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An inside peek into the world of Jakarta's illegal DVD trade

Jakarta Globe - February 15, 2009

Nivell Rayda – "Freddy" – who entered Jakarta's huge pirated video and later pirated DVD market more than 20 years ago – has experienced police raids several times. Yet, he's still in business.

Shedding new light on the depth of the market, how it works and why pirated DVD stores continue to flourish in Indonesia, Freddy told the Jakarta Globe over the weekend: "It's a lucrative business. As long as they are people buying, we'll continue to sell pirated DVDs."

Freddy claims to make Rp 300 million ($25,500) a month selling DVDs, adding that some of his friends even make more.

Freddy, not his real name, owns three stores in Jakarta and is very particular about their location. He prefers smaller, middle-class malls over the more elite retail areas, largely due to the demography of the buyers and "security."

"Places like ITCs [Indonesian Trade Centers, malls dedicated to small- and medium-sized enterprises] are the favorites," Freddy said. "They have many exits and the layouts of such malls are like labyrinths, enabling us to escape whenever the police raid the place. Usually we rely on the doorman or the security guards to alert us and we immediately stash our goods and shut down the stores."

There are a number ITCs throughout the capital, and each one can host up to 10,000 stores that sell a huge range of different products, enabling pirated-DVD outlets to be unobtrusive. The ITCs are also divided into hundreds of blocks of stores. Navigating through them can be disorienting.

One South Jakarta mall, categorized as an ITC, has an entirely separate section dedicated to pirated DVD stores, which can remain hidden to first-time visitors. Denny, a frequent buyer there, said he was once trapped in the section when the police arrived.

"They immediately cut off the section by closing down the metal gates and rolling doors," he said. "They also turned off the lights at the section entrance and put trash bins and scaffolding in the way to make it appear that this part of the building was not used or under construction.

"Inside, it was business as usual. My heart was racing. A sales girl told me that raids like that are frequent and that they never get caught. She even showed me a secret exit stairs for 'just in case' and continued to offer me DVDs."

Some people are not as fortunate. Police and the government brag about their achievements, boasting that more than four million illegal DVDs were confiscated last year and more than 100 sellers were prosecuted.

"Four million? The number is far more than that," Freddy said, indicating the raids would not put a dent in the market. "I say in Indonesia, there are at least a hundred times more."

The International Intellectual Property Alliance estimates that each year, the US music and film industry loses more than $205.2 million due to copyright piracy in Indonesia. The alliance ranks the country among the biggest offenders in the world and places it on a watch list year after year.

Pirated DVDs, Freddy said, can be categorized into certain groups based on their quality and origin. Low-end DVDs are recorded using a camera smuggled into movie theaters and the quality is usually amateurish. He sells those kinds only for movies that are currently, or yet to be screened, in Indonesian theaters.

"The people recording them are usually slackers wanting to get some quick money," he said. "You can take your recorded materials and send it to an agent. The agents pay you a fixed rate based on the popularity of the movie. If your materials are pornographic, you can get up to Rp 100 million. It pays to be the first. About one week after a movie is screened you can find the pirated version," he added.

For the higher-quality DVDs, people have to wait up to a month after a movie is released, Freddy said. "The pirates work with a local theater and copy the reels on to a DVD master, which is then duplicated," he said. "That's why the quality is better. For non-English movies, we usually import them. All they have to do is to sneak one master copy in and the movie is pirated."

Freddy said that the pirating business is as elaborate as the legitimate movie industry. "They have their so-called production house, they have translators of every language imaginable, they have factories, graphic designers, distributors, wholesalers," he said.

"We retailers never meet these people. It's a business that relies on secrecy, much like selling drugs. It's cutthroat, too. "Often, the pirated DVDs get pirated by amateurs. I guess that's karma," he said with a laugh.