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Prices Dropped To Fight Piracy

(CelebrityAccess MediaWire) — Entertainment companies have created a new weapon to battle the rampant piracy in places like China, Russia and Mexico that has prevented Hollywood studios and major record label from tapping the full growth potential of these markets. Some companies are cutting prices on their legitimate DVDs and CDs low enough to challenge the pirates at their own game and reverse the piracy trend.

According to an article in the Wall Street Journal, Warner Brothers is going to try setting a DVD release price between $2 and $4 in China, and NBC Universal is considering a similar idea in Russia. The four major music companies have also started a similar program to fight the low-priced pirated CDs in Mexico.

The companies are going to follow Apple Computer’s iTunes Store model of reclaiming users lost to piracy, which it did by cutting digital music file prices down to 99 cents, by touting that fact that the legitimate discs are of superior quality despite only slightly higher cost.

Mexico was at one time the eighth-largest music market in the world, according to the WSJ. Decimated by a piracy rate that has climbed to more than 60%, a legitimate CD now costs about $12, while a pirated CD runs between 90 cents and $1.35. The four major music companies are conducting a month long experiment in the city of Guadalajara, selling hit compilations and collections by popular artists. The discs are specially labeled for street markets, and include minimal artwork and packaging. The final result is a $4.50 CD.

In China, it is estimated that 90% of all CDs sold are pirated. In Russia and Ukraine, the number is around 70%, according to the International Federation of the Phonographic Industry. Before the experiment in Guadalajara, the companies relied on raids to stop the piracy.

“Most of the programs have been enforcement-driven,” IFPI Latin America regional director Raul Vazquez told the WSJ. Go in with the police, try to clean up the markets, make sure you hit’em again. That only gives you temporary relief.”

The film industry also believes that a competitively priced legitimate DVD will compete with the pirated versions on the streets of China. –by CelebrityAccess Staff Writers