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Monday, April 24, 2006
Warner tackles Chinese piracy with cut-price DVD

Warner Home Video has begun trial sales in China of a movie DVD priced at just Rmb12 ($1.50), a move likely to anger consumers in developed markets such as Europe and the US, who typically pay $20-$30 for a recently released film on DVD.

The test sales of the modestly packaged edition of the The Aviator mark one of the boldest efforts yet by an international film company ? WHV's Chinese joint venture, CAV Warner ? to adjust its marketing strategies to the potentially huge but piracy-plagued Chinese DVD market.

The "simple pack" edition of the Oscar-winning epic, which comes in a cardboard folder rather than the standard DVD plastic box, went on sale earlier this month in selected Chinese cities, said Christine Hu, CAV Warner public relations manager.

"This is a first step to see if the consumer can accept this product at this price," Ms Hu said, adding that it was too early to judge the results of the experiment.

Hollywood studios have struggled to establish significant businesses in China because of tight government controls on the number of foreign films approved for release and rampant piracy in the DVD market.

Pirate producers have long benefited from loose enforcement of intellectual property laws in China and from state censorship that complicates DVD imports.

However, local distributors say that the best way to combat the pirates would be for international companies to cut both the time lag between the release of their films at the cinema and on DVD and the gulf in prices between legitimate products and pirated discs.

Pirate DVDs can easily be bought for prices starting at about Rmb6.

WHV has established itself as perhaps the most innovative of the foreign film companies since launching its joint venture with China Audio and Video Publishing House, a state company controlled by the Ministry of Culture, in February 2005.

Shanghai-based CAV Warner already sells recent-release films on DVD in a number of different packages.

"Silver releases" cost about Rmb22 and are often issued in all-Chinese versions that can go on sale in China a month before their US DVD release. CAV Warner later issues "gold releases" at about Rmb35 that include a number of extras.

Low prices are vital for a mass market used to cut-price pirate discs, but Ms Hu said there had been surprising demand for pricey box sets.

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