Before a single frame of “Spider-Man 2” was shot, Sony Pictures Entertainment launched a global effort to protect its summer blockbuster from piracy.
During production, daily film footage was locked overnight in vaults. When Sony conducted preview screenings on its lot near Los Angeles, guests were subjected to airport-style identification checks, metal detector scans and surveillance by security guards with infrared goggles.
“Everyone got wanded at every screening,” said Jeff Blake, the studio’s vice chairman. “Film reviewers, talent agents, artist managers, even Sony executives–including me.”
Each of the 10,000 theatrical prints was embedded with a unique digital tracking code. Sony also took the extraordinary precaution of delivering seven reels of film to each multiplex in two well-guarded shipments before its June 30, 2004, premiere.
One of those cinemas was the Loews Kips Bay Theatre in Manhattan. And somewhere in that first early morning audience in New York sat a bootlegger with a camcorder, the first link in a network of rampant global piracy.
Four hours after its premiere, a copy of “Spider-Man 2” was on the Internet. By morning, counterfeit DVDs showed up for sale in malls and makeshift stalls in the Philippines.
Within a week, street merchants were hawking pirated copies of “Spider-Man 2” in Scotland, Israel, Hong Kong, Peru and South Africa–and downtown Los Angeles. Within a month, Sony investigators had collected bootlegged “Spider-Man 2” DVDs from Australia, Southeast Asia, China, the Middle East, Europe, Africa, South America and the United States, nearly all of which traced back to the one copy made at the Loews Kips Bay.
“The lightning speed with which these copies spread around the planet was horrifying,” Blake said. “No matter how much you spend on security or what precautions you take, the grim truth is once a film gets uploaded on the Internet, suddenly it’s everywhere.”
The global flight of “Spider-Man 2” illustrates one of the ugly byproducts of the digital transformation of entertainment. In addition to creating profitable new businesses, such as movie DVDs and downloadable music services, digital technology has created an unprecedented opportunity for leeching by commercial pirates.
The Motion Picture Association of America claims that disc and tape counterfeiting siphoned off $3.5 billion in potential revenue last year, more than the industry made at the box office in any country except the United States. And the International Federation of Phonographic Industries estimates that 1 of every 3 music CDs sold last year, or 1.2 billion discs, was an illegal copy.
Despite a growing number of raids and arrests around the world, entertainment industry executives say the amount of disc bootlegging continues to grow. That’s because there is no shortage of eager bootleggers, as well as a variety of ways to cash in on piracy.
The shadowy network that brings pirated movies to market is elaborate and lucrative. In countries rich and poor, the rewards can be great and the risks minimal. Even small-time bootleggers can clear thousands of dollars a week. And when anti-piracy laws are enforced, the punishment is often light.
“Prosecuting these cases has been an uphill battle,” said Leroy Frazer Jr., chief of the special prosecutions bureau of the Manhattan district attorney’s office. “Judges don’t treat pirates as seriously as they do other criminals.”
Movie piracy typically begins with the “cammers,” who sneak tiny video cameras into darkened theaters and surreptitiously film new movies.
Some are believed to be amateurs who record movies for fun, and others–a couple of dozen, investigators guess–do it for pay. For example, one professional cammer boasted in his diary that he made up to $4,000 a week.
The cammer’s copy is manufactured into discs by two types of pirates: well-financed counterfeiters who use costly manufacturing plants to churn out tens of thousands of discs each day, and bootstrap entrepreneurs who burn hundreds of discs on home computers.
The discs ultimately are sold in malls, at market stalls and on blankets spread along a curb, or by roving peddlers who stash their wares in a bag. Many times the sellers are immigrants working for a flat daily fee. And the price typically is a quarter to half of what legitimate DVDs sell for, yet the profit margins can be higher than 70 percent.
Cammers can be ingenious, concealing their cameras under coats, in handbags or even in belt buckles. On opening night, three cammers were able to capture “Spider-Man 2.”
The codes embedded in each of the film’s prints–which were virtually invisible to the eye but could be detected by Sony investigators in the bootlegged DVDs–revealed precisely which theaters had been breached: the Loews Kips Bay and two others in Montreal and Los Angeles.
The recording from the Loews Kips Bay made its way almost immediately into the hands of Pirates of the Theatre, a group of bootleggers that trades movies through the Internet. Less than two hours after the midnight showing ended, the group had uploaded the movie to a private site for online pirates. From there it spread to other private sites, public chat rooms and online file-sharing networks.
A prolific “ripping crew”–a secretive coterie of geeks who race to obtain bootlegs and post them online–Pirates of the Theatre put more than 90 camcorder-recorded movies online from May 2004 to July 2005, according to VCDQuality.com, a Web site devoted to pirated movies and other goods online.
Although authorities have been able to penetrate a handful of movie ripping crews, they say they have no idea who runs Pirates of the Theatre, where it operates or how it gets its movies.
The Pirates’ version of “Spider-Man 2,” like most videos recorded in theaters, was marred by a loud, steady hiss and the back of a theater patron’s head bobbing in and out of the frame.
But that didn’t make it any less marketable.
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Most of the bootlegged “Spider-Man 2” discs were produced by disc manufacturing plants in Southeast Asia, China, Pakistan and Russia. Three-fourths of the 75.6 million pirated discs seized last year came from this kind of factory, the Motion Picture Association of America said.
The plants are expensive to set up, with the equipment for each DVD assembly line costing about $1 million. Given the cost, investigators suspect that many of the plants are backed by organized crime syndicates.
Another likelihood, they say, is that the same lines are used to produce authorized and bootlegged discs.
For example, in Malaysia–regarded by officials at the motion picture association as one of the top manufacturers of counterfeit DVDs–anti-piracy raiders found bootlegged discs last year at four licensed factories as well as seven unlicensed ones.
While Malaysian “Spider-Man 2” discs spread to the Philippines and other piracy hotbeds in the Pacific, bootleggers in Australia produced their own copies of the movie with computers and DVD recorders.
One such entrepreneur, investigators for the Australian Federation Against Copyright Theft say, is David Ngo (pronounced No), a stocky Filipino immigrant with an aquarium full of tropical fish. Ngo lives in St. Albans, a hardscrabble suburb of Melbourne.
Copies of “Spider-Man 2” with Ngo’s trademark “S” and “9” logos on the artwork were among the first to hit the streets in the province of Victoria and were widely available in Melbourne-area flea markets, said Neil Gane, the federation’s director of operations.
The group’s investigators, including an undercover agent known as Shadow who infiltrated Ngo’s operation in 2003, provided a detailed picture of its workings that year.
Ngo’s DVD recorders enabled him to burn 21 copies of a movie simultaneously in 20 to 30 minutes.
Brad Buckles, anti-piracy chief for the Recording Industry Association of America, says about three-fourths of the bootlegged CDs seized in the United States are produced in disc-burning operations like Ngo’s.
Hundreds of underground disc-burning rooms operate throughout New York and Los Angeles, linked to crude distribution networks capable of moving tens of thousands of contraband DVDs, tax-free, out of the trunks of beat-up cars, at street-corner stands and at swap meets every week.
The first person caught selling a counterfeit “Spider-Man 2” DVD was Moussa Baide, a 35-year-old illegal immigrant from New Guinea. At dawn July 1, 2004, the day after the sequel’s midnight launch, Baide double-parked a van loaded with 3,000 bootlegs of “Spider-Man 2” in front of a warehouse on Broadway in Manhattan.
Detectives raided Baide’s van and the warehouse that day, unearthing 10 rooms of bogus recordings and confiscating an estimated 28,000 DVDs and 40,000 CDs.
Baide was eventually convicted of trademark counterfeiting and criminal possession of a forgery device. He spent a few nights in jail and was then sentenced to five years’ probation.