IT'S EVEN BIGGER THAN DRUGS CD, DVD PIRACY MAKES BILLIONS IN CHINA.

Byline: Greg Hernandez Staff Writer

BEVERLY HILLS - Movie piracy in China is costing the major film studios nearly $300 million a year, with more than nine out of every 10 DVDs sold in that country being a fake or stolen product, Motion Picture Association Chairman and CEO Dan Glickman said Monday.

Glickman was among those who testified at a U.S. Senate subcommittee hearing called by Sen. Tom Coburn, R-Okla., to discuss ways to ensure protection of American intellectual property rights in China.

``If you did not see a counterfeit DVD, you were not in China,'' Glickman said during the hearing, held at The Museum of Television and Radio. ``Unfortunately, I fear our collective perception of China has become so ingrained with the notion that China is overflowing with pirate DVDs we frequently fail to appreciate the magnitude of the problem.''

The theft of intellectual property in China has been a hot political topic this month and was among the issues discussed during President George W. Bush's visit to China, which ended Sunday, as well as during California Gov. Arnold Schwarzenegger's recent weeklong trip to the country.

``The bottom line is, American leaders in Washington need to get serious about how to handle this problem,'' Coburn said during the hearing. ``American jobs are at stake.''

In addition to Glickman, who represented the major studios, Coburn gathered together witnesses from the recording, software and technology industries who all urged that the U.S. put pressure on China to crack down on the practice in a country where there are few repercussions to deter the pirates.

``When it comes to ripping off our American sound recordings, China is one of the worst,'' testified songwriter Gary Burr, speaking on behalf of the Recording Industry Association of America. ``The problem remains as bad as ever. Realistic, meaningful penalties are never imposed.''

Glickman testified that the piracy problem is so rampant that the illegal films are readily available for purchase on virtually all street corners and packed on the shelves of audio-visual stores in just about every neighborhood.

He said the reasons for this epidemic are two-fold.

``First, China imposes strict limits on the number of foreign films that can be exhibited in its theaters on a revenue-sharing basis and applies burdensome regulations and confiscatory taxes on foreign home video and television content. This creates a marketplace vacuum that pirates are only too happy to fill,'' the MPAA chief said. ``Second, China has not asserted the political will necessary to reduce the level of piracy.''

Glickman also said the MPAA's Asia-Pacific Office recently completed a study on the link between movie piracy and organized crime. Criminal revenue from the theft of intellectual property reached $512 billion in 2004, dwarfing the $322 billion illegal narcotics trade.

The mark-up averages 1,150 percent on pirated DVDs that are made in Asia and sold in Europe, and the criminal risk in far lower than with drug smuggling.

``Part of the allure for organized crime to move into DVD piracy is the incredible profit margins, exponentially higher than for drugs,'' Glickman said.

Coburn, chairman of the Senate Homeland Securities and Governmental Affairs Subcommittee on Federal Financial Management, Government Information and International Security, said he will take his findings from the oversight hearing back to Washington to share with Congress.

Greg Hernandez, [phone]

greg.hernandez(at)dailynews.com