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Why Warner Brothers is cracking down on Canada

TORONTO AND OTTAWA— From Wednesday's Globe and Mail

Federal politicians insisted Tuesday that changes are imminent to crack down on illegal camcording in Canadian movie theatres, after a major film studio decided to cancel all its preview screenings in Canada, starting with Ocean's Thirteen and the next Harry Potter film in July.

Warner Bros. Pictures Canada said it was forced to make the move after watching film piracy of its top movie titles escalate in the past few years. Dan Fellman, president of domestic distribution, said Tuesday illegal camcording across Canada increased 24 per cent in 2006 over the previous year.

“There is no indication that this isn't going to continue to grow in 2007,” he said. “This country has become a video-piracy hub.”

Heritage Canada Minister Bev Oda said in a statement Tuesday that she and Justice Minister Rob Nicholson are working on ways to deal with the problem.

“Our government is aware of the problem of piracy and the role of camcording in contributing to that problem,” the statement said. “We are committed to protect the work of creators and take this issue seriously.”

Ms. Oda did not give details and would not answer questions on the subject.

Two parliamentary committees have recently studied the piracy issue and are set to issue reports over the coming weeks that will urge the government to crack down on pirates operating brazenly in theatres across the country. The content of the reports is confidential so far, but MPs on both committees have spoken in favour of enshrining the offence in the Criminal Code.

“We have a serious problem with [camcording in theatres] not being in the Criminal Code; that's a no-brainer to fix,” said New Democrat MP Brian Masse who sits on the House industry committee.

“There's the notion that it's a victimless crime,” said Liberal MP Roy Cullen, who sits on the House public safety committee, which has also studied the issue and is set to issue a report. Mr. Cullen said he is also in favour of amending the Criminal Code to include movie piracy.

Canada – particularly Montreal – is known as one of the world's worst offenders for piracy, rivalling places such as China, Lebanon and the Philippines. A Motion Picture Association analysis of counterfeit discs in 2005 revealed close to 75 per cent of all films illegally camcorded in Canada were recorded in theatres in and around Montreal, recently identified as the No. 1 city in the world for surreptitious camcording.

The reason? Pirates can easily create both English- and French-language masters.

Cineplex Entertainment – in conjunction with the Canadian Motion Picture Distributors Association, the RCMP and other movie chains such as Empire and AMC – have spent the past few years lobbying the federal government to make it a criminal offence to pirate films.

The U.S. Motion Picture Association claims that in 2005, piracy cost U.S. studios $6.1-billion (U.S.). Its Canadian counterpart estimates its members lost $118-million (U.S.) the same year.

Tuesday, one industry veteran described the Warner Brothers' preview blackout as a shot-over-the-bow designed to shake up federal officials. He pointed out it will have minimal impact on exhibitors or consumers because Warners' advance screenings total anywhere from 50 to 150 a year.

So far, no other major studios, including Twentieth-Century Fox, Disney or Columbia TriStar, have indicated they plan to follow suit. Warner Brothers' crackdown means previews of its top-line features will not be entered into film festivals this summer, but it's unclear whether Warner will maintain the policy by the time the influential Toronto International Film Festival kicks off in September.

The piracy issue heated up in January after The Globe and Mail published an article detailing how Fox's Hollywood-based president of domestic distribution had sent a blistering letter to Ellis Jacob, the Toronto-based chief executive of Cineplex Entertainment, Canada's biggest cinema chain.

Spitting mad after pinpointing Canadian theatres as the source of a steady stream of illegal camcording, Fox threatened to do something unprecedented: stop sending copies of all its films to Cineplex's 130 movie houses, or push back the Canadian release of popular films until weeks after the U.S. release date.

In the United States, 38 of the 50 states have specific laws that impose criminal sanctions against camcorder pirates, both fines and jail sentences. But in Canada, says Doug Frith, the president of the Canadian Motion Picture Distributors Association, the theft of intellectual property is treated as a “soft crime,” with exhibitors helpless to confiscate cameras or detain suspects.

After his annual general meeting Tuesday, Cineplex's Mr. Jacob said the lack of enforcement means his staff often has to do bag checks at theatre entrances. Last Friday – the opening night of the blockbuster Spider Man 3 – his staff checked the belongings of everyone who attended the midnight show.

“We have to keep a step ahead of the criminals because – this is to me – is a organized criminal activity,” he said. “It's not being done by young kids who are going in there for fun.

“It's embarrassing for Canada to be in position where we are one of the leading countries” for movie piracy, he said. “What has happened is that technology has changed, but the copyright laws haven't kept pace with it.”

With a report from Shirley Won