Rampant piracy of intellectual property in China has long been a sore point for companies like Microsoft (MSFT), but Disney (DIS) seems to be playing both sides of the fence. Today the WSJ reports that Disney hits like “Wall-E” are available on Chinese video site 56.com — which is funded in part from Disney’s Steamboat Ventures.
WSJ: John Ball, founder and managing director of Steamboat, says the firm was aware that pirated content was a potential issue when it made its investment in 56.com, but thought it could promote legal content on the site and work toward eliminating pirated material. One of the company’s investment strategies “is to help the legitimate evolution of digital content online,” he says .
Eric Garland, chief executive of Big Champagne LLC, a firm that consults for copyright owners on piracy issues, says Disney’s involvement in such a site is “ironic” and “shocking.” But he added that Mr. Ball’s rationale has some merit, as simply shutting down the site would drive infringing users to other sites.
Not so shocking to us. The only solution to the problem of piracy in China is for the Chinese government to aggressively and consistently enforce its own laws and uphold its promises to stop the pirates — something Beijing so far has shown no signs it intends to do. Until then, companies like Disney could be best off trying to recoup whatever revenue they can, even if it means getting into bed with the very people who are ripping them off.
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