S. government has placed Canada on its
³watch list² for a lack of IPR (intellectual-property rights) enforcement,
which means this country is in the same company as notorious film-piracy
hubs such as Lebanon, China, the Philippines and Russia.

³We're doing everything we can, but we have problems with the government not
doing enough,² says Jacob. ³We've caught people camcording in our theatres,
but all we can do is tell them to leave, and they show up the next day
again.

³In the States, you're criminally charged because it's theft. Here, if
someone steals five DVDs from Blockbuster, law enforcement swoops down. But
someone leaves my theatre with a pirated video in his pocket, and we can't
get the police to come,² he says.

³We want people to come to the theatre and enjoy the experience. We don't
want to turn theatres into airport check-ins, but it might have to get to
that point.²

Reached by phone at his office in Beverly Hills, Calif., Snyder says he
understands Jacob's frustration with Canada's lax laws. But he adds that
unless Cineplex, other Canadian movie chains and the government crack down
on film piracy, he will have to take matters into his own hands.

Snyder is also considering pushing Canada's theatrical release behind the
U.S. date by a week or two. ³At least we would then have a running start
before we have to start competing with ourselves.²

The U.S. Motion Picture Association (MPA) claims that in 2005 piracy cost
American studios $6.1-billion (U.S.). In Canada, the CMPDA estimates its
members lost $118-million (U.S.) the same year.

³What drove us to write that letter was the blatant and continuing
camcording of our movies, primarily now in Montreal, but previously in
Toronto,² says Snyder, whose company, along with Fox Searchlight, is one of
the largest distributors in the world.

³Canada is now the prime culprit in the world. Once we started busting
people in New York, Detroit and Chicago, they quickly figured out the place
to be is in Canada. There simply are not enough teeth in your laws.²

In 2005, U.S. President George W. Bush signed the Family Entertainment and
Copyright Act, which made camcording in a theatre a federal felony. John
Fithian, president of the U.S. National Association of Theater Owners, adds
that 38 of the 50 states have specific state laws that impose criminal
sanctions against camcorder pirates, both fines and jail time.

But in Canada, the theft of intellectual property is basically treated as a
³soft crime,² says CMPDA president Doug Frith. ³Canada has done nothing to
remedy its lack of domestic enforcement and complete absence of border
enforcement.

³We're very frustrated with the legislative vacuum we have here,² adds
Frith, who points out that theatre operators have no right to detain an
individual they detect camcording a motion picture, or to confiscate their
recording. ³We're the laughing stock when it comes to piracy in the world.²

Frith says government bureaucrats try to placate him by saying that under
the Copyright Act exhibitors have the ability to charge someone criminally.
³But here's the catch. Under the Copyright Act, you have to prove that an
individual camcording in the theatre is doing it for distribution purposes.
That's almost impossible.

³Front-line employees catch a guy sitting in the front row camcording
Mission: Impossible III, they call police and they're told it's a matter for
the RCMP because [the] Copyright [Act] is federal.

³We don't want to have to prove the economic loss from distribution. We want
it to be a Criminal Code activity to be caught camcording. Period.²

The RCMP readily concedes there has been a radical growth in film piracy in
this country in recent years. With help from Interpol, it has also found a
clear link between organized crime and film piracy, often more profitable
than drug trafficking.

³If money is involved, organized crime is going to be involved,² says Andris
Zarins, the RCMP's national intellectual property crime co-ordinator.

With film piracy, the rewards can be huge, while the risks of any meaningful
law enforcement are currently low, Zarins adds.

Take the example of one of the few film pirates Canada has actually arrested
and prosecuted. Several months ago, police in Richmond, B.C., raided a small
business in a strip mall, seizing thousands of counterfeit DVDs. It arrested
the owner, 46-year-old Chiu Lau, who was fined (for his third time in three
years) under the Copyright Act.

Last Remembrance Day, Lau pleaded guilty to 83 counts under the Copyright
Act. He got a $5,000 fine and a 12-month conditional sentence. A further
wrist slap? He was confined to his home from 11 p.m. to 7 a.m.

³Minimal fines of $5,000 or $6,000 are a joke,² says Frith. ³These guys view
it as a cost of doing business. If we raid them on Friday, they're back in
business on Monday morning.²

Contrast that to the arrest of Hollywood's so-called ³Prince of Piracy.²
Last month, Johnny Ray Gasca, 36, was sentenced to seven years in prison for
copyright infringement after multiple arrests and a 16-month manhunt. And
prior to that in New York, the FBI arrested 13 members of two large-scale
international movie-piracy rings that had been under surveillance for three
years. If convicted, each could face up to five years in prison. Last
October, New York Mayor Michael Bloomberg also vowed to find, sue and shut
down landlords who knowingly house people who sell pirated DVDs.

Last summer, Toronto police ‹ with the help of the CMPDA ‹ busted a major
counterfeit DVD operation in another suburban strip mall, seizing 140 DVD-CD
burners, and 20,000 copies of counterfeit movies. They arrested four people.

Frith estimates the seized burners could have produced more than
three-million pirated discs in one year, worth about $17-million (Canadian).

³We want law enforcement to be able to go after those individuals ‹ to be
able to seize cash in the till, to go to their homes, to their cars. I'm not
blaming the RCMP. They have their priorities, what with border security and
terrorism, but we have a legislative and an enforcement vacuum. We have to
allow other police jurisdictions to assist the copyright industry.²

Fox's Snyder is particularly irked at the persistent amount of camcording he
and his distribution team have been able to track directly back to several
of Cineplex's Montreal theatres. (Fox and other studios use forensic
watermarking to know the exact time, date and auditorium where a copy was
made.) ³The reality is in 2005, 20 per cent of all identified camcordings
occurred in Canada,² says Frith. ³That's a huge number. And it's growing.

³These aren't individuals who want to make a few extra bucks,² he adds.
³They're extremely sophisticated organizations, who use the latest tools,
are well organized, tech savvy and well funded.

The scam attracts this calibre of crook because the pay is good. A good
camcording of a film can fetch $5,000 to $7,000 from pirate distributors.
Make two or three a weekend, Frith points out, and ³you're earning between
$500,000 and $700,000 a year.²

But there are plenty of amateurs in the game as well. Most people who view
pirated movies don't pay for them. They download them for free over the
Internet at websites such as BitTorrent or Shareaza.

There are some non-techie diehards, though, who still buy bootleg DVDs, out
of car trunks, in roadside stalls, flea markets, downtown shops and suburban
strip malls, in every city ‹ and most towns ‹ across Canada.

Often, the quality of these recordings is abysmal, with people chatting in
the background or heads popping up in the picture when a cinemagoer makes a
beeline for the concession stand. But some are good enough for the less
discerning movie fan.

But enterprising chaps like Gary ‹ a 37-year-old Durham, Ont., man ‹ have
found ways to make pirated DVDs they claim are as good as anything coming
off the shelves at Wal-Mart.

Gary ‹ not his real name ‹ heads into his local Blockbuster the instant a
feature film is released on DVD. He burns the movie, usually making up to
seven copies, the first night. He then sells his pirated DVDs for $10 a
piece to 150 of his closest friends. He says it's a great side business to
his full-time job, paying for all the little extras (like more sophisticated
software to make better pirated versions).

Does he feel any guilt? Not a bit. ³I look at what they charge in the
stores, $24.99, and it makes me sick. My copies are among the cheaper ones,²
he says, referring to competitors who charge up to $15 for a bootleg DVD.
³There are people who go through the General Motors plant with hockey bags
full of them.

³For a while I did black-market DVDs ‹ but they're generally bad quality and
customers got upset with them,² adds Gary, who purchased handheld versions
from a woman in a Markham strip mall who had them shipped in containers from
China. ³Those tapes stunk real bad, too,² Gary says with a laugh. ³That
woman's been arrested four times.²

Gary says he has his standards. ³I'd never download them off the Internet
and make copies,² he says. ³That leaves a record.²

Another Toronto resident says he buys pirated DVDs from his buddies who
regularly tape movies at the Alliance Atlantis cinema in the Beaches
neighbourhood. They go in with camcorders for the Saturday matinees. Like
Gary, this guy says he feels no remorse for essentially buying a piece of
stolen property, adding that, ³Hollywood is filled with a bunch of fat
cats.²

And the pace at which pirated copies of new theatrical releases are found
for sale as DVDs or on the Internet is dizzying. In 2003, the pirate DVD of
Pirates of the Caribbean did not appear until 65 to 75 days after theatrical
release.

Last year, the first pirate DVD purchase was made 13 hours after Poseidon's
first screening. The first pirate download was 42 hours after the movie made
its big-screen debut.

In the past 12 months, Fox sales manager Bert Livingston says he has sent
technology specialists, training personnel and the latest anti-piracy
equipment to Canada to help theatres try to catch the so-called ³cammers²
(people who shoot films covertly in theatres). ³We've tried everything. We
were hoping to try to stop it. But it just did not happen,² says Livingston.
³If we stop it in one theatre, they simply move to another theatre about
five miles further out into the suburbs.²

An MPA analysis of counterfeit discs in 2005 revealed close to 75 per cent
of all films illegally camcorded in Canada were recorded in theatres in and
around Montreal, recently identified as the No. 1 city in the world for
surreptitious camcording. The reason? Pirates can easily create both
English- and French-language masters.

The RCMP's Zarins says there is a major investigation under way in Montreal
now. ³Our members are working closely with the CMPDA on this. We partner
with the private sector as much as we can.²

A crackdown can't come too soon for Snyder, who says he's willing to take a
short-term financial hit by holding back his pictures to wake up Canadian
government officials and lawmakers to the severity of the problem.

³We'll give Cineplex a pass the first time we find someone camcording, or it
hits the Internet,² says Snyder. ³But the second time it happens, we will no
longer be playing Fox pictures ‹ or Fox Searchlight pictures ‹ there for an
indefinite period of time.

³We need our partners in exhibition to protect our films,² adds Snyder. ³But
if they won't ‹ or can't ‹ we won't put our movies at risk by putting them
in their theatres.²