U.S.-CHINA TRADE TENSIONS : Digital Technology Helped Put Piracy on Front Burner : Company Town: The means to make flawless copies has exacerbated an old problem.

One of the more intriguing questions in the debate over China’s piracy of compact discs, movies and software is: Why did it take so long for the general problem of piracy to explode into a front-page issue?

Piracy has long been a top-priority issue among music and movie makers, years before it reached the boiling point over the weekend in U.S.-China trade tensions. In the music business, piracy has been a sore spot as far back as the early 1980s, when unauthorized audiocassettes were proliferating.

So what happened? One key reason is digital technology, otherwise a godsend for the entertainment industry. Digital rescued a dormant music industry in the 1980s through the sale of compact discs. It gave birth to a new form of CD-ROM interactive entertainment.

And in a few years, it no doubt will pad studio revenues when movies start selling in Wal-Mart and Target on CD-size platters. Walt Disney will probably sell another 25 million or so copies of “Aladdin,” and director Steven Spielberg will become even richer when CD versions of his “E.T.” and “Jurassic Park” begin to fill home libraries.

But the technology also enables pirates to make flaw-free copies. Ironically, one reason CD piracy has exploded in the past two to three years is that pirate factories have frequently been able to use equipment that authorized CD factories sold when they upgraded to the next generation of manufacturing equipment.

“It’s much easier for someone to get high-quality recordings and reproduce them on a mass scale with a quality that is comparable to the product put out by the original artist. It’s really killing the market,” said Joe Yanny, a lawyer specializing in intellectual property and entertainment law whose clients have included the Grateful Dead and Paula Abdul.

A second factor is the importance to the entertainment industry of the foreign market--especially the expanding Asian economies--and the threat that piracy poses. The United States accounts for only about 30% of the $33-billion world music market now, with Asia--where sales of CDs by artists such as Michael Jackson and Whitney Houston rival those in the United States--leading growth worldwide. Asia is also Hollywood’s biggest growth prospect.

So the alarm bells naturally are going off as never before, with the industry frantically prodding government trade officials. Record executives say Hong Kong’s CD sales fell 25% last year, something they blame on out-of-control piracy.

What’s more, the industry sees China itself as the greatest untapped market for American entertainment--and as a place where it wants to develop music and film operations. But it doesn’t want to waste its money if piracy isn’t under control.

“Our member companies want to explore this vast potential market but are hesitant to do it absent real protections. It’s a market-entry question as much as it’s a copyright protection question,” said William M. Baker, president and chief operating officer of the Motion Picture Assn., the international arm of the Motion Picture Assn. of America trade group.

Some cynics have suggested that piracy went to the front burner among Clinton Administration trade officials when they saw last November’s election results. Make piracy an issue, they say the reasoning might have gone, and it will please California and ease some of the pain of an industry still smarting from being left out of the recent global trade pact.

But others say that speculation isn’t fair and that trade officials dating back to the Bush Administration were sympathetic on the piracy issue. Rather, they argue, there is a recognition that today’s pirates are large, sophisticated operations that pose a real threat to American entertainment.

“When people read about piracy, they usually think of Grateful Dead tapes sold at a flea market. But it’s about high-end CD piracy, counterfeiting products when they are released or even in advance of legitimate copies going on sale,” said Neil Turkewitz, senior international vice president of the Recording Industry Assn. of America.

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Running with the ball: Fox parent News Corp. released its earnings figures, showing, among other things, a $350-million charge stemming from its four-year contract to air National Football League games. That represents the difference in ad revenue and Fox’s costs to license, produce and market the games.

Nonetheless, Fox officials say that number doesn’t tell the whole story and that they are very happy so far.

For one thing, the eight stations that Fox owns and operates boosted revenue by 25% and operating profit by 50%, in large part because of the NFL.

Chase Carey, Fox Television chairman and chief executive, adds that the NFL also led to Fox’s increasing its presence on VHF stations instead of weaker UHF ones. It also led to the addition of affiliates in smaller markets and helped promote Fox programming to new viewers, he said.

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Like wow, man: The Eagles reunited. So did Jimmy Page and Robert Plant of Led Zeppelin.

So it was only a matter of time before Iron Butterfly got into the act.

On Monday, it was announced that original singer and composer Doug Ingle, drummer Ron Bushy and bassist Lee Dorman recently reunited the acid rock band for “new ventures” and live performances.

Iron Butterfly, which played at Woodstock, is best known for “In-A-Gadda-Da-Vida,” a 17-minute song that featured one of the longest drum solos ever, as well as a phrase a generation of college students couldn’t decipher.

To commemorate the song’s 25th anniversary, quirky record label Rhino Records is re-releasing it.