Now Hollywood faces its own 'Napster' as movie pirates take to the internet

Guy Ritchie's gangster flicks have the unlikely honour of being the most pirated films in the world, a survey of movies swapped by internet users sugggests.

Snatch, which was found on more than a million computers, was downloaded more times last month than Pearl Harbor, Traffic, Lara Croft: Tomb Raider or any other American blockbuster. The research was done by Mediaforce, an anti-piracy research company based in New York.

Ritchie's film, a tale of London gangsters from the same mould as his debut, Lock, Stock and Two Smoking Barrels, was the only surprise on the list. The other films in the top 10 – Shrek, The Matrix, Gone in 60 Seconds, Hannibal, Gladiator, X-Men – were all big-budget Hollywood productions.

Each time a film is downloaded represents a potential loss to the film industry. The Motion Picture Association of America estimated that piracy costs its member studios more than $2.5bn (£1.8bn) annually – though most of that is from organised gangs making cheap video copies sold at markets.

But Mediaforce's finding underlines the increasing problem that film studios are having in preventing the spread of digitised versions of films over the internet. In many cases digitised pirate versions appear ahead of scheduled releases.

"At least three of the top 10 in our list are current hits," said Aaron Fessler, chief executive of Mediaforce. "They haven't been released yet on DVD or VHS. But then we realised that people must be taking digital camcorders into films."

The camera user would then turn the film into a compressed file on a PC, using a new format called Divx: this can squeeze an entire film into just 600 megabytes, small enough to fit on a CD. By contrast, a DVD requires nearly 10 times as much disc space, and so cannot be stored on a standard CD.

The Divx format film file would then be "shared" in the same style as with the Napster network: users could download the file directly from one computer to their own without it being visible on a website.

Such networks are used by millions of people around the world, though mainly in the United States. The film could then be watched by downloading a special Divx player available on the net.

Film studios thus face the same problem as the music industry did with the Napster system, which at one time claimed more than 40 million users trading MP3 files free.

Mr Fessler said, "Movie piracy is going to be a massive problem in the next few months."