Identifier
Created
Classification
Origin
07BELGRADE885
2007-06-21 12:34:00
UNCLASSIFIED
Embassy Belgrade
Cable title:  

MPA WITHDRAWS FUNDING FOR ANTI-PIRACY ASSOCIATION IN

Tags:  ECON ETRD PREL SR KIPR 
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E.O. 12958: N/A
TAGS: ECON ETRD PREL SR KIPR
SUBJECT: MPA WITHDRAWS FUNDING FOR ANTI-PIRACY ASSOCIATION IN
SERBIA

SUMMARY
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UNCLAS BELGRADE 000885

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DEPT FOR EB/IPE-JBOGER
DEPT PLS PASS TO USTR JCHOE-GROVES, DOC-CPETERS, USPTO-JURBAN
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E.O. 12958: N/A
TAGS: ECON ETRD PREL SR KIPR
SUBJECT: MPA WITHDRAWS FUNDING FOR ANTI-PIRACY ASSOCIATION IN
SERBIA

SUMMARY
--------------

1. The Anti-Piracy Association of Serbia and Montenegro
ceased to exist in Serbia on March 15, 2007, after a November
2006 decision of the Motion Picture Association (MPA) to
withdraw its annual funding to the local association as of
January. The MPA cited re-focusing resources on a smaller
number of countries with larger markets as the reason for its
decision. Local film distributors say they are unable to
financially support the continuation of the APA due to
revenue losses from pirated films, and they are struggling to
reorganize in the aftermath of MPA's decision. END SUMMARY.


2. The Anti-Piracy Association of Serbia and Montenegro
(APASCG) was formed in 2003 with some USD 40,000 in annual
funding from the MPA. The APASCG was staffed with one full-
time attorney and two office assistants. It had 14 members
in the film distribution industry and has focused its efforts
on protecting audio-visual products and services of all kinds
from unauthorized use. The association has been very active
in the American Chamber of Commerce's Intellectual Property
Rights (IPR) Committee along with other associations like
International Federation of the Phonographic Industry (IFPI)
and the Business Software Alliance (BSA).


3. In December 2006, the APASCG received a letter from Chris
Marcich, Senior Vice President and Managing Director of MPA
Europe, Middle East and Asia, stating that the USD 50,000
annual funding would no longer be available for the
association in 2007. Marcich stated that it was a policy
decision to re-focus resources on a smaller number of
countries. Factors such as market size, effectiveness of
anti-piracy activities, estimated losses, and near-term
commercial prospects were used in selecting countries for
further funding. Marcich said funding for eight countries
would be discontinued in 2007 while another six programs
would experience significant cuts in MPA contributions. He
told econoff that many of these cancelled programs have
become locally funded, and he believes that this promotes

greater ownership of the anti-piracy activities. Econoff
asked Marcich for MPA to reconsider its decision for Serbia.


4. Zoran Savic, Director of Millennium Film and Chairman of
the APASCG, unsuccessfully appealed to the MPA in a January
22, 2007 letter on behalf of the association. He cited
several successes of the APASCG over the past three years.
Three years ago, judges in Serbia were reluctant to
adjudicate IPR cases. Now there are over 450 pending
criminal cases with 53 favorable sentences rendered in 2006.
Savic also noted the significant public relations activities
and extensive work with all relevant enforcement bodies. He
highlighted the association's achievement of developing a
procedure to force internet providers to remove piracy sites
from the internet, in which www.boamorte.worldbreak.com was
successfully removed in two days.


5. In addition to public relations activities, the APASCG
monitored markets, notified enforcement officials of known
piracy problems and requested investigations. It also
provided training to these enforcement bodies on how to
recognize counterfeit goods. The association was very active
in the courts as well, representing rights holders and
verifying legitimacy of movie titles in question.


6. Savic told econoff that the four main local film
distributors are having difficulty funding legal assistance
in APASCG's absence. The largest law firm in Serbia, which
has extensive experience in IPR protection, has offered its
services for EUR 2,000/month. Savic said that two of the
distributors can pay the EUR 500/month, but he is having
trouble convincing the other two, which cite financial
difficulties.


7. Film and music piracy continues to be a problem. The
International Intellectual Property Association (IIPA) places
the level of pirated music in Serbia at 90 percent. Members
of the APASCG told econoff that there they have experienced a
50 percent drop in revenues from sales to video clubs
compared to the same four-month period last year and a 250
percent drop in sales to kiosks. These film distributors

contend that of 450 active video clubs in Serbia, only five
purchase their entire inventory legitimately. Some 70
purchase some inventory from legitimate distributors, while
the rest offer completely pirated titles.

COMMENT
--------------

8. MPA's decision to cut funds significantly hamstrings
anti-piracy efforts in the film industry in Serbia. Revenue
losses from piracy have made distributors reluctant to fund
the APASCG and realize what Marcich describes as "greater
ownership." The opposite result is likely to occur where the
activities of the group are less coordinated and more on an
ad hoc basis. We hope that MPA reconsiders its decision.
Given advances in building an enforcement infrastructure, the
stage has been set for more success in driving pirated audio-
visual goods from the Serbian market. But MPA withdrawal,
coupled with the weakness of the local distributors, could
undercut prospects for progress. END COMMENT.

POLT