PIRATES RACE AGAINST TIME 'SPIDER-MAN 2' AVAILABLE HOURS AFTER PREMIERE, SAY WORRIED INDUSTRY REPS.

Byline: Greg Hernandez Staff Writer

LAS VEGAS - The film industry is in a race against time as tech-savvy movie pirates are increasingly able to get high-quality copies of new releases online within hours of their theater debuts.

Last summer's blockbuster ``Spider-Man 2,'' for example, was downloadable in first-rate form within seven hours of its premiere to the public, theater owners were told Wednesday at the ShoWest 2005 convention, where theater owners and movie distributors meet annually. The conference concludes today.

``It is big, bad and coming at us faster than you probably know,'' said Richard Atkinson, executive director of systems integration at Walt Disney Studios. ``Every film is pirated within 72 hours once it's in the public domain. It gets camcorded off the screen. The quality of early camcording has gotten so much better.''

While the industry has been grappling with piracy for several years, the rapid spread of these high-quality downloads has added an alarming new challenge. Only two years ago, it took 72 days to get a highly watchable version of ``Finding Nemo'' online. John Fithian, president of the National Association of Theater Owners, told the audience about ``how incredibly adept our adversaries have become.''

``Piracy is the greatest challenge and threat to our collective movie industry,'' Fithian said.

Previously, it was grainy, poor-quality versions that would come out quickly but the bar was moved up dramatically with ``Kill Bill: Vol. 2'' last year when within four days, sharp-looking and -sounding versions of the film were available in English, German and French-Canadian. That was followed by an 18-hour turnaround for ``Shrek 2'' then the seven hours for ``Spider-Man 2.''

The global reach of piracy was illustrated Wednesday by examining the first 30 days in theaters of ``The Incredibles'' last fall. After a person in New York put the movie online, it took less than 24 hours to reach Indonesia.

During the month, that initial pirated version had been downloaded in Mexico, Russia, China, Korea, Argentina and Venezuela. As of Tuesday, nearly 4 million people had achieved a full download of ``The Incredibles'' from the Internet.

The ``Kill Bill'' example was most chilling because it demonstrated that if people have access to a high-quality copy of a new release so quickly, piracy could affect opening-weekend ticket sales in a way it never did before.

``It's on the Internet and people are pulling it down all around the world and burning it,'' Atkinson said. ``In every major world market, within 14 days there are folks on the street corners and swap meets directly competing with our business.''

The industry is no longer battling small-time ``tech vandals'' who illegally make pirated movies available for downloading more for sport than financial gain. There are also a growing number of garage-like operations that burn Internet versions onto discs and sell locally.

But the most ominous threat is the proliferation of highly professional replication facilities that produce pirated movies at a high speed with high-quality packaging that can be sold on the street or online with the average customer essentially unable to tell that they are buying illegal goods.

``We are talking about very robust networks out there,'' said Atkinson. ``(People) tend to believe that if it looks good and it seems real, then it is real.''

John Malcolm, senior vice president and director of worldwide anti-piracy operations for the MPAA, quoted a study that estimates that the movie industry will lose $5.4 billion in 2005 due to street sales of pirated movies. Losses from downloads were said to be $858 million in 2004.

Malcolm said organized crime rings are running large-scale piracy operations because of their tremendously high profit margins and lower threats of fines and jail time when compared to the sale of drugs.

He cited an example of an 800 percent profit on a pirated DVD made in Malaysia and sold in the United Kingdom compared to a 100 percent profit on the sale of cocaine and a 420 percent profit on the sale of heroin.

``These people play for keeps,'' said Malcom, who told the audience that movie piracy is increasingly becoming ``the preferred method of funding for terrorist groups.''

ShoWest attendees were given a firsthand look this week at the heavy security practices that now take place at early industry screenings of films where incidents of camcording have virtually been eliminated.

On Tuesday evening, hundreds of theater owners and studio executives were forced to check in cell phones, cameras and computers outside the theater in the Paris Hotel prior to a screening of ``Miss Congeniality 2: Armed and Dangerous,'' then had to endure a hand metal detector before being let in the door.

Greg Hernandez, [phone]

greg.hernandez(at)dailynews.com

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Photo:

(color) A man and woman pass an ad for ``Mr. and Mrs. Smith'' at ShoWest, an annual convention of theater owners in Las Vegas, where industry representatives expressed worry over the speed with which pirates can get new movies online illegally.

Isaac Brekken/Associated Press