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updated 2/3/2004 6:24:33 PM ET 2004-02-03T23:24:33

The film industry on Tuesday warned of mounting losses to pirate digital versatile disc (DVD) and video factories in Asia, which last year produced illegal copies worth an estimated $718 million (€572 million, £390 million). 

The Motion Picture Association (MPA), representing the world's largest studios and TV production companies, believes Asia now accounts for almost a quarter of the near $3 billion lost to film piracy globally each year. 

New figures published by the trade group showed that Asian piracy rose 12 percent in 2003, exacerbated by the relative ease in mass-copying DVDs. 

The MPA, which has watched with dismay as the music industry has suffered serious losses to pirate CD factories, said more than 45 million illegally copied movies were seized last year in the Asia-Pacific region. 

Studios have identified China, Malaysia and Taiwan as leading centers for mass copying, where blockbuster movies such as Spiderman were available in pirate versions before their official release. 

Of the illegal copying equipment seized last year, more than half was confiscated in Malaysia. 

Last year, the MPA criticized Malaysia for "wholly inadequate criminal enforcement" against piracy. In its annual report on piracy in the region, the association said tougher measures had seen piracy in Malaysia fall by a third to 50 percent of the market. 

Nevertheless, the industry fears that illegal sales are still rising in the region as a whole. 

Mike Ellis, MPA's regional director for Asia-Pacific anti-piracy operations, said in a statement: "The dramatic increase in the production of [recordable DVDs] shows that pirates are moving toward a diversified manufacturing base." 

According to the association, China remained the largest market for pirated videos and DVDs with an estimated 95 per cent market share for illegally copied films. Losses in China were put at $178 million, followed by Japan at $147 million. 

As in the music industry, where illegal copying is estimated to cost record companies more than $4.6 billion a year, movie studios have been alarmed at the sophistication of small pirate factories in Asia. 

Mr. Ellis said the anti-piracy campaign was now focusing on small producers churning out thousands of discs for local sale, as well as the industrial-scale factories exporting DVDs around the region. 

Warning that only one in 10 films now recoups its production costs at the domestic box office, the industry fears that pirate copies and the penetration of internet file-sharing could threaten production plans for future releases.

© The Financial Times Ltd 2010. "FT" and "Financial Times" are trademarks of the Financial Times.

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