Movie Pirates

That couple in the back row — they're making out big time, but not in the way you think

Brandy and Chris meet at the AMC Studio 30 movie theater at Dunvale and West­heimer in southwest Houston. The couple, whose names are not really Brandy and Chris, have been there several times before; they're comfortable there, and that's important for what they're planning to do. They purchase two matinee tickets to the 1:50 p.m. showing of monster flick Cloverfield. Just before two in the afternoon is an odd time to see a scary movie, and that's exactly why they've chosen it. Oh, and also because the matinee is cheaper. "Movies are expensive now. The early show is the only time I come," says Chris. An odd statement from a guy who is about to take something from the theater considerably more valuable than the four dollars he just saved.

The couple stops to order snacks before making their way to their seats. One large order of nachos, one large order of popcorn and one large Coke, "two straws" — they both laugh. Once in their seats, smack in the center of the empty top row, Chris replays their rehearsed plan again and again in his mind. Brandy is doing the same. They plan on bootlegging the one-day-old Cloverfield — making an illegally camcorded copy of the movie — and now it's time to begin. Start the clock.

Brandy opens her purse and removes a paper bag, a digital voice recorder, four plastic ties and a camcorder attached to the one-inch top piece of a camera ­tripod.

More than 81 million counterfeit DVDs...
Photos courtesy MPAA
More than 81 million counterfeit DVDs...
...have been confiscated since last year.
Photos courtesy MPAA
...have been confiscated since last year.
A camcorder, a digital voice recorder and a pile of blank DVDS are all it takes to go into business.
Shea Serrano
A camcorder, a digital voice recorder and a pile of blank DVDS are all it takes to go into business.
Electronic watermarks allow antipiracy agencies to trace counterfeit movies to their original pirated source.
Photo courtesy MPAA
Electronic watermarks allow antipiracy agencies to trace counterfeit movies to their original pirated source.
Open-air flea markets throughout Houston offer a wide range...
Photos by Shea Serrano
Open-air flea markets throughout Houston offer a wide range...
...of counterfeit DVDs.
Photos by Shea Serrano
...of counterfeit DVDs.

Ten seconds. Chris pours the popcorn into the paper bag handed to him by Brandy — "Why should I waste it? That shit ain't cheap" — and then cuts the bottom out of the popcorn tub.

Twenty seconds. While he does that, Brandy attaches the camcorder to the armrest in between them, steadying it with the dismantled tripod top, the four plastic ties and a napkin or two to get it leveled.

Thirty-five seconds. Chris cuts a hole in the side of the popcorn tub and places it over the fastened camcorder, the emptied and cut-up tub working as a sort of commonplace camouflage. (That way, should an usher happen to glance their way, he'll most likely see a happy couple enjoying the movie and the vague outline of some delicious, not-at-all-overpriced popcorn, instead of a pair of sly movie pirates concealing a JVC Digital Camcorder with 32X Optical Hyper Zoom.)

Forty seconds. Brandy takes the digital voice recorder and secures it to a pair of headphones that will be playing the movie audio, and, making sure not to cover the sensor on the top of the headphones that receives the sound, carefully situates the set-up in her oversized Gap purse.

Done. The entire process takes less than 45 seconds. Clearly, this is not the first time they have done this.

Two hours (and no interruptions) later, as the credits roll, Chris stands up to stretch as Brandy swiftly removes the camcorder and disassembles the headphone/voice recorder setup. The first step of a three-step bootlegging process has gone off without a hitch. Unfortunately for those trying to stop movie pirates, Step 2 will prove to be far easier.
_____________________

Pirating DVDs is big business nowadays and the motion picture industry, with the help of federal and local law-enforcement agencies, is waging a multibillion-dollar game of hide-and-seek with movie bootleggers across the globe.

More than 81 million counterfeit DVDs have been confiscated since last year, yet the latest research shows that piracy still costs the worldwide motion picture industry, which includes foreign and domestic producers, distributors, theaters, video stores and pay-per-view operators, $18.2 billion dollars globally. That's "billion" with a "b." BIG business.

The Motion Picture Association of America's six major member companies — Disney, Fox, Paramount, NBC-­Universal, Warner Bros. and Sony — lost $6.1 billion alone to piracy, $3.8 billion of which was traced to illegal camcording and hard-goods piracy. Camcording is responsible for supplying 90 percent of newly released content to bootleggers. These are numbers that do not sit well with MPAA Vice President and Director of U.S. Anti-Piracy Operations Mike Robinson. "Anyone who owes their living even remotely to the motion picture industry is affected by [piracy]. It has an extremely detrimental effect on the economy, and we cannot stress that enough."

Chris, the antagonist/protagonist of our story (depending on which side of the piracy debate you reside), is one of a growing population of movie pirates in Houston, taking full advantage of the MPAA's concerted efforts to stop bootlegging in other parts of the world, vying for his piece of the multibillion-dollar pie. He has a slightly different, yet equally passionate, take on the effects of piracy on the motion picture industry, invoking an antiestablishment defense.

"What do I think about it? I don't give a shit. We're a product of what we come from. You tell [somebody] they can't have shit for long enough, it's gonna end up to where we don't care how we get it; we just wanna get it. I think, I think bootleggin' is cool. I hate to say it, but it's true. Money gets to trickle down to people who really need it instead of the rich keep getting richer."

The MPAA works fervently, on a major and a minor scale, to curtail what appears to be the exponential growth of piracy. Movies are being produced with electronic watermarks, tiny dots specifically arranged in the frame of a movie that essentially act as fingerprints for movie theaters, allowing antipiracy agencies to trace confiscated counterfeit DVDs to their original pirated source locations. Many theaters have even incorporated an in-house bootlegger bounty, offering a reward of up to $500 to any employee for the identification of people recording movies while in a theater. Sneak preview screenings, especially, like the one recently shown for Lionsgate's new action heist The Bank Job, have thoroughly increased piracy stopgaps — cell phones were not allowed in, bags were checked, antipiracy statements were read prior to the screening and security guards were present throughout the entire showing. In a follow-up call, though, Lionsgate refused to comment on its security ­measures.

Movie pirates, though, like any good villain, have evolved to stay just out of the reach of the motion picture industry; their techniques are becoming more sophisticated. Rudimentary copies of footage shot with shoddy equipment are no longer the norm. Children are used to smuggle pirating equipment into theaters. Spyware pinhole cameras are employed, while harnesses are strapped to bodies to steady video shots. Theater employees are bribed to allow access to projection booths. Pirates are using cameras that can wirelessly beam content to hard drives in other locations. All the while, the motion picture industry fights to stay within striking distance of the pirates, working with local and federal law-enforcement ­agencies.

"Occasionally we will work with the FBI when a piracy group has struck a number of times," says Patrick Corcoran, director of media operations for the National Association of Theatre Owners. "Sometimes we'll set up stings and be there just waiting for them. We may use night-vision goggles, watching from the projection booth ourselves or from behind the screen to see camcorders, but I don't want to give too much of what we do away."

Piracy's effects stretch far beyond the Spielbergs and Clooneys; the industry's financial losses translate into lost jobs at the lowest levels of the multibillion-dollar moviemaking business, the MPAA's Robinson says. But the thought of those lost wages and jobs apparently can't compete with a three-for-$10 deal on films still in the theaters.

"I buy those movies because they're cheaper and quicker," says one stay-at-home mom of three kids. "I can get three movies for $10 from the guy at the washateria, or I can spend $70 and my whole afternoon at the movies."

A popular argument indeed. But what of the losses suffered by the motion picture industry?

"I don't really think about it, I guess." she says. "I'm just happy my kids get to see the movies they like. They wouldn't get to see them if I didn't buy them from him." Her kids were most recently fortunate enough to see Aliens vs. Predator: Requiem, Wrong Turn 2 and The ­Orphanage.

The motion picture industry isn't accepting pricing qualms as an excuse, and neither is NATO's Corcoran. As of 2007, an average movie ticket cost $6.82. Adjusted for inflation, an average movie ticket in 1977 cost $7.57 (1977 price without inflation: $2.23). The motion picture industry feels impatience and unawareness are at the root of the public's apathy towards piracy.

"If people are concerned with the ticket prices being too high, all they have to do is wait a little bit," says Corcoran. "It'd be great to get people into the theaters as much as possible, but like anything else, people have to make choices. Buying illegal goods is not a valid choice."
_____________________

Step 2 of the movie bootlegging process smells an awful lot like marijuana. Rather, the one-bedroom apartment where Step 2 takes place smells an awful lot like ­marijuana.

Inside, the apartment looks like any other guy's place — the walls are nearly bare save for a couple of old promotional party flyers tacked up and a ­plastic-framed Above The Rim movie poster hanging in the living room; several magazines containing women in compromising positions are scattered on the floor of the restroom. Nowhere inside is it particularly messy, but, like most apartments, the entire place feels dirty; and, oh yeah, there's about $3,500 worth of CD/DVD-burning electronic equipment in the bedroom.

That doesn't include the near $40-$50 in nickels and pennies on the bedroom floor. What's with all the change on the floor? "Scrooge McDuck," Chris says. What? "You ever seen that cartoon DuckTales?" Uh, yeah. "Scrooge McDuck" he says again, eyebrows raised this time, head nodding slowly, condescending gaze on his face. Oh, yes, of course, Scrooge McDuck.

The whole reproduction process is quite simple, really. "It's like this," Chris begins. "See, we just hook [the camcorder] up to the computer and [input the] video we took." The sound of whizzing bullets and police sirens is noticeably absent from the equation. "Then we run the audio from [the digital voice recorder] through [a converter] and into the computer so we can lay it over the video. After we finish that, we check it and then we burn it to a DVD." Still no FBI agents kicking in the front door or antipiracy officers rappelling down from the roof and crashing in through the windows. "That's what's up," he says.

He removes the original burned DVD from the computer and inserts it into a DVD burner tower. A burner tower is basically a DVD burner like that found on any home computer, except it normally operates as a separate, freestanding unit and is capable of producing many more copies per burning. For example, this particular burner tower is a 1 to 7, meaning it will produce seven copies of an original disk at a time, instead of just one. More expensive burner towers can be purchased operating at a rate of 1 to 20, easily producing 300-plus copies in six to eight minutes, and will typically come with free printers and DVD media — sort of a bootlegging starter kit, if you will. "You can get these [burners] anywhere, but sometimes the places that make the copies of CDs (like Church Audio/Video Supply) will sell old ones for cheap," says Chris. ("Cheap" is a relative term; the two models he owns — which, as Chris points out several times, are not illegal to own — totaled somewhere in the neighborhood of $2,500.) The tower's hum is barely audible as it writes the DVDs, making it easy to forget this is a crime.

Five minutes later he has seven copies of Cloverfield. He empties the tower, scribbling the title of the movie on each and sliding them into their own white paper sleeves, leaving only the original disk in the first tower, and placing a freshly burned DVD into the second burner tower. "A lot of times," he says, as he loads the second tower with blank DVDs, "I just pick up a copy of whatever [movies] I need to copy from somewhere else and then burn my own copies. Then I ain't gotta sit in the movie theater." Burn, remove, package, repeat. Burn, remove, package, repeat.

Asked if he knows other bootleggers, Chris keeps working. "Nah, I don't know them guys. I just stop by the beauty shop down the street, or sometimes they be coming in the barbershop. Them mutha­fuckas are everywhere." Burn, remove, package, repeat. Burn, remove, package, repeat. Thirty minutes later he has, among others, more than 50 hard copies of a movie that opened yesterday. On to Step 3 of the bootlegging process, which might also be titled "This Ain't No Job For Punks."

Sitting in the parking lot of a beauty supply shop on the northside of town with a trunk full of illegally burned DVDs and CDs is not for the faint of heart. Fundamentally, it's the same as sitting in the parking lot of a beauty shop on the northside of town without a trunk full of DVDs and CDs, but that one "tiny" difference is proving to be, well, uncomfortable.

"Relax." Chris says, the trunk full of contraband occupying about as much of his attention as the rising national deficit or Britney Spears's sudden British accent — which is to say, not very much.

The contraband in question is somewhere in the neighborhood of 300-400 illegally copied DVDs, most of which are movies still found in theaters — The Bucket List, First Sunday, Cloverfield, How She Move and I Am Legend, to name just a few. Current prices for the pirated DVDs are set at the street standard, $5 each, three for $10 or six for $20. (CDs are $3 each, four for $10 or eight for $20.) Chris is waiting for customers.

A stranger approaches Chris's burgundy sedan.

"What's up, cat? Whaddya need?" asks Chris.

"You got that Great Debaters or One Missed Call? And National Treasure 2?" asks the stranger.

"Yeah, you want all three?"

"Yeah."

Chris fingers through two of the three shoe boxes filled with DVDs, alphabetically organized, in the trunk of his car and digs out the three movies.

"Why don't you go on and get three more, square it a $20. I got that new ­Cloverfield," bargains Chris.

"Nah, that's good."

Money and movies change hands. Right there. In the parking lot. In the open. In the dying sunlight. For the world to see and that's that. So goes the next hour and a half of that Tuesday night. Some people, several of whom are weekly regulars, pull up right next to Chris's car and ask for specific movies or CDs. Others ask what he's got, and, depending on what's requested, he hands them a handwritten list of either movies or CDs. None of the patrons, according to Chris's finely tuned undercover cop detector, are police.

The trick for the pirates is for people to know where to find them without people knowing where to find them. "When people begin to notice a pattern of someone selling movies out of the trunk of their car, at a bowling alley or parking lot, for instance," says Lieutenant Michael Otero of the HPD Major Offenders Division, "that's when an anonymous tip is most likely to come in and we can act."

Given the esoteric nature of piracy, anonymous tips are hardly an everyday occurrence. Chris, like many other pirates, has taken advantage of society's fleeting conscience, and has been stationed outside of one specific establishment long enough to become a pseudoemployee of it. At one point in the evening, an actual employee pokes her head out of the store's entrance, cordless phone up to her ear, gives a What's up? nod of the head to Chris, then responds into the phone, "Uh-huh, he here."

"[People] will call to check if I'm out." says Chris. Yeah, he's been here awhile.

On average, a movie pirate selling illicit movie goods out of the trunk of his car can make upwards of $700 a day, easily, according to the MPAA's Mike Robinson, a stat confirmed by Chris. "Usually Mondays through Wednesday gonna be slow boogie. You could make anywhere from $10 to $1,000 depending on who you are and how you get yours." In between customers, he gives a crash course in Pirate Economics, explaining how, as with any other business, there are always mitigating factors that must be taken into account for one to be successful.

"People get paid on Fridays, people get paid every other week, people get paid on the first and the fifteenth. So, you put that together and that lets you know how the market be. That's why the beginning of the week is slower. But let's just say Thursday through Saturday, Sunday even, you ain't gonna really make nothing less than a 500 spot if you just sitting around at the right place, and sky's the limit depending on how much product you can get. That's the reason I like it. If you a real hustler, you can get out here and make real money."

All in all, 52 movies were sold in the hour and a half spent in the parking lot, for a total of $230. A slow night, to be sure, but at a rate of $153 an hour, it's not bad for a Tuesday.

Strip center parking lots, like those of beauty supply shops, video rental stores and grocers, are hotbeds for movie pirates because, according to Chris, "fast money finds fast money." Those types of places generate a lot of traffic, and the traffic that they do generate is already anticipating spending money. Remember: Somebody else's customer is your customer if you can reach them first.

Larger bootlegging operations, like the ones found in New York, California and, more pressingly, Asia, operate in rings to produce massive quantities of product. Several people will be responsible for securing the content, several others will be responsible for replicating the DVDs, several others will be responsible for packaging (which, with the help of professional printers, looks exactly like a store-bought DVD would) and the finished product will be sold to individual dealers.

In Texas — Houston, specifically — we're a little more laid-back with our piracy.

"Large-scale operations are not the kinds of things we are dealing with in Houston." says Lieutenant Otero of HPD. "One- or two-man operations are what we typically see here."

Even one- or two-man operations, however, can sell a significant number of pirated DVDs, and one place you're almost guaranteed to find these operations moving large quantities of illegal DVDs in Houston is flea markets.

Open-air flea markets, like Sunny Flea Market in north Houston, which routinely draws upwards of 30,000 people on a given weekend, are havens for movie pirates.

It's standard high-return Pirate ­Economics:

A ten-by-ten booth complete with one four-by-eight table rents for an average of $14 on Saturdays and $28 on Sundays. Add $3 to receive an electrical charge for the weekend (so you can power your TVs to play your pirated movies) and, if you're feeling really wild, add another $18 to secure a second table, and you're at a grand total of $63. Considering it costs 44 to 55 cents to produce a pirated DVD that will be sold for $5, Houston flea-­market pirates can easily average $2,500 in sales per day. It should take all of about eight minutes to recoup expenditures.

Assuming a flea-market pirate only operates two days a week, a conservative estimate of $2,500 a day would equal $260,000 a year. (Kevin Casey, MPAA's regional director of antipiracy, who is stationed in Dallas and oversees ­Houston-area piracy, believes the annual total may be somewhere closer to double that amount.) That's for one small-scale piracy operation. Sunny Flea Market alone turned up no fewer than two movie pirates, and there are more than 20 registered flea markets in Houston. In light of those statistics, Houston is still a relative blip on the piracy radar, currently drawing a less than aggressive antipiracy effort than those found in other places, although we are officially on the radar.

"You have to be able to make a distinction between the operations that are going on in China, where they are distributing millions of pirated DVDs, as opposed to the local flea-market issue." says Lieutenant Otero. "They are much more concerned with passing legislation and trade embargos on the national scale, but [the MPAA is] now starting to focus on cities in the U.S. like Houston or Chicago or New York."

The MPAA, which is saddled with the tedious responsibility of deciding whether or not to prosecute individual movie pirates, is more concerned with destroying confiscated DVDs when dealing with lower-level piracy. The likelihood that a typical Houston bootlegger will serve jail time is slim, and prison time even ­slimmer.

Ideally, the MPAA, NATO and other motion-picture establishments would like to eliminate piracy and its components altogether. They understand, though, that at the heart of it, bootleggers are playing with house money, risking very little downside to pursue a potentially massive upside. This harsh reality fosters the only sincere belief that movie pirates and those attempting to stop them share: An end to piracy is not likely to happen.

Or as Chris puts it:

"Bootlegging has been around since day one. Let's think about, Al Capone and them was bootleggin' liquor, you understand me. The shit ain't gonna ever stop. Especially since it's 2008, they call it the Internet generation. Nah, it ain't gonna stop. It's just gonna get worse and worse."

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