PIRATES PILLAGE MOVIE BIZ FILMS DUPLICATED WITHIN HOURS OF RELEASE.

Byline: Greg Hernandez Staff Writer

HOLLYWOOD - Virtually every film released by The Walt Disney Co. in the past year or so, from ``Finding Nemo'' to ``Pirates of the Caribbean'' to ``King Arthur,'' surfaced on the Internet for illegal downloading within two days of its U.S. theatrical debut, two company executives said Monday.

But even more alarming is the speed in which a version of DreamWorks ``Shrek 2'' was found online: five hours. While the initial online version was of poor quality, within 14 hours of theatrical release, a clean video version of the film dubbed in French could be downloaded.

``The problem is very much global,'' said Jeff Mirich, senior vice president and chief information officer of Walt Disney Pictures and Television. ``We are stacking the sandbags but the tide is rising.''

Mirich and Richard W. Atkinson, executive director of Walt Disney Pictures and Television, were featured speakers at an anti-piracy forum Monday at the Renaissance Hollywood Hotel. They shared their most recent research, which painted a sobering picture of how quickly piracy - aided by the latest technology - continues to escalate worldwide, whether it's a vendor selling copies on a blanket from a street corner or a state-of-the-art online service.

``We've got to work hard to try and keep the piracy problem in check until we can come up with alternate models so we can continue with our business,'' Mirich said.

It was with ``Kill Bill: Vol. 2'' that Disney executives realized the problem had escalated to a point where excellent high-quality versions of movies were being made available at rapid speed, as opposed to even a year ago when early copies were usually vastly inferior.

``We really saw things fundamentally shift,'' Atkinson said.

The change occurred when audio from films became available separately from video versions, so if a movie was secretly taped inside a movie theater with a camcorder, ambient sound such as people taking or eating popcorn was no longer apparent on these early bootleg copies. Clean sound could be downloaded off the Internet to match the video.

Further complicating the problem for Disney and other studios is the sophistication in which some of the piracy rings now sell their goods over the Internet. Many consumers are oblivious to the fact that they are buying a pirated movie because the billing is usually done by legitimate payment processing services and the DVD packaging is often of the same quality as a studio DVD because of advancements in computer graphics.

``It is harder for consumers to know it is wrong,'' Mirich said.

One of the biggest obstacles the industry faces is public attitudes toward piracy. The Disney executives conducted a global study that showed that while 94 percent of those surveyed believed that stealing a CD from a store is wrong in all instances, only 36 percent felt that taking intellectual property online is wrong in all instances.

``We're going to have a heckuva time if people don't believe it's wrong,'' Mirich said.

Also Monday, the Motion Picture Association announced the arrest of seven people who were allegedly operating a piracy lab in Taiwan. A raid resulted in the seizure of 230 CD burners and 50 DVD burners.

``The seizure of 280 burners is the second-largest single seizure of burners ever in Asia and translates to a big, big victory over organized criminal gangs who fund a wide range of criminal activity through optical disc piracy,'' Mike Ellis, the MPA's Asia-Pacific senior vice president, said in a statement.

The MPA estimates that its member companies lose more than $718 million in potential revenue each year in the Asia-Pacific region alone.

Greg Hernandez, [phone]

greg.hernandez(at)dailynews.com