Reposting a link to this piece in Ars Technica by Evelin Heidel, Ezequiel Martin Acuña, and me.  Here’s how it wraps up:

The combination of wider distribution and lower pricing has also begun to influence practices of financing. “Right now, traders are becoming investors,” Moscoso said. “Large retailers are becoming producers, distributors are making movies, and thus they don’t depend only on the state to produce films. Here, making a movie used to be like climbing the Everest in flip-flops and a T-shirt. You had to be lucky if you wanted to show your movie in the cinema. You had to have contacts or come from a family with a good social position. If you didn’t have any of that, you’d be happy if you managed to get your film shown once at a cultural center. But now you have the option to sell it in markets and shopping centers, where it will continue to sell.”

Moscoso is currently planning the next stages of the initiative, which will include direct licensing of films from Colombia and Argentina and the sale of inexpensive books. “We also distribute free software, and we are trying to enter the video game market with some local developers who are developing games for PlayStation,” she said.

She continued:

We stick to the principle that the discs have to be accessible. Our DVDs were initially priced at $6 dollars per unit, then dropped to $5. Soon you will be able to buy them for $3. Why the lower prices? Because of the number of DVDs being sold now. Before, maybe you only sold 8,000 DVDs of a major title in a year. Now, you can sell 45,000 units of a single title in thirty days. Here in Ecuador there are two days each week when traders go to the market and buy their discs. In Guayaquil alone, five million copies can be sold in that period. Our strategy is to sell a lot of discs at discount prices.

It’s easy to imagine other Latin American filmmakers signing up since many of them face similar problems with weak distribution. It’s much harder to imagine the Hollywood studios doing so. They may not like the old status quo of token enforcement and high piracy, but a successful challenge to their global pricing power could be much costlier.

In the end, Ecuador’s vendors and its government are trying to do something that very few developing countries have been able to do: fix the anemic market for media goods. The goal, according to Moscoso, is “a market with affordable costs for people. Access is not just an idea. Access means that people can buy it.”