PRAGUE | Fri Feb 17, 2012 3:44pm EST

Reuters) - Vitezslav, a 31-year-old Czech, is one of many people in the European Union's emerging east whose opposition to a new anti-pirating pact culminated this month in huge protests across the bloc that may now torpedo the treaty.

But far from the clichéd image of an impoverished eastern European who just wants to rip movies and songs for free, the young commodities trader is a savvy, modern media consumer who actually wants to pay for what he watches.

It is all about choice - or rather a lack of it.

Because he is unable to tap the cheap, instant access to digital media available through services like Netflix in more developed states, he pays 250 Czech crowns ($13) a month to, a site that offers fast download rates of pirated material.

"People here got stuck on this site because there was no other provider where we could download movies. So we got used to it, and now we pay for higher download rates," said Vitezslav, who did not want to be identified by his last name.

"But if there was another legal service that would be as easy, I would do it. I pay for higher download rates, so why wouldn't I pay for something legal?"

Vitezslav's dilemma underscores a little-discussed aspect of the global anti-piracy debate.

While the United States and Hollywood are pushing to crack down on the illegal downloading that is rampant in developing countries like those in eastern Europe, they are not addressing a main reason behind the trend - that pirating is one of the only ways consumers can get at the products they want.

That issue has risen to the fore as the media industry's anti-pirating efforts have hit opposition in the form of public anger that may delay or even sink the newly signed Anti-Counterfeiting Trade Agreement (ACTA) designed to crack down on digital theft.


According to Joe Karaganis, director of Columbia University's Social Science Research Council (SSRC), film and music studios have marketed their products worldwide but have largely ignored consumers outside the richest countries.

That makes piracy largely a supply problem of pricing and access rather than a criminal conspiracy.

"There's an incredible divergence between this amazingly successful global marketing campaign for Hollywood goods and a real lack of interest in comparably expanding access to those goods," he said.

For many years in Prague, the only way to see films was to catch the few Hollywood blockbusters that trickled through theatres, buy DVDs for $30 or more months after their release overseas, or to rent from the video stores that piracy has now almost driven into extinction.

Last year, Apple finally expanded its iTunes store for music and films in the EU's 12 ex-communist states - eight years after its debut in America. But a limited selection is a turnoff for consumers used to instant access, and prices are higher despite incomes that are dwarfed by U.S. salaries.

Czech iTunes's, for example, offers the films "Fast Five" and "Bridesmaids" under their New Releases segment for 13.99 euros ($18.37). It has no option for rental.

Those films were available in the United States last summer, where they cost $14.99 to buy and $3.00 to rent. And American viewers can now see Oscar nominees "Moneyball" and "The Help," films available only in pirated versions in the Czech Republic.

In a study last year, the SSRC tried to discern the price of films adjusted for local incomes in developing countries.

It found that while a DVD of "The Dark Knight" cost $24 in the United States, that was the equivalent of $75 in Russia, and $641 in India when compared to local purchasing power.

The price of pirated DVDs in those countries were $25 and $54, still more expensive on a purchasing power basis than a legal copy in the United States.

"You have this amazing mix of slowly rising incomes, very high media prices, but a collapse in prices of technology," Karaganis said. "So you have this massive new infrastructure for digital media consumption with really no corresponding increase in legal access to affordable digital media goods."


But in a region where one leader, Romanian President Traian Basescu, once told Bill Gates that digital pirating helped his nation build a budding software industry, it is easy to see why companies are wary of wider distribution.

And although loss valuations are very hard to calculate - many times those who illegally download media would not buy it otherwise - industry groups estimate it amounts to tens of billions of dollars annually worldwide.

That is one of the main drivers behind ACTA, an accord whose authors say will strengthen the legal framework to crack down on copyright and trademark theft but whose opponents say will curb freedom on the Internet and encourage invasive surveillance.

Already signed by eight countries, the treaty needs all 27 EU states to ratify it by May 2013 and must clear European Parliament to come into force there. But that looks in doubt.

Governments have been given pause following demonstrations by tens of thousands of Europeans and attacks on government websites by "hacktivists" who oppose the pact.

The Germans, Czechs, Slovaks, Bulgarians, Lithuanians and others have postponed its ratification, and several officials have said it cannot be passed in its current form.

Slovenia's ambassador to Japan has apologized for signing it, while in Poland, deputies wore Vendetta protest masks in parliament in sympathy with treaty opponents and the prime minister said he could not rule out rejecting the pact.

Critics say the treaty was forged in secret, addresses only the concerns of copyright holders, has vague language that can lead to widespread censorship, and focuses only on enforcement.

Demonstrators fear it will transform illegal downloads from a civil offence to a crime punishable by jail time and will allow invasive surveillance that many compare to the tactics of former Communist regimes.

That strikes people like Ivan Bartos, chairman of the Czech Pirate Party that has been influential in anti-ACTA protests, as unfair, as it leaves media lovers with few options to join in the global digital media age.

"(Pirating) is caused by unavailability of the stuff and the bad market," he said. "A certain percentage of people will always download, but the rest is willing to buy if the material is available." ($1 = 18.9763 Czech crowns) ($1 = 0.7616 euros)

(Additional reporting by Robert Muller. Editing by Jeremy Gaunt.)

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A good example of how stupid Hollywood is...they could expand to these markets and there wouldn't be a piracy issue.


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