Korean law firm Ilsong LawOffice and film portal site Cinetizen.com have announced an initiative to tackleillegal internet distribution which is estimated to cost the local film industry$300m a year.

Ilsong will carry outcopyright infringement suits on behalf of film importers and producers, actingon information provided by Cinetizen.com, starting February 1. The web portal haspromised to reward people who report illegal distribution activity with twofree film tickets or a $10 culture gift certificate.

In a 2005 study of theprevious year, the Korean Film Council (KOFIC) estimated the damage frominternet film piracy to amount to $281.6m, with theatrical exhibitor lossesamounting to $217.6m. The DVD market shrank from approximately $100m in 2004 to$80m in 2005, with an estimated $38.5m in losses from illegal downloads.

At the same time,distributors are complaining about so-called "internet releases", timed toworld premieres, making it harder to buy and release foreign films in Korea.

"These are not all justshoddy quality versions shot with a handheld in a theatre," says Chris H. Lee,acquisitions executive at top distributor Showbox. "Some of the US films' filesare made off the source in the lab before their world premieres. DVD-qualityversions, with Korean subtitles, on the internet."

With the Korean NationalAssembly's Culture and Tourism committee recently proposing two motions toamend copyright laws, 2006 is starting to look like the year for the filmindustry to follow the music industry in cracking down on internet piracy.

Suffering damage frominternet downloads of the Chinese version of The Promise before its Korean release, investor/distributorShoweast announced on Jan 15 that it is planning to launch a collaborativeeffort in March with major distributors and importers to regulate and prosecuteinternet pirates. Top distributors CJ Entertainment and Showbox are said to beinvolved.

According to the MotionPicture Association of America in a 2004 study, 98% of Koreans have access tohigh-speed internet, as opposed to 46% in the US, and 58% of internet users inKorea have downloaded films at one time or another.

KOFIC's 2005 study stated$65.6m was made on legal internet downloads, but over 50% of internet downloadusers got their films free, mostly through P2P servers. The average downloadcost 36 cents when including free downloads. Paid downloads cost an average of72 cents, about half the amount it costs to rent a video or DVD, bringing KOFICto the conclusion that internet downloading should be "acknowledged as a newlyemerged media and an aggressive market strategy should be created to addressit."