SOURCE: DigitalMediaStocks.com; USA Video Interactive Corp.

October 04, 2007 09:00 ET

India and China's Piracy Problems Plague Film Industry Creating Need for Improved Awareness, Stronger Policies and Effective Technology

Piracy Rate in China Estimated at Over 90% Due to Lack of Open Market Access to Foreign Films

POINT ROBERTS, WA and DELTA, BC--(Marketwire - October 4, 2007) - www.DigitalMediaStocks.com, an investor and industry portal for the digital media sector, reports on the rampant problem of piracy in India and China and the impact this problem continues to have on local and foreign film industries. Issues surrounding enforcement and awareness, restrictions on foreign films and a need for more effective technology, remain contributing factors to the growing piracy rates.

Movie piracy continues to be the thorn in the side of the Indian, Chinese and U.S. film industries. According to the Motion Picture Association of America, Inc. (MPAA), India suffered industry losses of $180 million (US) in 2005, the vast majority of which were to the local film industry. In China where the piracy rate is estimated at 93%, meaning that there is virtually no legitimate market for filmed content, the losses from movie piracy are estimated at $2.7 (US) billion.

Despite the negative impact of piracy on India and China's film industry, the problems continue to be fueled by challenged regulatory systems. Elizabeth Kaltman, MPAA's Communications Director explains, "Lack of enforcement resources and attention are key to the piracy problem in India, as is the lack of any real deterrent sentencing from the judiciary. Unquestionably one of the foundations of China's piracy problems is the lack of market access accorded to foreign films (non-Chinese films). China's theatrical exhibition quota, frequent imposition of 'blackouts' on the theatrical release of foreign films, and restrictions placed on home video distributors, give movie pirates a tremendous market advantage."

According to industry sources, India while it has had significant problems in the past has started to organize its marketplace, in large part because Entertainment, a sector recently given industry status by the government, is considered to be the second fastest growing industry next to Infrastructure in India. As a result, the government and industry have become quite cognizant and both law enforcement and judiciary are being actively used and involved in scuttling piracy. In India there is a growing emphasis on the need to create awareness and to educate the industry on the means and methodology of deterrence to further reduce piracy.

In addition to increasing awareness and improving policies, technology has also become a key part of the piracy solution with efforts gearing up to develop and implement effective digital watermarking, filtering and digital rights management solutions. In the recently held U.S. Chamber of Commerce 4th Annual Anti-Piracy and Counterfeiting Summit, the need for technology to dramatically reduce pirated and counterfeited products was emphasized by speakers such as NBC Universal CEO Jeff Zucker and Viacom CEO Philippe Dauman. The event was also dominated by a call to the U.S. Federal Government for increased anti-piracy action.

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USA Video Interactive Corp. (OTCBB: USVO) (TSX-V: US) designs and markets technology for delivery of digital media. USVO developed its MediaEscort™, MediaSentinel™ and SmartMark™ digital watermarking products and technology to provide a robust means for producers and distributors to invisibly protect their content. USA Video Technology Corp., a wholly owned subsidiary of USVO, holds the pioneering patent for store-and-forward video, filed in 1990 and issued by the United States Patent and Trademark Office on July 14, 1992; it has been cited by at least 165 other patents. USVO holds similar patents in Germany, Canada, England, France, Spain, Italy, and Japan. For more information, visit: www.digitalmediastocks.com/CO/USVO/ or www.usvo.com.

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