Throughout much of Asia, counterfeit products -- from digital movies to medicines -- are everywhere, hurting manufacturers financially and sometimes posing serious dangers to the public. In an ongoing effort to combat product piracy, movie studios, software manufacturers, and pharmaceutical and fashion companies are working with local law enforcement to crack down on illegal production. But experts say stopping the supply -- without curbing the demand -- is a losing strategy.
Hong Kong's famous street markets used to be awash in counterfeit products. Tourists used to snap up copies of designer clothes, handbags and other famous brand products. While the government here has been able to curb these activities significantly by enacting tough laws and strictly enforcing them, pirated products are still being peddled.
The problem, experts say, is that people continue to want them.
.At a recent Asia-Pacific conference on intellectual property rights, Hong Kong's permanent secretary for commerce and industry, Yvonne Choi, said curbing counterfeit production is not enough. "We are mindful that just attacking the suppliers of pirated and counterfeit goods without addressing the demand side is not a sustainable policy. There was never a time or place where an activity could be eradicated if there was an unlimited market demand for it."
Hong Kong's government airs commercials, starring popular actors, to warn the public against buying pirated materials.
But it is easy to see why pirated goods have public appeal. In the Philippines, video CDs sell for only 20 cents. Movie tickets cost more than two dollars. Pirated copies of Hollywood blockbusters are sometimes available within days of their U.S. release.
The head of Hong Kong's intellectual property department, Stephen Selby, says it is not enough to just tell people piracy is bad. "The public gets tired of being told not to be naughty. There has got to be something in it for them. Usually we do things more willingly if we think we benefit in the end rather than just being told, ‘Uh-uh, naughty, ya-yay, you must not do that.’ "
Experts say the public must understand about dangers of using pirated material. That is easier when it comes to fake medicines or fake machinery parts, which can maim or kill the buyer.
But when it comes to creative property -- such as movies and fashion -- consumers need to understand the true cost of buying those products illegally and depriving the producers of their profit.
Industry experts say that if designers, inventors and moviemakers are not rewarded for their work, there is little to inspire them to produce new and innovative products for everyone. And this, experts say, hurts economic development.
Mike Ellis is with Hollywood's Motion Picture Association, or MPA. "The companies that I represent, on average, spend close to a $100 million to make and market a movie. And there's always this perception that they are affluent -- the people who are engaged in making those movies really don't need the money. That's simply not true. In America, when we release a film, one in 10 films actually makes a profit. And by the time we've released the film in all its media formats across the world, four out of 10 films will either break even or make a profit. So it is a very, very difficult business that they are in."
In addition to curbing consumer demand, experts say there also needs to be action on market access.
China has a particularly huge problem with an illegal market for pirated movies because Beijing restricts or censors foreign films. So the only way Chinese citizens can see the latest Hollywood blockbuster is to buy it illegally.
"We in the international film industry can only bring in 20 revenue-sharing films a year -- clearly no way near enough to meet demand of the consumers, who unfortunately have become accustomed to watching our films and just not paying for it in pirated copies. So if we can't get films in to meet those demands, then piracy will fill that void," says Ellis.
The MPA says China, the Philippines, Taiwan and Malaysia are major hotspots for movie piracy. Hollywood says it loses $6 billion a year from piracy -- one billion of that in the Asia-Pacific region.