SeanPAune

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September 1 2006

Just how dumb do they think consumers are?

Very interesting story over at MSNBC.com about how Warner Brothers is going to try to combat DVD piracy in China.

Typically you can pick up a new movie in pirated DVD form within 2 – 3 days of it hitting the theaters anywhere in China. The quality isn’t the best, but it’s about a $1 for the DVD, and far cheaper than going to the theater. Warner Brothers has decided they will start releasing DVDs themselves within about 12 days for a $1.25. They figure people will wait the few extra days for the quality.

One part in paticular lept out at me:

Warner Bros. is one of the first studios to aggressively combat the losses Hollywood is suffering because of pirated DVDs. According to the Motion Picture Association, the organization which represents major Hollywood studios, piracy cost U.S. filmmakers an estimated $565 million last year. The study indicates that nearly 93 percent of all movie sales in China were pirated versions.

Shall we start to find the flaws in all this? Good, I knew you would want to!

1) How did street piracy in China cost filmmakers an estimated $565 million last year if those people couldn’t afford to go to the movies in the first place? Answer is, it didn’t. That’s revenue they wouldn’t have gotten anyway.

2) This is the one that really kills me, Warner Brothers just basically told everyone it costs them pennies to make a DVD. Sure, we all know it, but they just confirmed it by selling them for $1.25 in China. They may not have all the extras, it may just be the plain-jane version of the movie, it still says that WB will be making a profit and they are wildely overcharging those of us in “first world” countries.

I went over to Amazon.com and found the cheapest version I could of Batman Begins, a Warner Brothers release. The Amazon price is $14.99, and that’s 25% off the list price of $19.98. Under this new WB policy in China, it would be a $1.25. How is this fair to consumers in other countries?

Here’s the other thing, I am sure Warner Brothers will copy-protect these DVDs, but there are tons of ways around that. So, within 12 days of a film coming out, there will be DVD-quality copies of them film out there in the world, meaning they will be on the illegal download sites within a day or so of that. If anything, the WB has just INCREASED piracy rather than fight it. And with high speed internet access spreading across China, they’re cheap copies they are using to “fight” piracy, will be spread world-wide in a matter of hours. What will their “estimated” losses be then?

I do not endorse piracy in any way, it is rampant in the Anime business, and it has a direct impact on my business. I am one of the few dealers in the community who can say that I am 100% bootleg product free, and it is something I am very proud of. That being said, I think this is one of those occasions where it would have been better for everyone to just turn a blind eye to it, because I think their cure is worse than the disease this time.



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  • You have definitely pointed out the two biggest flaws in this so-called “business plan” from Warner Brothers. Yeah, now that I know they can make and sell DVDs for $1.25, I’m not really going to be too keen on spending $15 or $20 for the same thing in the U.S.