Monday, May 12, 2008

Re: "Quiapo's Illegal DVD Trade Is Dying"

Here's a reply on "Quiapo's Illegal DVD Trade Is Dying" posted at

Re: "Quiapo's Illegal DVD Trade Is Dying"

Post Reference:

Hi Guys,

I think it's more like the Quiapo DVD market is changing. The buyer profile is now more C and D whereas before you had B and even A market crowds.

What has changed? The main factor is internet downloads. PLDT and Globe reports a 60% increase in their broadband market in 2007 and this market is expected to grow at least 35% per annum up to 2010. People that used to buy a few pDVDs a week (the bulk of the AB market) are now downloading them instead of going to Quiapo or, say, Greenhills. Additionally, the availability of original DVDs at P150 to P199 also contributed to the decline of pDVD sales. Finally, there is a reactionary market effect wherein sellers are pushing more inferior pDVD stocks because the market demanding clear quality copies have diminished greatly.

In other words the opportunity cost of acquiring pDVDs have gone up since the marginal cost of substitutes have gone down.

Will the pDVD market die out? Not yet! The C & D markets are still around. Buying and watching pDVDs are still cheaper than going to the movies for them. However, since they have lower purchasing power, the market has effectively shrunk and the good old days are long gone for our friends from Marawi.

What can we expect? Market consolidation and perhaps natural monopolies arising from the retail side of the business. Additionally, pDVD quality will likely continue to deteriorate.

Yes, I am idle today.

Sunday, May 11, 2008

Quiapo's Illegal DVD Trade is Dying

Quiapo's Illegal DVD Trade is Dying

Angelo Gutierrez

Despite the brazen display of fake movies in Quiapo district, anti-piracy agencies of the government believe the illegal DVD trade in the notorious district of Manila is steadily declining.

“Ngayon pa lang we already know. We can see in the inventories that the amount of discs is getting fewer,” Eduardo Manzano, Optical Media Board (OMB) chairman, told

Last May 2, or a week after the United States Trade Representative (USTR) released its Special 301 Report, which specifically mentioned Quiapo's notoriety for selling counterfeit and pirated merchandize, visited this bustling area of Manila.

The intersection of inner streets of Bautista and Hidalgo, across from Quiapo Church, is where dozens of retail stores of pirated movies and music, in the form of DVD and VCD, are concentrated.

At least a dozen stalls are lined up on the streets, and hundreds more stalls are cramped in at least three two-story buildings on Bautista and Hidalgo streets.

At the end of Bautista street, or a few meters away from the fake DVD, VCD stores that are mostly selling pornographic movies, is a police community precinct.

Told of the scene in Quiapo, Manzano said the pirated DVDs being sold in Quiapo today are mostly old titles or have low audio and visual quality.

This, he said, is because of the government's success in blocking the resources of the illegal traders by conducting hundreds of raids in 2007.

Based on OMB records, a total of 2,526 operations in 2007 resulted in the confiscation of 4.8 million units of fake optical discs and the filing of 22 criminal complaints with the public prosecutor.

Manzano said that while fake optical discs is not the Philippine National Police's (PNP) responsibility, it can arrest fake DVD traders for selling pornographic materials.

The OMB chief cited corruption as one of the reasons for some erring policemen's inaction against pornographic materials in the country.

"There will always be corruption. With illegal money, there will always be corruption. So that's one of the problem," Manzano said.

Manzano, however, clarified that the PNP has been an active partner of the OMB, in fighting optical media piracy in the country. He said policemen usually tag along during OMB raids.

Aside from Quiapo, the USTR mentioned Greenhills in San Juan City; Metrowalk Mall in Mandaluyong City, Makati Cinema Square in Makati City, and Binondo district in Manila as the havens of counterfeit products.

Technology killing pirated CD business

The Philippines maintained its spot, along with 35 developed and developing countries, on the ordinary watchlist of the USTR.

The status quo standing is being treated by the Intellectual Property (IP) Philippines as "another benchmark" for the country's campaign against all forms of product piracy.

IPP is the lead coordinating agency of the National Committee on Intellectual Property Rights (NCIPR), where OMB and the PNP are members. It was created in 2005.

"Another benchmark to measure the progress of the Philippines' anti-piracy campaign is its status on the Special 301 Report. For three consecutive years now, the country has been on the ordinary watch list. The country was removed from the Priority Watch List in 2006," IPP Director General Adrian Cristobal Jr. said.

Cristobal agrees with Manzano that optical media piracy is nearing its end in the Philippines. Cristobal said a concerted effort of concerned agencies and the Filipino consumers "can really solve the piracy problem."

Manzano's opinion, however, was a little more creative.

"Eventually with the computer, there will be less need for physical products (DVD, VCD) on the streets because again, all you have to do is access the Internet," he said.

However, Manzano said the rapidly developing technology has also weakened the Optical Media Act of 2003, which he said needs to be amended to become "proactive" to be able to "run parallel with the technology development."

He said the OMB and the IPP are pushing for the amendments to the law to "plug holes that the syndicates are trying to create."

"We have a technical working group putting together amendments. We have asked the House and the Senate. When the optical media law was being created, we did not foresee how technology will develop. The law became obsolete with the technology development," Manzano said.

Internet downloading

Manzano said movie and music downloading through the Internet is the "new frontier" of piracy. He said with Internet downloading, "everybody has the capacity and the potential to become a pirate."

An Internet pirate only needs a computer, a fast broadband connection and a DVD burner. With the absence of a law, home-based Internet piracy is allowed "if you don't intend to gain from it financially by virtue of retail."

Manzano said Internet downloading can also phase out the trade of fake DVDs in the country. He said that based on the fora hosted by OMB, movie lovers prefer to download clearer copies from the Internet instead of going to the congested Quiapo district.

"In the future, that will be the National Telecommunication's problem," he said, explaining that a product of Internet downloading becomes the OMB's responsibility only after it is burned to a DVD.

In 2007, 1.2 billion movies were downloaded for free in the United States through the Internet, Manzano said. Internet users also download free games, e-books, and music, he added.

Cristobal said the Philippines doesn't have the capability or infrastructure to control piracy on the net, because of the absence of a law against Internet piracy.

He said the IPP is now pushing for the amendments of certain provisions of the Intellectual Property Code, "which would make our laws more responsive to the current needs of the Filipinos."

Among the bills, he said, is the Internet Treaties that was ratified by Senate in 2002.

"The important provisions of the Internet Treaties, particularly on digital rights management, are now in the process of being incorporated into the Copyright Law, which will result in the criminalization of copyright infringement on the Internet," he said.

Friday, May 2, 2008

USTR 2008 Special 301 Report

United States Trade Representative (USTR) cites Quiapo's notoriety for selling counterfeit and pirated merchandise in page 8 of its 2008 Special 301 Report. The report doesn't mention anything specific on illegal optical media trade in the Philippines in relation to the Quiapo DVD market.

Read the whole report here:

Page 7, Notorius Markets...

Notorious Markets

Global piracy and counterfeiting continue to thrive, due in part to large marketplaces that deal in infringing goods. This year’s Special 301 Report notes the following virtual and physical markets as examples of marketplaces that have been the subject of enforcement action, or may merit further investigation for possible IPR infringements, or both. The list represents a selective summary of information reviewed during the Special 301 process; it is not a finding of violations of law. The United States encourages the responsible authorities to step up efforts to combat piracy and counterfeiting in these and similar markets.

Virtual Markets

Allofmp3 (Russia). Industry reports that allofmp3 was formerly the world’s largest serverbased pirate music website. Although the site’s commercial operations appear to have been disabled in 2007 and a criminal prosecution is pending, other Russian-based websites are reportedly continuing operations with similar infringing content.

Baidu (China). Industry has identified Baidu as the largest China-based “MP3 search engine” offering deep links to copyright-protected music files for unauthorized downloads or streaming. Baidu is the target of ongoing infringement actions.

Business-to-business (B2B) and business-to-consumer (B2C) websites (China). A large number of these Chinese websites, such as Alibaba and Taobao, have been cited by industry as offering infringing products to consumers and businesses. The Internet traders who use these online markets to offer counterfeit goods are difficult to investigate, and contribute to the growth of global counterfeiting.

PirateBay (Sweden). Industry reports that PirateBay is one of the world’s largest BitTorrent tracker sites and a major global conduit for the unauthorized exchange of copyright-protected film and music files. PirateBay was raided by Swedish police in 2006, and the government initiated the prosecution of four Swedes associated with the site in January 2008, but the site has continued to operate, reportedly relying on servers located outside of Sweden.

Physical Markets

Silk Street Market (Beijing, China). Industry has cited Beijing’s Silk Street Market as “perhaps the single biggest symbol of China’s IP enforcement problems.” In 2005, authorities began to pressure the landlords of Silk Street Market and other major retail and wholesale markets in Beijing to improve compliance with IPR laws. In 2006, right holders prevailed in several court actions related to the market, and executed a Memorandum of Understanding with the landlords in June 2006. A January 2007 industry survey of the market reportedly showed that counterfeiting has worsened, with apparent violations in 65 percent of all outlets. More recent industry reports indicate that counterfeiting at Silk Street Market remains at critical levels.

China Small Commodities Market (Yiwu, China). The China Small Commodities Market in Yiwu reportedly sells approximately 410,000 different items, mostly small consumer goods. Industry has cited the market as a center for wholesaling of infringing goods. Officials in Yiwu have met repeatedly with U.S. Government officials and stressed their work to improve IPR enforcement. Industry confirms that enforcement in Yiwu has improved. Continued improvement is needed, particularly in the area of criminal enforcement.

Gorbushka, Rubin Trade Center, and Tsaritsino Markets (Moscow, Russia). Industry representatives report that piracy problems persist in these markets, though the situation has improved at the Gorbushka and Rubin Trade Center.

Tri-Border Region (Paraguay, Argentina, and Brazil). The Tri-Border Region of Paraguay, Argentina, and Brazil has a longstanding reputation as a hotbed of piracy and counterfeiting of many products. The U.S. Government is funding a training project through which U.S. Department of Justice and U.S. Department of Homeland Security officials will train prosecutors, police, and customs officials from the Tri-Border Region to combat intellectual property crime. Although Ciudad del Este remains the hub for pirate activities in Paraguay, industry reports that trade there has declined and that commercial concentrations are shifting to other cities. Through a revised Memorandum of Understanding between the United States and Paraguay on IPR enforcement, the United States will be encouraging Paraguay to increase enforcement action with respect to a number of specifically-identified markets in that country.

Tepito, Plaza Meave, Eje Central, Lomas Verdes, and Pericoapa Bazaar (Mexico City); Simitrio-La Cuchilla (Puebla, Mexico); San Juan de Dios (Guadalajara, Mexico); and Pulgas Mitras and La Ranita (Monterrey). An estimated 50,000 vendors sell IPR products in Mexico’s ubiquitous, unregulated street markets. Past police raids on such markets have sometimes been met with violent resistance, requiring large contingents of security personnel.

Czech Border Markets (Czech Republic). Hundreds of open air market stalls are notorious for selling pirated and counterfeit products near the Czech border, including at the notorious Asia Dragon Bazaar in Cheb City. Many of these markets are highly organized, and even advertise on the Internet.

La Salada (Buenos Aires, Argentina). This is the largest of more than 40 large, wellestablished markets in Buenos Aires that have been cited as being heavily involved in the sale of 9 counterfeit goods. An estimated 6,000 vendors sell to 20,000 customers daily. The market is reputed to be a haven for organized criminal gangs that operate from within it, resulting in little to no IPR enforcement.

Neighborhood of Quiapo (Manila, Philippines). Street stalls in this neighborhood are notorious for selling counterfeit and pirated merchandise. Other notorious markets in Manila include Binondo, Greenhills, Makati Cinema Square, and Metrowalk.

Harco Glodok (Jakarta, Indonesia). This is reported to be one of the largest markets for counterfeit and pirated goods in Indonesia, particularly well-known for pirated optical discs. Enforcement officials are reportedly reluctant to conduct regular enforcement actions because of the presence of organized criminal gangs.

Panthip Plaza, Mah Boon Krong (MBK) Center, Klong Thom, Patpong, and Sukhumvit Road (Bangkok, Thailand). These locations are notorious for openly selling pirated and counterfeit goods. They are all designated as “red zones” by Thai authorities, which indicates that they are places where infringing products are most readily available.

Page 43, Watch List 2008...


The Philippines will remain on the Watch List in 2008. The United States is concerned about U.S. industry reports of an apparent increase in piracy in the Philippines, particularly in the areas of book piracy, illegal downloads using mobile devices, piracy on the Internet, and the illegal camcording of films in theaters. The United States urges the Philippines to take steps to reverse these trends and strengthen its enforcement regime against piracy and counterfeiting. Specifically, the Philippines should pursue final determinations in outstanding IPR cases, including those related to cable piracy, with imposition and implementation of deterrent-level penalties. The Philippines also should strengthen the Optical Media Board and provide it with adequate resources to expand and improve the effectiveness of its activities; strengthen the Customs IP unit; ensure that its patent regime complies with the World Trade Organization Agreement on Trade-Related Aspects of Intellectual Property Rights; enforce copyright protection of printed material; and seek to obtain amendments to the Copyright Act to implement the WIPO Internet treaties. The United States will continue to work with the Philippine Government under the bilateral Trade and Investment Framework Agreement to strengthen the Philippines IPR regime.