Uzbekistan, Bangladesh, Belarus ... and Spain. Spain' How does a western European country with such a long-established tradition of cinema-going and a rich history of film-making find itself on a watch list of the worst offenders for intellectual property theft, alongside states with virtually no film industries of their own and precious few cinemas'
According to Jose Manuel Tourne, director general of the Spanish anti-piracy association FAP, the blame lies with 'improper legislation, a lack of enforcement and not enough awareness of the severity of the crime among internet users'.
Others point the finger directly at Spanish government policies. One concern, highlighted by the International Intellectual Property Alliance (Iipa), was its decision to decriminalise P2P file sharing. Some internet film sites now boast of their file-sharing services, by which digital content is shared between users, often illegally.
'This has created a legal and a public view that copyright is free, download is free and there are no consequences,' says Maria Strong, Iipa vice-president and general counsel.
The country was recently labelled the biggest culprit in Europe for illegal film downloads, with 52% of Spain's internet users (totalling some 22.8 million) downloading counterfeit titles, compared with a European average of 20%, according to a report by the European Interactive Advertising Association.
'Internet piracy has reached an epidemic level in Spain and is wreaking havoc on the legitimate markets,' says the Iipa's Special 301 Report released in February, which placed Spain on its watch list of offenders.
'It is no longer the hard goods that are the issue, it is the downloading,' says Andrew Cripps, president of Paramount Pictures International. 'Our manager in Spain told us that there were 30 million legal DVDs sold last year, and over 200 million illegal downloads, which gives you a sense of the scale of the problem.'
It is difficult to put an exact figure on the Spanish film industry's losses due to piracy - FAP estimated it to be around $1.2bn (EUR800m) in 2007, but all figures are based on the assumption that every person who watched a counterfeit copy would otherwise have paid full price for a download, cinema ticket or legal DVD. However, producers, distributors and exhibitors agree that piracy is having a detrimental effect on the theatrical box office and on DVD sales (both of which are at an all-time low). And with new downloading sites appearing at a rapid rate, it seems little is being done to tackle the problem.
'If something dramatic is not done soon, the industry will implode,' says a local distributor.
Not surprisingly, the titles hit hardest by piracy in Spain are the US studio films. But it is not just studio products that are being pirated. 'Several local indie films are available to download, both legally and illegally,' says Enrique Costa, head of acquisitions at Avalon Productions. 'But the chances of distributors making money are seriously held back by piracy.'
Those fears are not unanimous. Some smaller arthouse producers and distributors see illegal file-sharing as free marketing for their films. 'We are slowly building recognition of our films thanks to users passing them on to their friends and discussing them in online forums,' says one local producer.
But for most copyright holders there is an ongoing battle with Spain's internet service providers (ISPs) to protect the distribution of their films. In November 2005, Promusicae, a Spanish non-profit-making organisation of film producers and music publishers, brought civil proceedings against Spanish telecoms giant Telefonica.
It wanted Telefonica to disclose the identities and physical addresses of people believed to be habitually sharing or uploading large files through Telefonica's Kazaa file-exchange programme.
The Spanish court passed the case to the European Court of Justice (ECJ) to clarify the position. In January this year the ECJ ruled in favour of Telefonica, insisting ISPs cannot be obliged to release customers' personal data 'in order to ensure effective protection of copyright in the context of civil proceedings'.
But in an interesting caveat, the ECJ also acknowledged copyright holders have the right to fight for the protection of their material. Quite how they can do this is another matter.
Getting the ISPs on side
The legal ISPs acknowledge piracy is a problem that needs tackling but at the same time they have to protect the rights of their customers. To take the drastic measure of suspending services would come at a huge cost.
This delicate balance of power between the two parties is, of course, not just limited to Spain. With major deals being struck on a regular basis with ISPs by US studios and independent film companies to distribute content online in several different countries, the issue is borderless. But while France and the UK, for example, are both making concerted efforts to persuade ISPs and copyright holders to work together, with their governments acting as intermediaries, Spain, it appears, is failing to do so.
'The Spanish minister of culture set up a working group to try and get an agreement between the two parties, but nothing came of it,' says FAP's Tourne.
One solution put forward in the European Parliament's IP (Intellectual Property) Enforcement Directive was for a private copy levy to be paid by users when downloading films. 'But a major debate still rages as to who should pay that levy and what constitutes private copy,' says Tourne. 'Some users say, 'Once I've paid the levy I should be able to copy what I like,' while others think they shouldn't have to pay at all for copying material. All the while, the ISPs say they will only take action on the matter if forced to by judges.'
This brings to the foreground the discrepancy between civil and criminal proceedings. In criminal cases in Spain where an individual is believed to have made commercial profit from sharing copyrighted films with others, ISPs could be forced to reveal the data of that client by the Spanish government or a law enforcement agency. But again the ISP could appeal the decision and take the case to the ECJ where the ruling could easily be overturned.
Sometimes it does not even need European court intervention. One recent criminal case against the operators of a major link site/forum, which had been the target of a Spanish police investigation, was provisionally dismissed. The judge agreed that if uploading and downloading were not criminally prosecuted, then facilitating them should not be prosecuted either, despite the fact that the facilitation is commercially driven.
After that decision, the Copyleft Foundation, set up to give end users greater access to licensed material, took the unprecedented step of publicly stating it would file criminal complaints against any police officer who continued to investigate P2P sites.
Ironically, the Spanish penal code is one of the most severe in Europe on copyright. Anybody caught infringing copyright laws can be sentenced to between six months and a year in jail, and fined heavily. This can be for simply downloading a song illegally or making a small commercial profit from selling a shared film file. But few arrests are made and the police actions that do take place are mostly dropped as a consequence of the requirement to establish commercial intent.
Success against street piracy
One positive note is that police efforts against organised street piracy have been relatively successful in Spain.
'There were about 50 arrests last year and local police have helped push street vendors selling illegal DVDs off the streets,' says Tourne.
Earlier this month, police managed to arrest six Chinese nationals, alleged members of a crime organisation whose Madrid operations were reportedly capable of producing 80,000 pirated DVDs and CDs daily. 'But, unfortunately a lot of pirates are now going underground into the subways. We are currently holding talks with Metro officials to clamp down on offenders.'
A further positive sign is the Spanish legislature's decision to get to the source of the problem by approving in the new film law passed in December specific legislation prohibiting camcording movies in cinemas.
But enforcement is proving difficult with only four police officers tasked with tackling piracy. Some Spanish producers and distributors have taken matters into their own hands by forming a coalition against piracy.
Those involved include the film producers associations Egeda and Fapae, the music producers association Promusicae, the Federation of Spanish Distributors, and the anti-piracy organisation FAP, with support from the Motion Picture Association (MPA). High on their agenda is building bridges with the ISPs by working with the Association of Telecommunications Operators (Redtel), which includes Telefonica, Vodafone, Orange and ONO.
'The coalition is taking shape at the moment and will be a legal entity very soon,' says Chris Marcich, senior vice-president of the MPA's European office. 'We want to bring the parties to the table and help find a solution to the problem either by pushing for new legislation or working within the current legislative framework.
One way of doing that could be to work with the privacy authorities and define a regime in which you can find that balance that the court of justice was talking about - by having the ISPs or a legal body send messages to users who are misbehaving, alerting them to the fact they are doing something wrong, without the rights holder knowing who the culprits are.'
Film producers association Egeda has also set up its own film downloading site (filmotech.com) to distribute its content directly to the consumer. But so far take-up has been slow. 'The difficulty is trying to change Spanish audiences' viewing habits, as well as tackle the major problem of film piracy. We want to change the illegal market into a legal market,' says Rafael Sanchez, managing director of business operations at Filmotech.
Another solution is for the amount of online legal content to be increased. 'The catalogues are very small at the moment,' says Dan Cryer, a media analyst at Screen Digest. 'The odds are that you will not be able to get what you want, and the deal terms are not great when you can find it. So launching some services with deep catalogues at a reasonable price would be a good start.
'Those services should be device based, not just locked to the PC. So that means getting a deal with Apple, and extending the deals that are in place at X-box. One of the things that has become abundantly clear is that people don't pay for content on their PC, but they will pay for content for devices, such as iPods and X-boxes.'
But as for wiping out piracy altogether, Cryer is less convinced. 'In an internet age, we will always see people illegally copying films. The cat is out of the bag.'