The film Missing Gun, which premiered in 2001, Kekexili in 2004 as well as City of Life and Death, which earned hundreds of millions at the box office, made Director Lu Chuan well-known to the public. Generally, greater publicity and higher box office revenue leads to more serious piracy. As a director and producer at the same time, Lu Chuan feels the headache of piracy and also has deeper feelings.

During the Intellectual Property Publicity Week this year, Director Lu Chuan and the band Main Line, from the Taiwan region, were appointed by the General Administration of Press and Publication (GAPP), the National Copyright Administration (NCA) and the National Office of Anti-Pornography and Anti-Illegal Publication Campaign as “Anti-piracy Image Ambassadors”. To take advantage of this opportunity, China IP contacted Director Lu Chuan.

“The film market is much like a garden, where vegetables should belong to the planters. However, piracy makes it impossible for planters to get their harvest, because these ‘thieves’ have stolen the vegetables.” Lu Chuan told the reporter with a bitter smile.

China IP: You were appointed as the “Anti-piracy Image Ambassador” when the film City of Life and Death came out. Was it helpful at the box office?

Lu Chuan: I should admit that it was a “timely help”. This film was released on April 22 nationwide, but after only five days our inspectors throughout the country discovered the pirated version, which had already begun to spread. At that time, we reported to the NCA and other related departments via CCTV and they responded quickly. Documents were issued to protect our film and strict law enforcement was launched nationwide. Hundreds of thousands of pirated film discs were confiscated from a truck that was seized on the highway to Beijing, which was of great help in protecting the Beijing market. In other cities, such as Guangzhou and Shanghai, local governments also engaged in strong law enforcement. Consequently, the success of this black-and-white historical film, which earned a total of 180 million at the box office, could not have been achieved without the strict copyright law enforcement of the government.

China IP: Could you estimate the losses that would have been caused by piracy if there had been no timely governmental law enforcement?

Lu Chuan: If there had been no governmental law enforcement, I think the box office would have been reduced by tens of millions. We do not have specific figures. However, according to the projections of Mr. Han Sanping, Chairman of the China Film Group, if a best-selling film can earn 100 million at the box office, piracy will generally lead to 30 to 40 million in lost revenue. He also has another theory to explain why piracy cannot lead to a complete loss of profits on a film, which is that people who see films at the cinema can be differentiated from those that see films on DVDs. A large part of the first group will go to the cinema whether there is piracy or not. They will always go to the theater to see a movie and they are a guaranteed source of revenue at the box office.

China IP: The Taiwan band Main Line was also appointed as an “Anti-piracy Image Ambassador”. It can be said that you represent the film industry and they represent the music industry. Have you ever exchanged views on anti-piracy issues? What are your views on music piracy?

Lu Chuan: So far, we have had no exchanges. Still, I believe that we share the same opinion towards piracy: We all hate it very much and suffer a great deal from it. I think the effect of piracy to music is larger than that to the film industry, because network piracy is more destructive to music. The film industry can reclaim some expenses in the cinema line. In contrast, network music downloads can be found everywhere and users don’t have high requirements regarding quality, so music downloads are good enough to meet the demand.

China IP: From our point of view, artists always have high incomes. You are a director with nearly 200 million in box-office sales, so we also assume that you must earn a lot of money. Does piracy affect your income?

Lu Chuan: Musicians can be divided into two groups: one group is the stars and singers, and the other is songwriters. I am acquainted with a lot of singers who are really “wealthy”. Some front-line singers may even make 200 to 300 thousand Yuan for one show. If there are several performances every month, it’s easy for them to earn one or two million monthly. Thus, their annual income may reach ten to twenty million Yuan. But for songwriters, they can only sell the song once, and the best price may be only 10,000 Yuan. No matter how many times a singer performs the song, the songwriter receives no further payment. As a director, I am also a creator. So far, I personally have not been paid for the film City of Life and Death. For the whole production team, except for the screenwriters who have received half of their pay, none of the producers and promoters has been paid.

China IP: From the perspective of the industry as a whole, does piracy cause the most serious damage to the creator or IP producers? In other words, where is the damage manifested?

Lu Chuan: I should emphasize that the biggest problem caused by piracy is the disorder in distribution system of the film industry, which affects us all. I would like to compare the film market to a garden, where the vegetables should go to those who plant them. However, piracy has made it difficult for the planters to harvest, because the vegetables have been taken away by these thieves. Therefore, creators become the bottom species in the “food chain”, followed by investors, while the pirates move to the top of the chain. I think this is a rather dark fact. In theory, film is produced by the creators with the money from investors. Then investors reclaim their expenses and creators get paid according to the market. However, the reality is that a large amount of profits are stolen by the “thieves” and the stolen profits can no longer be distributed. As a result, creators bear the losses to a large extent. Take the film City of Life and Death for example: After the film was released, cinema chains got their part of the proceeds, and then issuers got their income. After that, investors reclaimed their portion of the sums, and finally creators got their part. As a matter of fact, film creators are also the creators of wealth. In the absence of their labor and hard work, there would be no film or copyright and copyright transactions would become impossible. To be blunt, I am the core of a creative team, but still I have not gotten my pay yet. A significant portion of the proceeds is gained by the pirates. To be more exact, is grabbed by the pirates. One pirated disk may edge out one or even dozens of movie tickets. One of my friends gave me a call the other day saying that he saw my film in school. I asked how his class could see the film and he said that they watched a DVD. Thus, I think piracy disrupts the fair distribution principle of the film market and damages our interests in consequence.

China IP: In addition to disrupting the distribution principle, in what other ways do you think piracy damages the film industry?

Lu Chuan: Some of the damages are obvious. For example, film producers may earn nothing as a result of piracy, especially for those who shoot low-cost literary films. Inherently, it is difficult for literary film to enter cinemas. Moreover, film fans now have formed the habit of watching commercial films and literary films via disk. This has brought great harm to the literary film market. I have some friends who shoot marginalized films which are targeted at a very small audience. However, their films are favored by pirates in particular. The more pirates like these films, the greater the damage will be. As I said before, the distribution principle of this industry has been destroyed by piracy, and the return system becomes unhealthy. On one hand it discourages investors and creators. In the face of commercial interests, who will take three or four years to make a good film? Thus, a growing number of young directors are encouraged to shoot funny, commercial and entertaining films, and no one is willing to touch the serious topic. In fact, literary film is one of the big genres in the United States, such as Brave Heart, The Godfather and so on. But shooting these films takes two or three years. If the return system is unhealthy, no one will be willing to produce these films.

China IP: Between pirated DVDs and network piracy, which do you feel is more damaging?

Lu Chuan: As a matter of fact, network piracy has invaded the market of pirated discs (laughs). Previously, pirated DVDs left little room for genuine disks, which also explains why film makers could not reclaim the proceeds. Now Internet is capable of almost everything, which worries the entire industry. Many young people are now downloading films from the Internet. I spoke with some of them and asked, “DVDs can be watched on a TV, but can a computer screen be as clear as a TV?” Then I went to Internet cafes and saw films on computer screens. They looked so clear, especially the high-definition films. With a headset, the sound effects were not that bad either. I think these factors are exterior though and the key issue is that these young people have been accustomed to downloading movies free from the Internet, which has become their way of life. Our DVD issuer complained that few people will buy genuine DVDs because of Internet downloads.

China IP: Regarding the film City of Life and Death, does anyone ever say that such films should focus on spreading culture instead of earning money? Moreover, shouldn’t we allow every Chinese citizen to see this film, not just those who buy movie tickets at the cinema?

Lu Chuan: Surely, there is such an opinion. However, we have not been paid for the four years it took to make this film. From the perspective of the industry, investors certainly should get some returns from the film, or else there will be no funds to support the film industry. At present, network piracy advocates the concept of freedom to share. I think this idea is very good, but it must also take into account the issue of equitable distribution. I agree with a theory that personal freedom is not unlimited; the border of one person’s right is the border of another person’s freedom. From the perspective of this film, if the freedom of piracy offends other person’s rights to live, it is a very cruel freedom in my opinion. If free distribution could destroy an industry, I do not think it is very appropriate.

China IP: You said before that if film fans ask for your autograph on pirated DVDs of Kekexili, you would be happy all the same. But now if someone asks you to sign a pirated DVD of City of Life and Death, what would you do?

Lu Chuan: I would sign it for him anyway! (laugh). A creator is not a businessman (sigh). Once the film comes out, we are always happy to have fans like our work. It is gratifying that I only found one pirated DVD of City of Life and Death. It was a very high quality pirated product, so the fan may not even know whether it was pirated or not. Still, I can tell it from the genuine one. I think there have been improvements in the awareness of supporting genuine products, more or less. So far I have not seen anyone asking for my autograph on a pirated DVD with plastic packaging. I remember clearly when Missing Gun and Kekexili came out, I encountered all kinds of pirated DVDs. There were seven or eight versions of them.

China IP: As a director, do you think piracy could also provide a channel of distribution?

Lu Chuan: I think it is hard now. In the past, most of Jia Zhangke’s films were in fact disseminated by pirated DVDs, because at that time it was extremely hard for his film to enter the normal distribution channels. At present, there are no more “underground directors.” Moreover, most people bought pirated disks in order to save money instead of to see a good movie. Piracy would not play an important role if a director’ films cannot step into cinemas

China IP: Have you ever bought pirated disks?

Lu Chuan: I don’t buy pirated products now. To be honest, I bought them when I was younger. I have to admit it and there is no excuse.

China IP: Now you also set up your own film company. Is anti-piracy one of the working tasks?

Lu Chuan: It certainly is. However, all that a company can do is to keep the film confidential from the script writing to distribution phase, because a lot of previous pirated products were spread out from the inside before. However, we can do nothing in the law enforcement phase after issuing the video.

China IP: Personally, what do you think is the most effective way to curb film piracy?

Lu Chuan: I hope the country’s laws will be more stringent. From my perspective, knowledge is wealth. In reality, if money is stolen it is deemed as theft. However, if the wealth of knowledge is pirated, it is not deemed as theft. I think laws will become more effective if piracy is dealt with as a criminal offense.

China IP: Currently the box office revenues of films are very high. Do you think this is because that the damage of piracy is reducing or the overall situation is getting better?

Lu Chuan: I do not think so. I believe that the harm of piracy is still not diminished.