Warner, Paramount in anti-piracy move

updated 10:49 a.m. ET Nov. 7, 2007

BEIJING - Paramount Pictures will sell DVDs through Warner Bros. outlets in China as the Hollywood rivals join forces to fight rampant movie piracy by bringing low-cost legitimate goods quickly to market, the studios said Wednesday.

Warner, Paramount and Paramount's Dreamworks affiliate will sell new titles for $3 in China as little as two months after their U.S. theatrical release, the companies said. They said that will be the earliest release and lowest price in any market worldwide.

"It's our way of fighting piracy," said Tony Vaughan, managing director of CAV Warner Home Entertainment Co., Warner Bros.' joint venture China distribution company.

Warner, owned by Time Inc., launched its China sales network in 2005 to fight piracy by selling bargain-priced DVDs. The company says it now has some 20,000 outlets in 50 cities and has sold some 400 titles.

"We're committed to developing a legitimate market in China, and having two more Hollywood studios gives us more critical mass," Vaughan said at a news conference attended by executives of Warner and Paramount.

China is the world's leading source for illegally copied movies.

Pirates can get DVDs on the street less than a week after a title's release abroad and months before a legitimate DVD is available. They sell for as little as 68 cents. The Motion Picture Association, a trade group for Hollywood studios, says more than 90 percent of DVDs in China are pirated.

The deal marks the first time legitimate Paramount DVDs will be available in China, said Philippe Cardon, the president of Warner Home Video's international division.

"We see a bright future for the legitimate DVD market in China," he said.

Paramount's first release in China will be "Transformers," followed by "Shrek the Third," said Dennis Maguire, president of Paramount Home Video's international division.

The MPA says film piracy in China is believed to have cost American studios $244 million and Chinese studios $2.4 billion in lost potential box office revenues in China in 2005, the last year for which the group has released figures.

Beijing has increased penalties for product piracy and stepped up enforcement under foreign pressure. But the MPA and other industry groups say piracy is growing faster than enforcement, driven by China's explosive economic growth.

Foreign studios have won a handful of lawsuits against Chinese stores that sell pirated movies. But the awards are only a few thousand dollars and the MPA says the judgments are too small amid the huge scale of violations.

"We are conscious of the high rate of piracy and we will be working with our partners and the relevant authorities to address this issue," Maguire said.

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