Video Pirates Win Out, Industry Counts Cost

This evening, lights will dim in 2,000 movie theaters from New York to Hollywood for the U.S. premiere of "The Specialist," a multimillion-dollar blockbuster adventure film starring screen heavies Sylvester Stallone and Sharon Stone. The film, a sexy, action-packed look at bomb technology, has enjoyed all the gloss and fanfare of a high-profile Warner Brothers promotional campaign, and is expected to be one of the biggest hits of the season.


"The Specialist," however, is already enjoying considerable popularity in Russia, where the film has been on sale, in video form, for over a week. Vigilant movie fans have been buying up copies from Moscow kiosks since the film surfaced Sept. 29, accompanied by newspaper articles heralding its arrival.


Russians may be more excited by the ins and outs of Stallone's latest celluloid caper than by their own unsanctioned sneak preview. But the sudden appearance of "The Specialist" -- the first time a film has arrived in pirate form in Russia before its theatrical U.S. debut -- spells trouble for Western film companies trying to battle video pirating in hopes of getting a foothold in the growing Eastern European market.


"We'll definitely be seeing more and more films like this," said Igor Arkadyev, a journalist and film expert who compiles a chart of new Russian video releases for Joker, a weekly section of the Vecherny Klub newspaper. "Pirates are always looking for newer and easier channels to work through. If this channel is successful, and it seems like it is, I'm sure they'll stick with it."


A Warner Brothers representative said Thursday that the company was aware of the problem. "The matter is under investigation. We're obviously very, very concerned about it, but it doesn't affect our business anywhere, in any way," she said. The practice of video piracy -- the unlicensed copying and distribution of foreign-made films -- has boomed over the past year in Russia, with more and more Western films appearing in video kiosks and stores closer and closer to their U.S. release dates. But until "The Specialist," time was still on the studio's side -- at least as much time as it took for a copy of the film, either filmed straight from the screen or, more desirably, from a high-quality tape, to be flown to Russia and recopied for sale.


"Time Cop," the Jean-Claude Van Damme film currently topping the U.S. charts, had came closest to breaking the time barrier, appearing in Moscow just hours after its official release nearly three weeks ago, Arkadyev said.


Arkadyev speculated that both films, as well as a number of other new arrivals -- among them Oliver Stone's "Natural Born Killers" -- may be issuing a new breed of pirate videos. The films are less distorted than tryapochki, or "rag" copies filmed from the screen, but still grainier than videos taped from smuggled promotional copies, which are high in quality but intermittently flash giveaway warnings on the screen. Another strange aspect of the new videos, Arkadyev noted, is that none includes closing titles, instead fading abruptly with only the words "The End" appearing on the screen.


"This isn't the Russian mafia. This is obviously someone working from inside the studio in America," said Sergei Barkanov, whose weekly video column in Joker last Thursday described the release of "The Specialist" as a "sensation." "It looks like it was probably filmed from the screen, at some sort of advance showing, but using very good equipment. It's obviously not a promotional copy."


The copies, which were selling for 20,000 rubles last week, were issued by Videoman, a small video firm responsible for many of the "rag" videos on sale in Moscow over the last year, and one that makes a distinct point of not releasing its phone number or address. Firms typically buy unlicensed films for between $300 and $500 -- for "The Specialist," he said, Videoman may have paid upwards of $500.


It may have been money well spent. While Arkadyev said he doubted that Russian audiences cared about the film's special status, Barkanov said that Russians were "excited" about "The Specialist," and that the film was doing an especially brisk business, estimating that it may be currently making up 25 percent of all video sales in Moscow.


Other video studios were less impressed. A spokesman for Studio-1, one of the city's most prominent video firms, said people were becoming more interested in purchasing high-quality films -- videos taped from laser copies issued in the West.


"It doesn't really matter much that Videoman got there first," he said. "The real competition comes when the laser version comes out, which probably won't be until the beginning of next year. Then it's a matter of whoever gets there first."


Russia's video market is a small-stakes game compared to domestic U.S. movie and video profits, but according to Ray Markovich, president of Golden Ring Entertainment, which deals with developing venues for Western films in Eastern Europe, such piracy is problematic ultimately because it limits Western moneymaking prospects here.


"Studios are opposed to piracy because it prevents this market from providing the type of returns that a market this size is capable of," he said. "It doesn't adversely affect the profits in their primary market, which is the American market."