Chinese Movie Piracy May Cost American Studios Billions

By Douglas A. McIntyre Published Mar 3, 6:37AM EST

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China’s movie ticket sales have passed those in the United States, research firm EntGroup claims. The drawback of the data is that it does not include the fact that a large percentage of movies made by U.S. studios and seen in the People’s Republic are pirated.

In a new report EntGroup stated:

Chinese box-office revenue edged ahead of the United States in February for the first time ever as a record Lunar New Year bonanza brought in $650 million in the second-largest movie market, according to data from research firm Entgroup.

North American box office for February came in at $710 million, but once Canada is stripped out, the figure was $640 million, making China the biggest box-office market in the world for the month, the firm said.

Most of the films covered in the analysis are made in China, but the list also includes “The Hunger Games: Mockingjay — Part 1,” which in February brought in $36 million, and “The Hobbit: The Battle of the Five Armies,” which brought in $35.5 million. Each film has produced hundreds of millions of dollars in theater sales when both North American and overseas sales are included.

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The MPAA continues to fight privacy in China. One estimate is that 90% of the viewership of U.S. movies there is illegal. Just earlier this year, the MPAA targeted the Chinese problem:

The Motion Picture Association of America (MPAA) has filed civil actions against the popular Google-backed Chinese-language video and music file-sharing firm Xunlei, alleging multiple acts of copyright infringement.

The MPAA said in a statement it had filed the actions on Jan. 19 in the Nanshan District Court in the southern city of Shenzhen, seeking damages, claims for orders to stop the infringing activity, a public apology and requesting that the Chinese video and music sharing company bear the studios’ litigation costs, the MPAA said in a statement.

Xunlei is one of many sites that fuel the trouble, along with the sale of pirated DVDs.

While movie ticket sales in China may have passed those in the United States last month, China’s number would be much bigger if rampant piracy were not an issue. In fact, if the piracy went away, ticket sales in the People’s Republic would be many times those in the United States.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.