China's Piracy - Let's Exaggerate!

SHANGHAI (Reuters) - Piracy in China cost film makers $2.7 billion last year, with domestic firms shouldering more than half those losses, according to a study commissioned by a trade group representing the major Hollywood studios.

Really? Do these figures come from "retail prices" sold to "consumers" that could/would never pay those prices? And on films China is not allowing into the country? Probably. The MPA and RIAA need a reality check - you can't count a $16 dollar loss from a "potential" consumer that makes $16 dollars a week.

China's film industry lost about $1.5 billion in revenue to piracy last year, while the major U.S. studios lost $565 million, according to data released on Monday by the Motion Picture Association (MPA), whose members include the studio units of Time Warner, Walt Disney Co. and Viacom Inc..

The study was the first for China done by a third party, LEK Consulting, for the MPA, which previously did a similar annual study itself.

The 2005 losses to U.S. studios were well above the MPA's own previous estimate of $178 million lost to piracy in 2003.

Some 93 percent of all movie sales in China were of pirated versions of films, according to the latest study.

"In terms of who's losing the most here in China, it's not the MPAs member companies. It's the local industry," said Mike Ellis, who heads the MPA's Asia Pacific division.

The study also found that the Internet is becoming a growing source of piracy in China, though pirated discs still accounted for the majority of lost sales last year.

According to the report, illegally downloaded films cost the industry $1.04 billion in China last year, while pirated video discs accounted for $1.63 billion in lost revenue.