VZCZCXRO6837
RR RUEHLN RUEHPOD RUEHVK RUEHYG
DE RUEHMO #3060/01 2900753
ZNR UUUUU ZZH
R 160753Z OCT 08
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC 0390
INFO RUEHBJ/AMEMBASSY BEIJING 4432
RUCNCIS/CIS COLLECTIVE
RUEHXD/MOSCOW POLITICAL COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHDC

UNCLAS SECTION 01 OF 02 MOSCOW 003060 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EUR/RUS, EEB/TPP/IPE 
STATE PASS USTR FOR SMCCOY, JGROVES, PBURKHEAD 
USDOC 4231 FOR JBROUGHER, MEDWARDS, JTHOMPSON 
USDOC PLS PASS WPAUGH, SWILSON 
 
E.O. 12958: N/A 
TAGS: ETRD KIPR ECON RS
SUBJECT: PIRATED DISKS STILL WIDELY AVAILABLE IN MOSCOW MARKETS 
 
SENSITIVE BUT UNCLASSIFIED.  PLEASE PROTECT ACCORDINGLY.  NOT FOR 
DISTRIBUTION OUTSIDE USG CHANNELS OR FOR POSTING ON THE INTERNET. 
 
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SUMMARY 
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¶1. (SBU) A recent visit by econoffs to two of Moscow's electronics 
markets revealed that despite recent progress, Russia still has a 
long way to go to reduce the availability of pirated compact disks, 
DVDs and software to Russian consumers.  Vendors at the 
working-class Savelovskiy market openly sell unlicensed optical 
disks at steep discounts to licensed material.  At the higher-priced 
Gorbushka market, sellers are more circumspect, reflecting GOR 
efforts, and pirated material is not as obviously displayed.  Still, 
once the customer starts engaging in the bargaining process, many 
Gorbushka vendors offer unlicensed disks as a cheaper alternative to 
licensed products.  END SUMMARY. 
 
¶2. (SBU) On October 9, Embassy IPR attache and economic officers 
visited two of Moscow's main electronics markets, Savelovskiy and 
Gorbushka, to assess how widely available pirated optical disks are 
to the Russian consumer. 
 
--------------------------------------- 
SAVELOVSKIY: CORNUCOPIA OF PIRATED DISKS 
--------------------------------------- 
 
¶3. (U) The Savelovskiy Market in Moscow is adjacent to a major Metro 
station and one of Moscow's main train stations.  The large 
electronics section consists of dozens of small shops offering cheap 
(by Moscow standards) prices for mobile phones, TVs, still and video 
cameras, stereo equipment and optical disks.  The market seemed 
relatively busy (we visited on a Thursday) with a fair amount of 
foot traffic and customers interested in acquiring cell phones, 
video games and DVDs. 
 
¶4. (SBU) At a kiosk near the Metro station and at some shops within 
the market itself, vendors were offering "quality version" 
unlicensed DVDs of recent Western films such as Iron Man, Wanted, 
Righteous Kill, Hancock, Hellboy II: The Golden Army, and the 
Russian film New Earth, for 100-150 rubles ($3.80-$5.75 dollars). 
(N.B. Licensed copies of these movies are widely available in Moscow 
for 200-300 rubles, or $7.65-$11.50 dollars.)  In addition to the 
price difference, the disks were not stamped with the required 
license number in the center ring, indicating that they were most 
likely unlicensed copies. 
 
¶5. (SBU) Aside from pirated DVDs, we also saw unlicensed software, 
apparently counterfeit music players, and disks containing personal 
identity data that was likely misappropriated from the Russian 
Government.  Some software vendors were offering what appeared to be 
homemade copies of the latest versions of Quark Xpress and Photoshop 
for 200 rubles (about $7.65), while copies of Windows Vista were 
available for 150 rubles ($5.75). 
 
¶6. (SBU) One electronics shop was selling an MP3 music player call 
an "APod" that looked very similar to an Apple iPod Shuffle.  When 
we asked whether this was an iPod, the salesman said the APod was a 
"counterfeit from China."  One small shop was selling disks 
containing Russian passport data ("millions of entries" according to 
the sign) for 1,000 rubles ($38), customs data for 3,500 rubles 
($134), and a disk containing cell phone numbers from MTS, one of 
Russia's three major cell phone providers. 
 
-------------------------------------------- 
GORBUSHKA: HIGHER PRICES, SUBTLER SALES PITCH 
--------------------------------------------- 
 
¶7. (U) The Gorbushka Market in Western Moscow is a vast, high-end 
electronics and consumer durables shopping mall that caters to 
well-off Muscovites and expats.  Prices for both licensed and 
unlicensed disks are higher than at the Savelovskiy Market.  In a 
reflection of recent GOR anti-piracy efforts, a recorded 
announcement from the shopping mall's loudspeaker reminded customers 
that licensed DVDs and CDs provide a guarantee of quality. 
 
¶8. (SBU) However, while pirated DVDs are less obviously displayed at 
Gorbushka than at Savelovskiy, vendors will offer up their 
unlicensed material at a discount to legitimate DVDs.  For instance, 
some shops were selling the licensed version of Season One of Dexter 
(the Showtime TV Series) for 800 rubles ($31), while selling the 
unlicensed "high quality" version for 500-600 rubles ($19-$23). 
Most stores were offering legitimate DVDs of Iron Man and Righteous 
 
MOSCOW 00003060  002 OF 002 
 
 
Kill for 350-400 rubles ($13.40-$15.30), and the unlicensed "high 
quality" version for 200-250 rubles ($7.65-9.55).  Unlicensed copies 
of Disney movies the Little Mermaid and Enchanted were also selling 
for 200 rubles ($7.65). 
 
¶9. (SBU) One vendor in the mall had a "sales bin" containing various 
DVDs for only 30 rubles each ($1.15), including the 2007 Russian 
blockbluster "1612."  A street vendor near the Metro Station was 
selling DVD collections of Russian classic films and of Western 
children's movies such as the Little Mermaid and Finding Nemo for 
120 rubles ($4.60), and the new Disney Fairies movie for 200 rubles 
($7.65).  The street seller said that some vendors would have "low 
quality" copies of the latest Russian epic film Admiral by October 
10 (the day after it opened in Russian cinemas), while a "higher 
quality" version would be available in a week. 
 
¶10. (SBU) Pirated software was also not hard to find.  A computer 
software vendor was selling an unlicensed copy of Apple's 
sophisticated movie editing software Final Cut Express for 1,000 
rubles ($38). 
 
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COMMENT 
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¶11. (SBU) Our field trip to the Savelovskiy and Gorbushka markets 
shows that despite stepped-up GOR efforts, pirated optical disks are 
still widely available in Moscow to both working class and more 
well-off consumers.  Getting the authorities to take the problem of 
optical disk piracy more seriously will probably depend on making a 
convincing case that it is having a significant economic impact on 
Russia's film, TV, software and recording industries.  While pirated 
versions of Western films, children's movies and TV series are 
obviously popular with Russians, it is noteworthy that Russian films 
are also being pirated.  In our on-going engagement with GOR 
officials, we will continue to emphasize that Russian artists and 
producers, as well as foreigners, will benefit from enhanced 
enforcement of Russia's intellectual property laws. 
 
BEYRLE