Douglas Crockford

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December 2007

At World's End

For many years, the studios have been complaining about China's lax enforcement of US intellectual property laws. Earlier this year, the studios goaded the US Trade Representative to file a formal complaint at the World Trade Organization against the Beijing government. Somehow, they expected that China would not retaliate.

Somehow, they expected wrong. China's Film Board has stopped reviewing US films, effectively closing the country to America's big screen entertainment products. This will have a real financial impact of tens of millions a year, which isn't a lot compared to their imaginary losses, but it is real money rather than imaginary money. Combine that with lost potential earnings due to the writers' strike and next year's actors' strike, and the IP business isn't looking like such a good business.

The lack of availability of licensed product in China means that there will be more demand for unlicensed product. So not only did the studios' nasty policies create real losses, they will also significantly increase their imaginary losses.

There has always been a smarter course of action open to the studios. It is still open.