Highlights
– Organized crime syndicates are increasing their role in film piracy
– Swedish police seize server in a raid on a file-sharing site
– Improved laws and international coordination between law enforcement agencies needed to effectively combat film piracy worldwide
Organized crime syndicates are increasing their role in film piracy, according to a new report released by the RAND Corporation on March 3, 2009. The report entitled ‘Film Piracy, Organized Crime, and Terrorism’ was commissioned by the Motion Picture Association (the international arm of the Motion Picture Association of America) and attempts to show a connection between profits derived from criminal syndicates creating pirated movies, music and electronic games and the funding of criminal and terrorist activities around the globe. The report states that crime syndicates have become involved in the entire supply chain of illegal films, from their initial manufacture to the final sale conducted on the streets.
While the report cites only a handful of examples where the profits from piracy have been used to support terrorist activities, the report predicts that the low risk and high profit margins associated with piracy will continue to attract more criminal enterprises. In one example, the report cites a pirated digital video disc (DVD) made in Malaysia for 70 cents that was marked up more than 1,000 percent and sold on the street in London for approximately US$9. According to the report, the profit margin was more than three times higher than the markup for Iranian heroin, and higher than the profit for Columbian cocaine.
RAND Findings on Piracy
RAND researchers documented 14 case studies of film piracy – throughout North America, Europe, South America, Russia and Asia – where organized crime played a role in a film’s production and dissemination. A detailed look at three different cases exposed examples where piracy helped support terrorist groups. In one of the case studies, an organized crime group active for generations in India called D-Company became involved in film piracy in the 1980s. The group became a terrorist organization when it carried out the “Black Friday” bombings in Mumbai in 1993 that killed more than 257 people and injured hundreds more. The report also discussed at least one transfer of US$3.5 million to the terrorist organization Hezbollah by known DVD pirate Assad Ahmad Barakat. Barakat was labeled a “specially designated global terrorist” by the US government in 2004.
The relatively low technological knowledge and equipment investment needed to make pirated DVDs combined with the high profit margins and low risk of being caught (or even prosecuted, if caught) can providing fertile ground for these types of operations to flourish around the world. We believe that a combination of relatively light criminal penalties combined with sparse law enforcement and prosecutions will allow piracy operations to continue to grow and flourish in the medium to long-term.
More International Cooperation Needed To Combat Piracy
Worldwide piracy in all its forms has not only contributed to the financial success of criminal enterprises and terrorist organizations, but has also dealt a deep financial blow to the movie industry. While technology has thus far been unable to put a significant damper on piracy, many in the industry are looking to create anti-piracy laws in the countries where they don’t exist and increase criminal penalties where they may be too light. They are also seeking to increase the number of cases investigated and garner successful prosecution. Industry representatives and lobbyists will use the RAND report to increase support for crackdowns on piracy activities worldwide. Such moves will help improve anti-piracy laws in countries where film piracy has been greatest.
