It's Not China's Poor Copyright Laws That Fuel Piracy There

from the untapped-demand dept

Tue, Apr 10th 2007 3:02am — Carlo Longino

In one of its roles as proxy for Hollywood movie studios and record labels, the US government continually complains to China that it's not doing enough to stop piracy, and threatens it with the big stick of sanctions or other actions through the World Trade Organization. While these threats are usually just hot air, the US has now formally complained to the WTO, saying that Chinese laws don't live up to WTO commitments in the area of copyright protection and enforcement. But there's a second element to the complaint, which takes issue with China's heavy restrictions on the distribution of foreign content, including DVDs, CDs, books and other products. Where things get a little bit more interesting is that the original article in the Wall Street Journal, and indeed, movie studios and record labels themselves, gloss over the second part of the complaint -- when it illustrates beautifully how backwards big content thinks.

A graph in the article says that China and France are the two nations where the movie industry suffers its biggest losses due to piracy. While the dollar amounts cited are pretty certainly bogus, is it any coincidence that the movie industry sees those two countries as the biggest for piracy when they both feature some of the tightest restrictions on the distribution of foreign content? France is pretty famous for its efforts to keep American content out of its media market, while the Chinese government allows just 20 foreign films to be shown in the country's cinemas each year. It would be reasonable to deduce that it's a lack of legitimately available, attractive products that's driving the demand for pirated goods in these countries, rather than weak enforcement of copyrights. This mimics what goes on in other markets: the content industry fails to provide consumers with attractive products to purchase -- though it's generally because of poor strategy rather than government interference -- so they turn to pirated goods instead. The market for legitimate movie downloads probably provides the best illustration of this scenario. The products offered by legitimate, studio-backed sites are so heavily restricted and overpriced that nobody wants to buy them. The idea that content providers like movie studios don't understand this is reflected in the fact that they aren't pushing the government to attack China's 20-film limit, they just want to make its copyright laws more strict. It's just another indication of how the industry won't compete with free, while it protests that it simply can't. The failure in the market isn't a failure of the government to sufficiently protect copyright holders; it's a failure of those copyright holders to provide products and services that are attractive to consumers. Update: The WSJ updated the article, and changed the graph to show another set of questionable MPAA data. The original graph can be seen here.

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38 Comments

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Terri, 10 Apr 2007 @ 4:33am

A contradiction.
This makes no sense. If the copyright holders provide no content that users want, then why do the pirates sell so many bootleg copies of that self-same content?
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- MadJo (profile), 10 Apr 2007 @ 4:39am
  
  Re: A contradiction.
  my first thought would be price. These bootlegged/"pirated" material is much friendlier priced than the original stuff.
  In a way consumers are already voting with their wallets. ;)
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- Anonymous Coward, 10 Apr 2007 @ 4:51am
  
  Re: A contradiction.
  The copyright holder want to provide the content. As it said in the story China and France drastically restrict the amount of content allowed. The demand is there and the supply isnt. Thats what is driving the piracy.
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- Joe, 10 Apr 2007 @ 5:36am
  
  Re: A contradiction.
  I think you missed the point... I China's case there is only 20 foreign releases allowed per year, so anything beyond that amount must be pirated. In all cases what is available for sale is laden with DRM restrictions making the pirated product really not the same product... Its a better.
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Cleveland, 10 Apr 2007 @ 4:43am

THis is dumb
This has got to be the worst written article ever!!
I do agree that the gov't may be keep the film industry down on these countries. Therefore making their citizens turn to bootlegs, but that still is not an vaild reason to steal.
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- Kr4t05, 10 Apr 2007 @ 5:25am
  
  Re: THis is dumb
  First of all, you used the term "steal." Stealing generally implies that there is a limited number of copies and the theft leaves one of those copies unavailable without compensation. Piracy (in the digital age) is a process of copying a currently standing media and distributing it. The number of copies available is only limited by the space one has on their hard disk. Also, you critisize this article as being badly written, yet I fail to see very pristine grammar and spelling on your own part.
  
  Thirdly, your callsign makes me picture you as a rotund African American man living in suburban Rhode Island next-door to a sex-addicted airline pilot and a family consisting of a drunk and a talking dog.
  
  "That's naaasty..."
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  - Anonymous Coward, 10 Apr 2007 @ 10:23am
    
    Re: Re: THis is dumb
    You have no right to the original to make the copy....just because it suits you to blur the lines is really quite irrelevant.
    
    A sale was not made, whether they would have swiped the copy or not, therefore you have deprived them of due compensation, thus stealing.
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  - Extreme Centrist, 10 Apr 2007 @ 3:48pm
    
    Re: Re: THis is dumb
    Someone's having a baaaad day...
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[caiocesar], 10 Apr 2007 @ 4:53am

I think this is not all true. Se the case of Brazil. It's a wide-open country, specially for foreign content. Even though it has a huge amount of pirated material being bought and sold on the streets of nearly every city.
The real cause might be the high prices that the so called legal content arrives to stores' shelves...
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ImaniOU, 10 Apr 2007 @ 4:53am

It's True
As an American who has been living in Taiwan for almost six years now, I can choose to either miss out on really good movies and television programs because although there are some foreign films and TV shows here, the only ones picked up are the ones that are extremely popular or do not rely on understanding the language. If it involves fart jokes, then it makes it. If it involves a lot of dialogue, then the companies here don't want to be bothered translating it so they just don't carry it. The law enforces everything has to be subtitled in Chinese, even Chinese-language media because of the different dialects all over the island. If it weren't for pirated movies and TV shows, I would be missing over half a decade of American pop culture. The quality of programming here sucks and anyone who wants more from entertainment than caricatures and bathroom humor is forced to seek out alternative means for getting it.
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Wolfger, 10 Apr 2007 @ 4:57am

Yeah
That about sums it up. Most people are honest, and would rather pay to get something legitimate. Piracy stems from two sources: unavailability and unaffordability.
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- Anonymous Coward, 10 Apr 2007 @ 10:30am
  
  Re: Yeah
  hhmmmm....it used to be if we couldn't afford something, we didn't have it.
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Xjy, 10 Apr 2007 @ 5:09am

re: a contradiction
Good article. The US govt is very self-serving in its trade policies, hates international agreements that thwart its greed and selfishness, and censors officials and scholars and scientists who disagree with it whenever it can. And it shills for the corporations like Big Oil, Big Pharma, Big Money and Big ShowBiz. So it tries to put a lid on the reproduction and spread of useful ideas and creative art for the benefit of useless fat cats and uncreative boneheads.

Most people don't realize that the ability to easily and rapidly reproduce ideas and art (eg books, articles, music, shows, movies, prints, photos) is heralding an explosion in interaction and creative development among ALL human beings - that's the whole of humanity, every one of us. Regardless of borders, bureaucrats or bombs.

The reason why the corporations can't compete is that almost everybody hates them, and most people can't afford what they demand. So as soon as the useful and creative things they've stolen from humanity slip through the prison bars they try and put around them, then they find their way home - to humanity.

The oligarchy (rule by the few) and plutocracy (power of the rich) that is fomenting war and destruction today wants to corner every market it can smell out in order to charge exorbitant prices for necessary products. This system wants everybody to act like ignorant selfish money-worshipping brutes like themselves. Fortunately for us (humanity) most people puke at this idea and do what they can to stay human and share their joys and thoughts with each other. You can't make lives and ideas into private property.

Artists and scientists etc need to live. Most people that make up society realize this better than the fat cats and their governments. So let society organize a fair way to do this without the insanity of present-day copyright and patent litigation.

If big stealing (say the looting of Iraq's oil, or the slave contracts big recording companies force on most musicians, or the destruction of our air and water) is sanctioned by law and government, while small stealing is stigmatized and smeared, then the system needs to be turned on its head.

Meanwhile people will do what they have to do to feel themselves as a real part of humanity, with access to the latest and greatest productions of their fellow human beings.
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Angrycoder, 10 Apr 2007 @ 5:10am

One major problem with this article is that it ix not considering ALL the forms of media that China pirates. What about all the various computer softwares that it pirates. Just to name a few of the obvious; Windows, Office, ... But it's A LOT more than that. There are many technical applications that they pirate, like MATLAB, SAS, Maple, Mathmatica, etc... Then there are the video games... I have seen university websites in China that have links to download any software you need which also include instructions on how to apply the crack. I'll post it when I find it.

The piracy in Taiwan is not nearly on the same level as China. I have been to both and seen this first hand. Don't get me wrong, I know there is plenty of piracy as I have seen it in Taipei, but it's on the same level or less as America.
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Frank, 10 Apr 2007 @ 5:35am

If the movie industry can get China to pay fines for not doing enough about piracy, there is money to be made for not producing quality. Why would they choose the other tactic of attacking the censorship and then be forced to deal with losing money because they don't make good enough content?
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All_Roy, 10 Apr 2007 @ 5:41am

First Hand Account
I live in central China right now, I like it because I get perfect quality copies of DVD's for about 1 dollar. Buit I would go crazy watching chinese tv and they are right the ammount of foreign media is next to nothing. And for how common it is, I can walk across the street where there are two stores filled from top to bottom with bootlegs.
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ElCig, 10 Apr 2007 @ 5:42am

Bogus info
This article clouds up the issue instead of clearing things. The Chinese and French governments are restricting what is available to their consumers. Consumers are then buying pirated copies of DVD's, music, whatever because the content is not available legally. If the content was available people would then be able to make a choice to buy pirated or legal and market forces would drive the outcome. I agree that enforcement of copyrights is not the issue but I disagree that the content providers are not providing popular content. The content providers are obviously providing content the people want, hence they are buying pirated copies of the content. Just because someone pirates a copy of content doesn't mean the product isn't attractive to consumers, it only means someone doesn't want to pay the packaged price for what they will receive.
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- Anonymous Coward, 10 Apr 2007 @ 5:59am
  
  Re: Bogus info
  "Just because someone pirates a copy of content doesn't mean the product isn't attractive to consumers, it only means someone doesn't want to pay the packaged price for what they will receive."
  
  Uh, duh? I don't understand what epiphany was intended to be in that posting. All you have said is that the supply and demand is out of balance. Well, yes, same in the US. We demand entertainment, the MPAA demands obscene amounts of money, the consumers demand lower prices, the MPAA ignore the consumer, the consumer pirates the movie... It's the same thing, except in China the regulation on supply is the government, while the regulation of supply in the US is price and quality.
  
  "I agree that enforcement of copyrights is not the issue but I disagree that the content providers are not providing popular content."
  
  If the content was worth the money they would make the money. The problem with the products is that they are targeted at the mass audience to generate the greatest numbers of people who might be interested. Not the greatest number of people with serious interest. Now, look at who the large majority of the US is... they are mid to low class citizens who make under $40,000 a year. Starting to see why they probably don't buy large volumes of movies? Pile on top of the economic situation the fact that the content they are selling is geared to target a broad audience and not specifically any group, and you have the makings for poor sales. If no one feels they have to own the product for what your asking, they either won't own it, or they will copy it from a friend.
  
  "I agree that enforcement of copyrights is not the issue but I disagree that the content providers are not providing popular content."
  
  They regulate the content, but it is still out there. It's not like the media content is contraband or something.
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Guy, 10 Apr 2007 @ 5:53am

Inaccuracies
As someone who has lived in both China (5 years ago) and France (2 years ago), I would label your comments as biased and highly inaccurate. First, China has no limit to the number of foreign films it releases in its theatres—your reading was mistaken. What China allows is for 20 revenue shared films. A revenue sharing deal occurs when a foreign company partners with a Chinese one to release a film, but foreign firms can sell movie distribution rights to Chinese companies until the cows come home. The problems come when agents of these Chinese companies leak the films to copyright violators.

As for your comments about France, they are entirely baseless. As a five second glance at any theatre marquee will tell you, the majority of films in French theatres are American-made. I understand your liberal tendencies (I share them as well) and desire for cheap or free media content, but uneducated, under-researched, over-opinionated articles such as this one serve only to undermine our goals. Please do your homework before posting.
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Overcast, 10 Apr 2007 @ 6:13am

You WILL pay the MPAA and RIAA, resistance is futile.
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Adam, 10 Apr 2007 @ 6:42am

I don't know about China but in Eastern Europe it's the prices. CDs and DVDs are prices comparably to USA: around $10 for a CD, more for DVD. Now say, average bus driver in NYC brings home $600-800 after taxes a week, and average driver in Poland brings home $300-500 a month. True, the driver in Poland pays 1/10th of the NYC rent and 1/3rd for meals but still.

A.
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UniBoy, 10 Apr 2007 @ 6:52am

The problem with this...
is really the Chinese government. Their markets are not open. They do not allow free flow of information in or out of the country. They practice censorship and oppression. Citizens are afforded fewer rights. And the West has increasingly chosen to overlook these attacks on their citizens because of the benefits of China as a manufacturing partner.

I realize China is undergoing change, with more potential than maybe any other country on the planet. But it is taking too long. I think the West ought to give them regular kicks in the ass to move the process along.

Of course the MPAA does not understand the big picture here. Let's hope someone else with real power does...If not, then elect someone who does get it.
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DisGuysed, 10 Apr 2007 @ 6:56am

The post that became a rant- dont read it!
This is a difficult situation. On one side we have artists or content creators creating something (and it is obviously something people want) and demand money for it. The problem is that they are demanding too much for what the consumer side of the equation wants. Hmm I think a good example of success is the manga industry in Japan. Everyone reads that stuff. Unlike here in the US only dorks and stuff (sorry for the generalization but you know what i mean) read comics. The manga industry has deep market penetration and I believe it has something to do with the fact that its DIRT CHEAP! Artists and content creators in America seem to have the wrong idea. You cant look at customers and say "oh you should thank god for being able to use our product cuz we are the greatest thing since sliced bread". You have to be atleast thankful that people want to get your works. But I think I am thinking from the perspective of wanting a happy world. Oh well fuck it all. I think some of the piracy happens because when, for example, I actually buy lets say a mp3 or some other DRMed crap (i am not saying that I buy anything with DRM knowingly) that I feel good about my purchase. I dont wanna pay 30 to 50 bux for a blueray movie because well, getting that product just doesnt make me feel special enough to warrant the amount of money I just parted with. I guess what I am saying is that pop media isnt magical and unique enough to be so expensive. A dvd disc is just a copy out of millions. Nothin special. Even more so when its a digital download. In otherwords, it doesnt matter anymore how good a movie is. How much time i am entertained is what i am paying for and entertainment is something i want all the time and i want it cheap. People want entertainment products! If its cheap enuff then getting it legally is worth it because you do actually feel better not breaking the law. But entertainment is a requirement in life these days and if its too expensive then nothing will stop me from getting it. Hmm entertainment is a drug. And i need a fix! even if i gotta steal some stuff to get it! But with the drugs i would steal other things and not steal directly from the dealer because he will probably shoot me. MPAA and RIAA either need to shoot people or get with the program! OMG i typed a whole bunch of crap!
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Lorie, 10 Apr 2007 @ 6:57am

Commerce
I couldn't have said it better! This article demonstrates the simplist of economy/commerce concepts: supply and demand... the demand is high for a variety of films/music/media/etc... so, arises a black market for those goods... it's the same principle as prohibition in the 20s. People still wanted to drink, so they found other means. When demand for something is so high, people are resilient enough to find a way to get it. Governments need to learn that ruling by the fist to preserve what THEY see as cultural identity ISN'T working... whether it be China or Iran and so on...
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Camembert, 10 Apr 2007 @ 7:08am

France?????????????
I was surprised to see France accused of being one of the two "nations where the movie industry suffers its biggest losses due to piracy."

And indeed France is not mentionned once in the aTFA, and doesn't even appear in the graph!
Russia and Thailand follow!

Do you even check your facts before you write an article before making bogus assumptions? Do yourself a favour and issue some sort of retraction.
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- Ratatouille, 10 Apr 2007 @ 7:11am
  
  Re: France?????????????
  And according to the graph, France doesn't even appear in the Top 10, what a baseless article.
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  - Carlo, 10 Apr 2007 @ 8:04am
    
    Re: Re: France?????????????
    The WSJ updated that article overnight and changed it completely, including the graph. That original graph, showing France, is here.
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Sanguine Dream, 10 Apr 2007 @ 7:39am

What gets me...
is that people are arguin over wheather or not the fault of piracy lies on the shoulders of consumers or content providers.

I'm much more concerned that the ENTERTAINMENT INDUSTRY has such a grip on the US government that it actually has a chance in hell of unfluencing relations with foreign nations. I believe that arts and entertainment are important to society but damn...
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- chris (profile), 10 Apr 2007 @ 8:21am
  
  Re: What gets me...
  the entertainment industry is all about money. coincidentally, so are our elected officials. the industry is a source of money for our elected officials and our officials really like that. it's all very logical.
  
  if i was a fat kid and i lived next door to a woman who baked and gave away pies, she would be my favorite person in the world. if anything happened to threaten my pie connection i would be very concerned and do whatever it took to make sure i kept getting pies. that too is very logical.
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Jesus, 10 Apr 2007 @ 8:05am

Wut, lul
I thought this article seemed a liitle incoherent. It's only a matter of time before we find out the RIAA is causing global warming and was invented by George Bush. This of course can be compared to the Natzis and how they invaded Japan way back in the day and forced all it's people to buy legit copies of German movies.
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Jesus, 10 Apr 2007 @ 8:05am

Wut, lul
I thought this article seemed a liitle incoherent. It's only a matter of time before we find out the RIAA is causing global warming and was invented by George Bush. This of course can be compared to the Natzis and how they invaded Japan way back in the day and forced all it's people to buy legit copies of German movies.
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yo, 10 Apr 2007 @ 10:12am

INTERNET.
I went to a conference last year and the panelists were going on and on about how those damn Asians don't understand copyright and download music and movies to further the terrorist cause and drive down the price of heroin.

Yeah.

Brick & mortar piracy has been decreasing since personal downloading has become faster and easier. The U.S. loves to point fingers at China and South Korea for both forms of piracy, claiming that the Asian cultures are deficient in morals. But I don't think it's a cultural difference. China's internet system is backed by the government, and South Korea is so small that it's easy to provide high-speed internet to every household.

In America, we've still got a sizeable population of people who don't have internet access in their own home. Everyone can access the internet, but that means they can use the internet for an hour at a time at their high school or local library, not that they can download music and movies on T3 networks in the comfort of their own home. College/university students and people above a certain socio-economic level are the majority of high-speed internet users, and I think it's safe to say that a lot of these users download.

Wait until America catches up to China in terms of people's access to high-speed internet access. Let's see how high and mighty we are about noble Americans who respect copyright then.
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Jamie, 10 Apr 2007 @ 12:59pm

Personally, I'd rather get a pirated copy that doesn't have ads saying not to pirate them then a legit copy and be FORCED to watch FBI warnings and ads about how stealing is wrong.

That's just mean.
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- Sanguine Dream, 10 Apr 2007 @ 2:05pm
  
  Re:
  But that is not as funny as watching the FBI warnings on a pirated copy...
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  - |333173|3|_||3, 10 Apr 2007 @ 8:54pm
    
    Re: Re:
    What's really annoying is being forced to watch FBI warnings on a Region 4 disc.
    I once saw a pirated disk which had the warning replaced by one saying that if the FBI treid to arrest the burner of the disc, he would be knoked out and the police called to arest him for breaking and entering, harrasment, illegal detention, and any other crimes that would stick. The wrning tracks were region coded, though the est f teh disk was not, so each region had a differne twarning notice.
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Reg Spyder, 10 Apr 2007 @ 9:45pm

Culture!
Very few people seem to pick up on the massive cultural differences. China, so long a communist state and so *social* in nature, barely comprehends the individualistic/capitalistic concept of copyrighting of art/logos/technology etc. Conversely, Americans have great difficulty in grokking the idea of 'sharing' or 'not-for-profit'. So I would say the issue is cultural, not economic or political.
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- angrycoder, 11 Apr 2007 @ 5:24am
  
  Re: Culture!
  Are you kidding? To imply they don't understand the difference is insulting. They pay for items in China just like the rest of the world. They understand that the copy they buy on the street or dl of the internet is pirated and hence a lot cheaper or free. They further understand that this hurts the companies that make it. They just simply don't care, many Americans included. Piracy is out of control in China, not beacuse they are communist and feel it's in thier culture to pirate, but rather because of lax laws or enforcement they have devloped a culture of piracy. Also, as I pointed out earlier they pirate a lot more than just movies and they steal western technology like it's going out of style. Again not because of their communist leadership and feelings of shraing(LOL), but rather their indifference towards american/western well-being.
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Yo., 12 Apr 2007 @ 2:35pm

Re: Internet
My point was that I don't think that Americans feel any differently towards copyright than the Chinese do. We just lack the Internet capability to pirate on the same scale. (I'm talking downloading). How many of the people who have access to high-speed internet download "illegally"? How many of the people who DON'T download "illegally" don't have access to high-speed internet?

Of course, there's also the cost of hard drive space to store all the downloaded data.

To the people who say that the right to the original doesn't mean the right to make a copy and if you can't afford, go without it, etc. etc.. So if I buy a wooden chair, I'm not allowed to build one exactly like it? Or six chairs exactly like it? That's copying. Technology has just made it easier for us to copy.
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