Fight against piracy makes some stridesKorea is a country where 64 percent of the inhabitants have high-speed Internet access and 72 percent carry mobile phones. It’s a high-tech place to be. But it is also a country where protection of intellectual property rights has been weak, and that combination worries the music and film industries.
A year ago, the U.S. Trade Representative’s Office placed Korea on its priority watch list for piracy of online music and U.S. motion pictures. At the time, the U.S. government said Korea had not taken proper measures to protect sound recordings and resolve film piracy issues.
The lack of adequate enforcement of intellectual property rights has led to what the U.S. government described as “the loss of millions of dollars of revenues” for U.S. and Korean copyright holders.
Yet, within the last year there have been signs of an improvement in the situation as the problem has gained greater acknowledgment, and some measures are being taken to protect copyrights.
A television advertisement starring BoA was aired for the first time in July by the Korea Broadcasting Advertising Corporation informing viewers of the damage to the local economy resulting from the failure to protect intellectual property in the cultural sector.
There also seems to be a rising awareness within the legal community about intellectual property laws.
Yesterday, a new anti-piracy law directed at the music industry took effect. And Representative Jeong Seong-ho of the Uri Party said he would introduce a bill in the National Assembly that would give the government the full right to punish individuals who have violated intellectual property laws without requiring victims to file lawsuits.
Experts explain that the root of the problem lies in the Korean government’s failure to create a “safety net” for the digital environment when it made strategic investments in the local information technology industry after the 1997-98 financial crisis. This failure to protect the infrastructure of cultural content could lead to a fast breakdown of the local industry, they contend.
“The question comes down to the rights of copyright holders and the convenience of Internet users,” says Ahn Seok-jun, a manager of the music section at the Korea Culture and Contents Agency.
“In Korea, the dilemma has gotten even deeper and much more intense because the government is equally responsible for protecting the copyrights of the producers and consumers’ right to share information,” he says. “In a country with a reputation for a strong digital infrastructure this is an issue to be treated with serious care.”
The music industry
In the music industry, the presence of online music sites has led to serious economic damage to domestic recording companies. According to the Korea Music Copyright Association, annual revenues for the local music industry have dropped from 380 billion won ($365 million) to 183 billion won within the past five years.
Last year, no Korean artist succeeded in selling more than 500,000 copies of an album. More than 8,000 cases were found in which karaoke bars had not paid copyright fees for the songs they use.
A recent JoongAng Ilbo article indicated that 92 percent of Internet users in Korea had downloaded a music file, but only 33 percent thought that doing so was illegal.
“I think it also has to do with the issue of musical depth. Audiences are too willing to compromise the quality of music nowadays,” Mr. Ahn says.
“Fans of classical music have known that they would sacrifice the quality of the music in moving from LPs to CDs, but they’ve done it anyway because of the convenience aspect. When it comes to pop music I think people simply don’t see that there is a value in paying a price for creativity,” he adds.
But, according to Mr. Ahn, more and more companies are starting to see music as a commercial asset, a product to be rewarded and protected ahead of users’ convenience.
Mobile phone service providers, including SK Telecom and KTF, have introduced new paid music portal sites where copyright fees are paid to producers. Others, like Bugs Music, an online streaming audio site, reached an agreement with the Korean Association of Phonograph Producers in August, under which the association provides music files and Bugs Music charges its users.
A new copyright law also is being put into effect. As of yesterday, every copyright holder, whether it’s a singer, an instrumentalist or a record producer, in Korea is given the full right of transmission. Individuals who have linked, downloaded or exchanged unsolicited sources of music files on Internet sites will be charged with a violation of copyright law, and be subject to a maximum five-year prison term or 50 million won fine.
The movie industry
The film industry is primarily affected by sales of pirated DVDs and online sites that illegally distribute movies.
The Korean Video Association estimates that the movie and video market, which amounts to 700 billion won, loses about 200 billion a year through piracy. Most industry insiders, such as Kim Jong-rae, the chief executive officer of Papa DVD, say the losses are much higher. Sporadic police raids do occur, but DVD piracy is not given a high priority.
Papa DVD is an Internet mall that sells Korean movies and music. About 20 percent of its sales are made abroad.
The Korean movie market now ranks in the top 10 worldwide, which is why actors and directors have begun to include Korea on their international promotional tours, Mr. Kim says.
The Korean DVD market ranks low, probably 60th. Sales of Korean DVDs outside of the country, such as “Winter Sonata” in Japan, exceed sales in Korea. But that could also be due to how easily accessible these shows are illegally, he says.
“Offline, illegal sales of DVDs are not a huge problem. Sales are limited because hawkers have to physically set up in an area. The problem is online,” Mr. Kim says. “I surveyed my employees and asked them, ‘Other than watching movies at a theater, how do you watch movies?’ Almost unanimously, they said they download films.
“In the U.S., there is talk of fining people who illegally view movies. But in Korea, there is no such regulation. Downloading movies online is not really considered illegal. You have to change people’s mindset. It’s stealing,” he adds.
A Ministry of Culture and Tourism official who declined to be named said, “Piracy of movies is a problem in Korea. In most countries, the DVD and video market is larger than the movie market. But in Korea, the movie market is much larger.”
As technology has changed, so have the security measures. About two years ago, with the Korean premiere of “Windtalkers,” 20th Century Fox hired K & I, a security firm, to guard against piracy. The company installed metal detectors and checked bags at theaters, and attendees were required to hand in camcorders, video cameras and digital cameras.
“We had complaints at first, but these measures are necessary to prevent people from illegally recording movies,” says Ham Hawk of K & I. He has caught people with hidden compartments in their bags with recording devices pointing out through a small hole, Mr. Ham says, and he even caught people recording “The Passion of the Christ” at a special screening at a church.
Now, attendees at screenings are required to turn in mobile phones, since the latest models in Korea can record up to three hours of film and will not necessarily be caught by a metal detector.
In order to handle such cases, K & I posts a guard wearing night vision goggles at the front of the screening room. “It’s virtually impossible to illegally record movies at a theater if these measures are in place,” Mr. Ham says. “And as technology changes, so will our approach.”
But those involved in the film industry believe the country can do much more to rectify the problem.
Mr. Ham notes that the U.S. Federal Bureau of Investigation and Central Intelligence Agency are involved not just in nabbing piracy criminals but they have also developed manuals that are circulated to movie theater chains to help them prevent illegal recording.
While K & I has protected up to 200 films, few of them have been Korean.
“The [companies that produce] international blockbuster movies often require security measures,” Mr. Ham says. Sometimes, they will release films with region-specific codes, so that when they catch criminals, they can tell what country the film originated from. However, these measures are often lacking for Korean films, he adds.
Movie companies like Warner Bros. Korea have hired outside firms to patrol Web sites for illegal distributions. “It’s hard to find these sites as Internet users are savvy,” says Nam Yunsook of Warner Bros. “They’ll upload movies under variations of the movie name.”
“The scale of the Korean movie industry may not be as large as America’s, but Korean movies also need to be protected,” Mr. Ham says. “People here are watching not just U.S. blockbusters, but Korean films from the comfort of their homes.”
As Korean movies become popular abroad, and as Korean film companies start to recognize the importance of their own work, Mr. Ham sees this situation changing.
But for now, it’s quite easy to obtain illegal DVDs here ― just check out the streets of the Yongsan Electronics Market, Apgujeong or Itaewon. While Ms. Nam points out that most of these DVDs originated from abroad, sales of these DVDs do detract from legal sales in Korea.
by Park Soo-mee, Joe Yong-hee
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