Mexican cartels take cut out of bootleg films

The Seattle Times
Monday, May 30, 2011
By William Booth
The Washington Post

When hundreds of Mexican police crashed through the doors into a warren of warehouses and humming laboratories, they uncovered one of the largest illegal manufacturing centers of pirated movies and music ever found in Latin America.

The predawn raids last month netted 12 tons of movie disks and more than 1,000 DVD burners, enough machinery to produce a staggering 500,000 counterfeit copies of “Kung Fu Panda 2″ a day, if the factories were running at capacity.

Defenders in the rough Mexico City barrio of Tepito, famous for its black-market bazaar, threw spikes into the street to blow the tires of police. No arrests were made, and authorities shrug that they do not know who ran the laboratories. But according to U.S. officials and American producers of the stolen films, music and software, Mexican drug cartels lurk in the shadows.

Led by the notorious La Familia and Los Zetas drug mafias, Mexican cartels now take a big cut of the hundreds of millions of dollars in bootleg disks sold in Mexico each year, according to U.S. officials and representatives of film studios and software manufacturers.

“This is no longer a victimless crime. There is blood on the product,” said Federico de la Garza, managing director of the Motion Picture Association in Mexico City, whose investigators work closely with the Mexican attorney general.

Disk piracy and U.S. copyright violations are a challenge around the world, but sales of Mexican bootleg copies of such items as “Toy Story 3″ and Microsoft Windows XP are funding the powerful mafias whose relentless violence has left more than 35,000 Mexicans dead in four years.

Mexico has become the pirate capital of Latin America, exporting so many bootleg movies to Central America, for example, that the major studios no longer bother to sell their products on the shelves there, according to industry watchdogs.

And in Cancún or Monterrey or Tijuana, when you buy a bootleg Disney movie for the kids, it is as likely as not to bare a stamp that shows it was distributed by Los Zetas (a stallion) or La Familia (a butterfly).

Video piracy is ubiquitous in Mexico, where more than nine of every 10 movie DVDs sold are counterfeits. Mexican authorities rarely seize products from street dealers or market stalls. U.S. officials in Mexico suspect many vendors give kickbacks to local authorities to allow them to operate.

The bootleg units sell for about $1, far less than the $12 charged for legal disks. While the sound and picture are sometimes inferior, the copies generally are decent. Box-office blockbusters are available on the street a couple of days after they open in U.S. theaters.

About 26 million legitimate DVDs are sold in Mexico each year; an additional 235 million are bootlegs, according to the motion-picture industry, which claims the bootlegs account for $300 million to $600 million in lost revenue.

Some critics suggest U.S. film studios are selling their product at a price point far above what the average Mexican is willing and able to pay and thus are stoking the piracy boom.

On Saturday, two days after “The Hangover Part II” premiered, counterfeit copies of the film already were on sale at Mexico City metro stops.

Asked if he thought it was a crime to buy a pirated DVD, college student Juan Figueroa answered, “nope.” He acknowledged it was wrong, but compared it to littering. Plus, Figueroa said, the price was right. He paid 10 pesos for the film, about 85 cents.

“The resources the cartels gain from these enterprises is considerable,” said Mexico’s deputy attorney general, Irving Barrios Mojica.

A bipartisan U.S. congressional caucus last week announced the creation of a “watch list” of countries where piracy has reached “alarming levels” and is controlled by organized crime. The caucus named Canada, China, Russia, Spain and Ukraine, and members said Mexico probably would be named soon — although they praised the country for passing legislation last year that makes piracy a crime and establishes protocols for enforcement.