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JULY 14, 2003
Tinseltown's Aim: To Catch a Thief Jim Carrey was there. So were Jennifer Aniston and Morgan Freeman. Far less visible at the May 21 premiere of Bruce Almighty, amid the moguls, stars, and fans, were the latest members of Hollywood's A-list: Rent-a-cops who patrolled the upper balconies at the cavernous Universal Amphitheater, prowling for pirates with camcorders. Hollywood is in full crackdown mode for crooks who pilfer films by recording them at premieres and press screenings. Metal detectors meet most folks at these shows, along with stern signs warning against copying. As part of its ban on all electronic equipment, Fox Entertainment Group earlier this year barred cell phones at one screening. And Hollywood is developing jamming devices that will disable camcorders and other electronic gizmos inside a theater. "We take this very seriously. These are criminals we're talking about," says Fox Filmed Entertainment Chairman Jim Gianopulos. More than 50 films were stolen this year before they were shown on screen, says the Motion Picture Assn. of America. Often, say MPAA enforcement officials, thieves get $10,000 apiece for the hottest films, which are then shuttled to crime syndicates in Taiwan, Thailand, and elsewhere in Asia, to be mass produced. Then the pirated DVDs are sold on the streets of Asian, European, and U.S. cities. The margins are huge. Counterfeiters can sell the DVDs, which cost 62 cents apiece, for as much as $15. Studios, which lost an estimated $3 billion to counterfeiting last year, are also staging raids on DVD plants. The MPAA, working with a network of informants and local police, closed down 63 illegal factories in Asia this year, 12 in Malaysia alone. But prosecution is lax in many Asian countries because gangs threaten prosecutors and judges, says MPAA Asian enforcement chief Mike Ellis. Sentences can be light for those who are nabbed. Last year, a Singapore pirate caught with more than 2,000 pirated DVDs got 18 months. Hollywood is making some headway in keeping films out of thieves' hands. In April, FBI agents nabbed a man camcording Paramount Pictures' sci-fi flick The Core at a media screening. In its most impressive collar yet, Universal and the FBI used a "tag" digitally embedded in The Hulk to trace a pirated version of the film to 25-year-old Kerry Gonzalez. The New Jersey man received the film from a friend at the studio's New York ad agency and put it on the Net weeks ahead of the movie's opening. Gonzalez, who pleaded guilty on June 25 to making an unauthorized digital copy, faces a possible maximum $250,000 fine and up to three years in prison. "We are sending a message here," says Universal Studios (V ) President Rick Finkelstein. On the Net, studios intend to be even more vigilant. Hollywood's trade group plans to ratchet up a campaign to send out cease-and-desist letters to online pirate services: Last year it mailed 163,000 warnings and sent off so-called spoof movies to trip up pirates. The studios have resisted suing their customers directly, as the recording industry is now doing, but execs hope the music crackdown will be a deterrent for all pirates. "Litigation should scare people," says Sir Howard Stringer, CEO of Sony Corp. of America. Hollywood has already begun to poke fun at its own plight. Earlier this year, a flood of DVDs, sent out to Academy Award voters, found their way onto the black market. Oscar host Steve Martin joked about it on this year's telecast, kidding that Meryl Streep had put her disks on eBay (EBAY ) The line got one of the biggest laughs of the night.  By Ronald Grover in Los Angeles Get BusinessWeek directly on your desktop with our RSS feeds.  Add BusinessWeek news to your Web site with our headline feed. Click to buy an e-print or reprint of a BusinessWeek or BusinessWeek Online story or video. To subscribe online to BusinessWeek magazine, please click here. Learn more, go to the BusinessWeekOnline home page  | | |
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