captioning funded by cbs and ford-- built for the road ahead. >> until now no camera has been inside the plant that's

churning out the h1n1 flu vaccine. the new flu virus is injected into millions of chicken eggs. then it's refined into the shots now being rushed to all 50 states. but the questions now being asked all across the country are, is the vaccine effective? and is it safe? if there's a movement in this country to not take the vaccine, where does that leave us? >> a lot more dead people. >> it is the mark of the yakusa, ornate bull body tattoos that cover the members of the japanese mob. so how did one of their god fathers get into america and jump to the front of the line for a life saving liver transplant? this reporter found out. and says it may cost him his life. >> he was leaving and geting in his car, he said that, that god damn american jew reporter, i want to kill him.

>> open up the door. >> every mon a special unit of the los angeles police department mounts raids looking for pirates. movie pirates. in the past four years they've confiscated nearly a million dvd's. the business of pirating movies has exploded, and it's costing hollywood billions. virtually every new movie that comes out winds up being pirated on the internet. >> i'm steve croft. >> i'm leslie stahl. >> i'm bob simon. >> i'm moreley safer. >> i'm lara logan. >> i'm scott pelley. those stories and andy rooney, tonight on "60 minutes". dreams. at the hartford, we've helped you seize them... for over 200 years. protecting what you have today.

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>> pelley: friday, the centers for disease control and prevention said the h1n1 virus is widespread in 48 states. last weekend, the president declared a national emergency. a new vaccine is supposed to save the country from the worst- case scenario, but that vaccine isn't coming as fast as expected and there's lots of skepticism. should you get it? can you get it? is it safe? to find some answers, we went inside the federal government's $3 billion h1n1 vaccine project. this is the first time the public has seen where and how the vaccine is made. it's true that, for 99% of the people who get h1n1, its just the flu, a few miserable days at

home. but health officials warn that those who don't get vaccinated take a chance they'll end up like 15-year-old luke duvall, who we met in our first report on the virus two weeks ago. in mid-october, luke duvall was in a fight for his life against h1n1. we met him and his parents, chad and belinda, at arkansas children's hospital in little rock. luke was breathing only with the help of a ventilator. he would be on the machine 17 days. >> chad duvall: they're helping you, bubba, they're helping you. >> pelley: nearly three weeks later, this was luke, thursday, in physical therapy. he's still being fed through a tube in his nose, and he has a long way to go to get his strength back, but he's beaten h1n1. >> luke duvall: well, the only way i can describe it to

somebody who hadn't gone through it was its almost like somebody hit me with a cannonball in the chest. >> pelley: luke's harrowing struggle wasn't lost on his neighbors. on friday, people who'd been praying for their local football star were lining up for vaccine. but supplies were scarce; arkansas says its short about a million doses. >> you could be in line two and a half hours. >> pelley: we went to a mall in manassas, virginia, where, after three hours, they vaccinated 550 people, ran out of vaccine, and turned 350 away. last summer, the government said there'd be 120 million doses of vaccine by fall. weeks later, it revised that to 40 million. now, just over 17 million have

shipped, 14% of the first estimate. experts agree the government decoded the virus to prepare a vaccine in record time, a real achievement. but then, the project hit snags. the vaccine took longer than expected to produce, and there were shortages of supplies like the sprayer for the flumist version. this is what the country is waiting for. these are the first pictures of h1n1 vaccine being produced in a sprawling, $250 million facility in swiftwater, pennsylvania. like other vaccines, the h1n1 virus is grown in chicken eggs in an updated version of a process that's been around since world war ii. >> sam lee: viruses are unique in that they require a living host to propagate. and the egg provides, essentially, a small self- contained, sterile factory for the production of the vaccine.

>> pelley: sam lee is director of manufacturing technology at sanofi pasteur, a french drug company. the plant has to be as clean as a hospital operating room. we put on clean suits and hairnets, and passed through airlocks to reach the production line. five companies are making vaccine, but this is the only one in america. i see all these needles going into the top of the egg. is that the virus going into the egg itself? >> lee: there's the needle that comes down. the virus is then introduced in... directly to the egg. the eggs exit the machine and are loaded onto carts. these carts are then wheeled into incubators, where they're environmentally controlled for temperature and humidity. >> pelley: the virus grows in the eggs; later, its killed and refined into vaccine. the process takes three months. most of that is testing for safety and sterility. sanofi pasture has a federal

contract to make 75 million doses. they will go through millions of eggs. the farms are around the plant here? >> lee: because of security reasons, i'm not at liberty to share specific, exact locations. >> pelley: these are secret egg farms? >> lee: we don't want to reveal the location for security reasons. >> pelley: the farms in undisclosed locations are considered so important to national security that, among the first to get the vaccine, were the egg farmers themselves. the egg program is one part of a $7 billion project launched five years ago by the bush administration to build factories and infrastructure to make vaccine in case of a pandemic. the official responsible for the vaccine program is kathleen sebelius, secretary of the department of health and human services. at her national operations center, secretary sebelius was looking at figures for last week that were not encouraging.

>> kathleen sebelius: we have just under 100 deaths, at this point, that have been confirmed h1n1 deaths, and they're on the rise. >> pelley: and hospitalizations are on the rise, as well? >> sebelius: correct. >> pelley: is the epidemic growing or slowing? >> sebelius: it's growing. >> pelley: sebelius told us she learned there was trouble three weeks ago when the new virus wasn't growing inside the eggs as fast as seasonal flu virus does. some companies were getting half their usual yield. it seems the manufacturers have over-promised and under- delivered. >> sebelius: well, there's no question that the numbers that they gave us, which we relied on early on, are off. >> pelley: it left you in a jam, didn't it? your agency and the cdc have been telling everyone nationwide, "get vaccinated, get vaccinated." and what you discovered was there wasn't going to be enough vaccine. >> sebelius: well, there's not enough right now. i want to remind folks there will be enough and we want to make sure that people... if you stood in line and got turned away, come back, because the

vaccine works. we are just at the beginning of the flu season. >> pelley: the country's lucky that this virus wasn't virulent like the 1918 virus. >> sebelius: correct. >> pelley: if it was, people would look at the pace of this vaccine program and would think it was disastrous. >> sebelius: well, scott, no one wants to cut safety steps. you can't start growing vaccine until you identify the virus. so, the end of april was when this virus was correctly identified as a new and novel strain, and the process was accelerated. >> pelley: sanofi says it figured out the slow growth problem. now, it's getting normal yields and it's been meeting its deadlines. we wanted to know about the quality of the vaccine, so we went to dr. bruce gellin, the director of the federal vaccine program. how do you know this vaccine will work? >> dr. bruce gellin: the way this vaccine is made, it is targeted directly against this virus. and we've had lots of experience in the past of how, when there's a good match between the vaccine and the virus, the vaccine is very effective.

>> pelley: the h1n1 vaccine is, in your opinion, as safe as the seasonal flu vaccine that people have been taking for years. >> gellin: it's the identical process. it's as safe as what people take every year. >> pelley: when will supply catch up with demand? >> gellin: we're optimistic that supply is continuing... continuing. right now, we see that there's more demand than supply, but we're encouraged that there are increasing numbers of doses coming all the time. >> pelley: that's not exactly a direct answer to the question. what folks at home want to know is, when am i not going to have to stand in line for four hours? >> gellin: yeah, i wish i could give an answer to that. but we hope that we have experienced the bumps in the road and they're behind us. we have to be sure that's the case. >> pelley: this is h1n1 vaccine stacked high and on its way out of the sanofi pasteur plant. production is accelerating; all five drug makers added nine million doses last week. but that doesn't mean vaccine is getting to patients quickly.

it's up to each state to distribute it. michael osterholm is a top infectious disease expert at the university of minnesota. >> michael osterholm: while the pipeline is now beginning to flow, and we'll see more vaccine over the next six to 12 weeks, the faucet where that pipeline then puts that vaccine into the community is largely rusted shut. we don't have a system in this country right now for delivering vaccines to adults. >> pelley: osterholm says the great recession came at the wrong time. >> osterholm: well, think about this. we have health care systems all around the country that have just let, literally, thousands and thousands of workers go, trying to get down to bare bones just because of the financial crisis in the health care industry. in the last year, we've let 10,000 public health workers go. we've got states of multi- million people that have 25 or 30 people that are now available able to give vaccines. >> pelley: but what worries health officials most is not distribution or production; it's skepticism about the vaccine. in new york city, last week, schools reported well over half the parents declined to give

permission for the shot. nationwide, 40% of those polled say they won't take the vaccine. it may be because the internet and talk shows have added to the confusion. >> glenn beck: if its so mild, why wouldn't we just have a chicken pox party? why wouldn't we just get someone to cough on me? >> pelley: there's been limbaugh and beck and bill maher. bill maher told his viewers that they would be idiots to take the vaccine. >> sebelius: well, i tend to like to get my health advice from doctors and scientists, and that's what we would urge people to do. >> pelley: at least some concern stems from a massive federal vaccine program back in 1976 which is seen today as a failure. what was the problem in 1976? >> gellin: 40 million doses of... of vaccines were given, and about 400 people developed something called guillain-barre syndrome, which is a paralysis which starts at your toes and

can work its way up, where your... your nervous system is affected. and... and some people died from that. >> pelley: 400 people out of 40 million came down with guillain- barre syndrome? >> gellin: right. >> pelley: how do you know the same thing's not going to happen now? >> gellin: well, we have looked at this over time, and we've looked year to year and not seen guillain-barre. >> pelley: we don't really know what went wrong with the vaccine in 1976? that's not well understood? >> gellin: that's right, it's not well understood. >> pelley: but what you do know is it never happened again? >> it's never happened again. >> pelley: what would you say to someone who's... who would argue, "look, i... i've got a 99% chance of just having mild flu symptoms. why should i take a chance on a vaccine?" >> osterholm: you know, if you use that logic, we'd never, ever tell anybody to use a seatbelt. because we'd say, "you know, on any one given trip on any one given day, the chance of you dying in an automobile accident's very small." but by god, when that accident happens, you'd better have that seatbelt on, and you can't wait to put it on in the middle of a collision. >> pelley: and if there's a movement in this to not take the

vaccine, where does that leave us? >> osterholm: a lot more dead people. >> pelley: we called the deans of the top ten schools of public health in america. all of them endorsed the vaccine. bruce gellin, the director of the national vaccine program, is monitoring reports of side effects. so far, after three weeks, he's received fewer than 200 reports, mostly about muscle aches, stomach aches and sore arms. have you found any serious side effects yet that are related to the vaccine? >> gellin: we're looking hard and we haven't seen anything like that yet. >> pelley: nothing yet, out of ten million doses? >> gellin: out of 10 million doses. >> pelley: back in luke duvall's county in arkansas, the supply was so short, they gave vaccine just to those at highest risk. state officials think supply will catch up in about three weeks. the running back who set a state weightlifting record will be many more months in therapy. >> chad duvall: monday this past

week, he could not move his own feet in bed and, today, he's able to swing his feet off the bed and he's walking down the hall. so, we have great expectation that, very soon, he'll be eating, drinking, dressing, leaving this place and going home with a normal life. >> cbs moneywatch update sponsored by prescription flomax. good evening. c. i. t. which received more than $2 wl billion in bailout money filed for bankruptcy today. mcdonald's closed all its franchises in iceland this weekend because of a collapsing economy there. and michael jackson's "this is it" won the weekend box office. i'm russ mitchell, cbs news. ( music playing )

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>> logan: the yakuza is one of the most powerful organized crime syndicates in the world. it is japan's not-so-secret version of the mafia, with 85,000 members who trace their roots back to 17th-century samurai warriors. deeply embedded in japanese business and culture, the yakuza also have their tentacles into this country, and american law enforcement knows it. one man they keep a close eye on is tadamasa goto, a ruthless godfather. ordinarily, such a notorious mobster wouldn't even be allowed into the united states. but tadamasa goto not only got into the country, he jumped to the top of a long waiting list for a life-saving liver transplant at ucla medical center. this is the godfather, tadamasa goto, at a rarely seen ritual of the yakuza, filmed by the

mobsters for their own private viewing. the top bosses are gathered to pay homage at an ancient succession ceremony, the event steeped in tradition. what does it mean in japan to be a yakuza? >> ( translated ): to be a yakuza in japan is to live an unalterable way of life. it's not an occupation; it's to follow and explore the lives of the samurai, the code of the samurai. >> reporter: this man is a yakuza boss, a rival of goto's who only agreed to an interview if we masked his identity. how do you recognize a yakuza? how do you know if someone is a yakuza? >> ( translated ): it's the smell. >> logan: it's the smell? >> purple: yes. >> logan: what kind of smell? >> purple: the smell of another beast. >> jake adelstein: when you join the yakuza, they become your family. >> logan: no american knows more about the inner workings of the yakuza than jake adelstein.

he spent the last 15 years in tokyo investigating and writing about the mob. >> adelstein: generally speaking, yakuza get rid of bodies by dumping them in the foundations of buildings. they own lots of construction companies. so, you know, you're pouring a new building, you throw the body in, like, the cement, and nobody ever finds it. >> logan: so, when you look around at all these tall buildings in tokyo... >> adelstein: you could be looking at graveyards. >> logan: it's impossible to miss the mark of a yakuza. severed fingers-- tradition demands, when a mistake is made, they chop off their own finger to atone, and present the severed part to their boss. many have ornate tattoos that often cover their entire body, marking them for life. but unlike the mafia in america, yakuza don't hide their membership in the mob, because it's not illegal in japan to be a member of organized crime. and they're so much a part of japanese culture, they parade

openly. >> purple: right now, we don't hide the fact that we're yakuza. >> logan: this yakuza boss was introduced to us by jake adelstein in downtown tokyo. beneath his expensive suit, he later showed us, his body is a canvas-- like many yakuza, covered with intricate tattoos. physically, the tattoos take their toll on your body. >> adelstein: the tattoos are so... so dense that it's very hard to sweat, which means when you can't get rid of the toxins in your body, that's also very hard on the liver. >> logan: what's also hard on the liver is the hedonistic lifestyle of the yakuza. this is traditional yakuza turf. they run everything here from the girls to the sex to the drugs. but the modern yakuza is a different animal, adding corporate takeovers, financial fraud and insider trading to their criminal portfolio. that's how tadamasa goto made most of his money-- according to

japanese police files, an estimated billion dollar fortune amassed through nearly a hundred front companies. he's one of the richest and most violent godfathers. known to u.s. law enforcement as the "john gotti of japan." but there was one thing goto's power and money couldn't buy him in his homeland-- he had liver disease and desperately needed a transplant. culturally, the japanese don't believe in organ donation, so to get a new liver, he needed to come to the u.s. for a yakuza, that should have been a problem, says mike cox. he's the chief of immigration and customs at the u.s. embassy in tokyo. >> mike cox: we want to be a welcoming country, the united states. but, certainly, we don't want the yakuza coming to the united states. >> logan: because they're criminals. >> cox: they have extensive criminal histories here in japan. they are members of criminal organizations. for both of those reasons, they

would be ineligible to enter the united states. >> logan: how did he get around that? according to jake adelstein's reporting, which we confirmed, tadamasa goto made a deal with the fbi. he offered to become a rat and inform on his yakuza brothers. >> adelstein: goto said, "here's the deal. i need to get in the united states to get my liver transplant or i'm going to die. i will give you the names of all our front companies in the united states." so, in terms of not only criminal intelligence, but sort of... you know, pure, i don't know, covert intelligence, goto represented a real find for the fbi. >> logan: so, the fbi made this deal. >> adelstein: and they gave him a special visa to come into the united states. >> logan: getting into the u.s. was one thing, but getting a liver transplant at a leading american medical center like ucla was something else altogether. what's the average waiting time for someone in california waiting for a liver-transplant? >> larry eisenberg: it's probably, realistically, three years.

and it could be much longer. >> logan: not for tadamasa goto, who got a liver in just six weeks. california attorney larry eisenberg finds that surprising, especially since goto was number 80 on the waiting list. >> eisenberg: it should not be possible that an unsavory character from out of the country, with ties to organized crime, comes into the united states and gets a priority and obtains a transplant. >> logan: these two families, eisenberg's clients, both lost loved ones waiting for livers at another transplant center in the same area. salvador ceja was number two on the waiting list; john rader was number five. do you think, for one second, that this was legitimate? that they stood in line and waited just like your husband did? >> cheryl rader: absolutely not. >> logan: no. >> rader: absolutely not, no. because nobody gets a liver that quickly. >> yolanda carballo: i think they were playing god.

now, i think they were picking and choosing whoever they wanted to give a liver to. >> logan: so, in your minds, what was this about? >> rader: money. >> logan: money? >> rader: money-- spoke loud and clear. and they listened. >> carballo: that's what it's all about, money. >> logan: three of goto's yakuza cronies also got liver transplants at ucla. for them, money was no object. ucla says each of their transplants cost about $400,000. the yakuza all paid cash. the hospital also acknowledged goto and another yakuza each made $100,000 donations to the transplant center. jake adelstein says goto paid even more. how much money are we talking about? >> adelstein: according to police documents and sources, a million dollars for goto. a million dollars. >> logan: a million dollars for one liver? >> adelstein: a million dollars for one liver. >> logan: did ucla know who these people were?

>> adelstein: when you see guys with lots of tattoos, missing fingers, wouldn't it occur to you, like, "oh, this guy is a gangster." i can't believe they didn't know. >> logan: attorney eisenberg says transplant rules require extensive background checks on every patient. yet ucla insisted to federal investigators they had no knowledge that goto or his cronies had ties to japanese organized crime. ucla declined all our requests for interviews. the only thing the medical center will say on the record is that their program has been reviewed and found to be, quote, in "total compliance" with liver transplant rules. the hospital told us, "state and federal patient confidentiality laws prohibit ucla from responding to the issues raised by '60 minutes'." >> eisenberg: in my opinion, the medical center has a moral and ethical obligation to determine the source of those funds. >> logan: a moral and ethical obligation, but apparently no

legal obligation? >> eisenberg: well, it's not addressed in the rules, specifically. >> logan: because the quality of livers and the eligibility of patients vary widely, any wrongdoing in the cases of the yakuza would be very difficult to prove. the fbi also declined our requests to talk about the tadamasa goto case, which for them, adelstein says, did not turn out as planned. >> adelstein: as soon as he got his liver and was better, he's back to japan. and he only gave the fbi a fraction of what he promised, maybe a tenth, maybe a twentieth. not a complete failure, but& certainly not what the fbi wanted. >> logan: tadamasa goto returned to his life of crime as a yakuza godfather, and it all stayed hidden until adelstein was tipped off. it took him years to piece together the details for a newspaper story. then, when word got out that adelstein knew, the yakuza tried to buy his silence, offering him half a million dollars.

were you tempted? >> adelstein: of course, i'm tempted, you know? when someone offers you half a million dollars not to write something. but then again, you know, i don't want to be owned by organized crime the rest of my life. >> logan: adelstein wrote the story for "the washington post" and it eventually made its way back to japan. the news infuriated the yakuza bosses. for goto, it was a humiliating blow from which he would never recover. >> adelstein: i heard from someone very close to him that, as he was leaving and getting in his car, he said, "that, you know, that... that god-damn american jew reporter, i want to kill him. >> logan: japanese and u.s. law enforcement agents took goto's threat seriously. adelstein now lives alone, under tokyo police protection, his wife and children in hiding. are you concerned that there is an american citizen here whose life is at risk? >> cox: very much so. we think the japanese police are doing what they can to... to

make sure that no harm comes to mr. adelstein. i mean, we... we certainly don't want to see anything happen to him. >> logan: what do you have to do in your daily life to stay alive? >> adelstein: you have to keep your rooms shuttered, because you don't want a sniper to pick you off across from somebody's house. >> logan: so you live in darkness? >> adelstein: when i'm up in my room typing, yes. all the... the rooms are shuttered. i try to avoid open windows. you've got to be very careful on rainy days, because when yakuza take people out, they like to do it on rainy days, because fewer people are on the streets and the rain washes away the trace evidence. >> logan: even in disgrace, tadamasa goto still has a small army of loyal soldiers and a hit out on jake adelstein. the yakuza say he will never be safe. >> purple: he says, "when someone does something that causes them to lose face, they will use any means possible, legal or illegal, to crush the

person who has gotten in their way, who has humiliated them." >> logan: do you think that's wrong? >> purple: he says, "that's not wrong. if you're a yakuza, that's simply how you're going to behave." >> logan: so, if jake had done that to you, you would get rid of him? >> purple: absolutely. jeep. ♪ knowing that, every day, i have a choice to make. between watching the clock... and occasionally, my back. ♪ or, i can greedily, rightfully, seize every ticking moment and never give one of them back. ♪ i live. i ride. i am. jeep. hi, i just switched jobs, and i want

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[horse neighs]

>> stahl: where do you think organized crime is making its money these days? drugs, gambling, prostitution? yes, but also-- and this may surprise you-- the movies. mobsters have moved into the movie piracy business, and it's

bleeding hollywood to the tune of billions of dollars a year. movie pirates used to be small- time operators, selling vhs copies of films on the sidewalk for $5 or less. but now, with the internet and dvds, the movie piracy business has exploded, and police departments across the country are struggling to keep up. >> los angeles police department. we have a search warrant. open up the door. >> stahl: every month, a special unit of the los angeles police department mounts two or three raids looking for pirates. just last thursday, at a raid on this warehouse in downtown los angeles, they arrested two men who they say have been filling orders for counterfeit dvds for years. >> rick ishitani: that's a pretty significant amount there. >> stahl: detective rick ishitani found one of their order books. >> ishitani: these are all movies titles that recently came out. "angels and demons"-- they ordered 100 movies. we've got "terminator."

>> stahl: police say the suspects were wholesalers who acted like mobsters. they would pick up customers in this van and drive them around blindfolded before bringing them here to fill their large orders. in the last four years, the lapd has confiscated nearly a million counterfeit dvds. the dvds are made by pirates who often sit in the back row of theaters and record movies with tiny cameras. illinois police say this man, gerardo arellano, did just that. he was arrested at a multiplex outside chicago and showed up at court with his family. they were also with him when he was recording in the theater, according to investigator gary kissinger. >> gary kissinger: he was actually observed with the camera sitting on his right leg, along with his wife and small child. >> stahl: he brought a child with him to do this? >> kissinger: yes. we're finding that to be more commonplace because, not only their child, but other family

members or friends, because they act as lookouts and, also, they're less conspicuous. they blend in with the rest of the audience. >> stahl: kissinger works for the mpaa, the motion picture association of america. i interviewed him and his boss, mike robinson, at the amc multiplex where arellano was arrested. i actually heard once that some... one of these people brought a camera in in a baby carriage. >> kissinger: sometimes even in the diaper bag. >> stahl: in the diaper bag. >> kissinger: yes. actually, we've seen it where they cut out the cup holder and they'll set the... cut out the bottom of the cup holder and actually set the camera in here. >> stahl: in there? >> kissinger: and then, they control the camera with a remote control device and monitor it. >> stahl: police say arellano worked out of his home, where they found more than 13,000 dvds he had made from his recordings, along with the computers he used to upload the movies onto the internet. >> kissinger: rarely do you see

an individual that's involved in all three major components of the piracy activities; in other words, camcording, internet piracy activities, and also selling the movies on the street as well. >> stahl: john malcolm, a former justice department official specializing in intellectual property, says pirates like arellano are linked to organized crime rings that are making a barrel of money selling dvds. in mexico, the drug cartels are brazenly stamping their dvds with their logos. >> john malcolm: here, for instance, are pirated dvds by the zetas. >> stahl: where is their logo? >> malcolm: right there. >> stahl: here's a leonardo dicaprio film with the drug cartel. and they're advertising; it's just breathtaking. >> malcolm: yes. >> stahl: are they getting out of drugs and into movies? >> malcolm: no. they want to diversify. they might be doing gambling on monday, human trafficking on tuesday, child prostitution on wednesday, drug dealing on thursday, and counterfeiting on friday. >> stahl: but even more than

organized crime, it's the internet that has hollywood's hair on fire. john malcolm says pirated movies are being uploaded onto the internet in a matter of hours, and then downloaded very quickly using some gee-whiz computer& technology called bittorrent. >> malcolm: bittorrent-- and what it does is it takes a movie file, which is a very large file, and it breaks it up into very small pieces so that it is easier to trade back and forth via a swarm. >> stahl: malcolm showed us what a bit torrent program looks like on his computer. the programs are perfectly legal. but, every day, we're told, up to 50 million people around the world are using programs like this to illegally download pirated movies. and you're downloading the movie right now? >> malcolm: that's right. >> stahl: so, those little dots going back and forth are the... are the little pieces of the movie? >> malcolm: that's right. >> stahl: the tiny bits moving toward the blue column in the middle of the screen are pieces of the movie we're getting from

people all around the world. the bits moving away from the column are pieces we have and are sharing with someone else. >> malcolm: and when we get that complete movie, the technology will rearrange all of those little pieces into one complete film that is watchable. >> stahl: there's a technology that automatically puts it in it's... in the right order? >> malcolm: sure does. >> stahl: are you in despair? >> steven soderbergh: yeah, i'm in despair. well, lesley, i'll tell you, there are days when i really wish al gore hadn't invented the internet. >> stahl: steven soderbergh, one of hollywood's a-listers, is vice president of the directors guild of america, and the director of "traffic", "oceans 11," and "erin brockovich". he says piracy is costing hollywood $6 billion a year at the box office. >> soderbergh: as the margins of profit shrink, fewer projects get made, which means fewer people go to work. >> stahl: there is a feeling out there that, "boy, i got this and i'm not hurting anybody but some

fancy overpaid movie star who can well afford it." >> soderbergh: well, in fact, you know, the wealthy movie star isn't hurt by it; it's just everyone else. most of the people in this industry are not the a-list talent that you see in a magazine or interviewed on "60 minutes." >> stahl: you're talking about all the people behind the camera. >> soderbergh: supporting cast and all the crew. >> stahl: to a perfectionist like soderbergh, it's shocking that what is causing all the havoc is often a product of inferior quality where the camcorded recordings are shaky, crooked, and can include seats in the movie theater. i've seen some of these pirated movies, and you can hear the guy snoring in the movie theater. i wonder why people even want to watch these things. >> soderbergh: it's clearly a situation where the people that are buying these are not that quality conscious. they're... they're not... that's not the experience they're looking for. >> stahl: they just want to be

the first one to see it. >> soderbergh: they want to be first, and they want to pay less or close to nothing. >> stahl: in france, the parliament just passed a tough anti-piracy law. if you download pirated movies frequently, you not only lose internet service, you could be sent to prison or fined nearly half a million dollars. but in the united states, there's been resistance to punish the downloaders. i'm hearing from the industry that there's this great reluctance to really clamp down in a way that brings people into court or prosecutes people. >> soderbergh: on the internet, you're talking about millions and millions of people who are, for all intents and purposes, invisible to us, trading you know, copyrighted material. that's just like an avalanche. you can't drag those people into court. >> stahl: that's why hollywood and law enforcement have concentrated on the pirates. before some movie previews, like this one last week in california...

>> turn around, please. >> stahl: ... audience members have to pass through airport- like security. their bags are searched for cameras and they have to check their cell phones. a security officer inside the theater used night vision goggles, looking for pirates. in the search for counterfeit movies, dogs have been trained to sniff for dvds. they helped police in the philippines and malaysia confiscate nearly two million dvds. investigators searching for movie pirates also use a secret method they don't like to talk about. every print of every movie is encoded with a watermark. you can see one stamped into the top of a single frame of this movie. so, if you run a movie here, there's a specific watermark just for this theater? >> kissinger: that's correct. >> stahl: and it says, basically, it ran here? >> kissinger: that's correct. >> stahl: oh, like a fingerprint or something? >> kissinger: exactly. >> stahl: from watermarks, investigators knew movies were

being pirated at this amc multiplex. so projectionists and other employees here began looking for pirates, and that led to the arrest of gerardo arellano. in the past four years, amc employees have helped police make 55 arrests, including some pirates with international connections. but movie piracy is such big business now, that frequent raids and arrests have barely made a dent. richard cotton, an executive vice president at nbc universal, says the numbers just keep growing. >> stahl: how many movies are released every year, say, in the united states? >> richard cotton: ballpark, 400 to 500 movies are released in the united states. >> stahl: and how many of those would you say are pirated? >> cotton: virtually every movie that's released winds up pirated on the internet. >> stahl: every movie? >> cotton: virtually every one. >> stahl: when "the dark knight" came out in 2008, it was pirated, but not until after it

had been seen in theaters for a day and a half. hard to believe, but that was seen as a major victory. >> hugh jackman! come on, wolverine! wolverine! wolverine! >> stahl: and then there's "wolverine". when it premiered at a party in arizona earlier this year, it had already premiered a full month earlier-- to millions on the internet. in this case, a copy of the film was stolen while it was being edited. but "wolverine" still made a ton of money-- $160 million worldwide-- the weekend it was released. >> soderbergh: this is part of the problem with discussing the issue and talking about hollywood, because it feels like a lot of people who are making enough money complaining that they aren't making more money. >> stahl: yeah. >> soderbergh: nobody's crying for us. >> stahl: and yet the movie business is suffering, director soderbergh says, and the studios are less likely to take risks.

>> soderbergh: the chances of a movie, for instance, like "the matrix" being made shrinks. here's a guy, here's a movie, two guys, they've made a small independent film. warner brothers gives them $75 million to make this script that nobody can understand, right? >> stahl: right. >> soderbergh: wouldn't happen today. >> stahl: and things could get even worse unless something is done in cyberspace to stop people from downloading. >> cotton: what we have done for 15 years is not to put any speed bumps, any technological blocks in the way of individuals. so that the conclusion that the younger generation, in particular, draws is, if it's so easy, it can't be wrong. and that's really what we have to bring to an end. >> stahl: can you do anything? >> soderbergh: i think the best you can do is slow them down a little bit. part of the problem... look, if we could freeze... >> stahl: is that the best you can do? >> soderbergh: i think so. >> stahl: it's a game. >> soderbergh: sure. >> stahl: it's like sport. >> soderbergh: it is a sport, and there are people that are very, very good at it.

>> hello everyone, welcome to the cbs sports update. i'm james brown in new york with scores from the nfl today. the only undefeated team win and the broncos lose. favre wins his homecoming while tennessee and st. louis finally get in the win column. eagles and cowboys are tied for first. and miami wins. for more news and scores, log onto cbs sports.com. uh... yeah? you gonna ask him this time? about what? our erectile dysfunction. shh...no...i don't want to talk about it. look, you're not alone, millions of men with ed have talked to their doctors. i don't know... we can do this. okay... (announcer) talking to your doctor about ed

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>> now, a few minutes with andy rooney. >> rooney: i fly maybe 25 or 30 times a year. none of the airlines have asked for my advice but i'm going to give them some anyway. the good thing the airlines have going for them is we all like to go somewhere. our motto is "anywhere but here." i don't complain about airlines. i would, but everyone else does and i hate to be part of the crowd. but getting somewhere ought to be fun and, too often, it's unpleasant. >> i've been waiting here for hours. >> rooney: a number of years ago, there was a story about someone in a plane trying to light a bomb he was hiding in his shoe, and ever since that day, every passenger going on a plane to anywhere has to take off his shoes. i mean, one nut, years ago, who may or may not have had anything in mind, has made millions of us take off our shoes every time we get on an airplane.

do i look like someone who would hide a bomb in his shoe? i say "his" because "her" shoes are too small for a bomb. airlines keep adding to the price of a ticket, too, and i usually check a bag. the last time i flew, the airline charged me $15 for a bag that had about $12 worth of stuff in it. half the time, you have a folksy pilot. one of the best ways to pass the time in flight is by nodding off, and i wish pilots wouldn't keep waking us by making sure we see the view. "there's a great view of the rockies, ladies and gentlemen, over there on the right". well, thanks a lot, captain. i was sleeping and i happen to be over here on the left. where were you when we wanted to know why our flight was an hour late leaving? and by the way, i'd be willing to pay a little extra if you'd stop serving low fat, no salt, formerly fresh turkey breast on a wet roll. my advice to airlines is this-- keep it simple.

leave on time and get there when you said you would. we'll get something to eat later. >> i'm steve kroft. we'll be back next week with another edition of "60 minutes". considering chevy malibu. you a cop? no. you didn't hear from me, but this malibu is a best buy. i heard that from consumers digest. it offers better highway mileage than a comparable camry or accord. estimated 33 highway. i saw that on the epa site. so how come the malibu costs so little. it's a chevy. you have cop hair. the award-winning chevy malibu. compare it to anyone and may the best car win. so i couldn't always do what i wanted to do. but 5 minutes ago i took symbicort and symbicort is already helping significantly improve my lung function. so today, i've noticed a significant difference in my breathing and i'm doing more of what i want to do.

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