Monday, July 14, 2003		Feature

CD piracy hits music industry
Bernhard Warner

MORE than one billion illegally copied compact discs were sold last year, the latest sign that the beleaguered music industry is failing in its bid to wipe out piracy, a new industry study said.

In 2002, the sale of pirated CD copies rose 14 per cent to 1.1 billion units from the previous year and has more than doubled in the past three years, turning a street-corner trade into an estimated $4.6 billion business, the International Federation of the Phonographic Industry (IFPI) said in its annual piracy report.

At $4.6 billion, the global market for pirated music now ranks as the third biggest in the industry behind the USA and Japan.

While the new figures track unauthorised CD sales, it does not take into account the economic toll of online file sharing, an activity difficult to measure.

The music industry blames the proliferation of CD-copying and online file sharing networks for contributing to a three-year decline in recorded music sales, a slump some predict could last a few more years.

The global recorded music market fell 7 per cent by value last year to $32 billion, the IFPI said, with unit sales totalling three billion.

In a sign of the industry’s struggles, the world’s third biggest music company, EMI Group said a slump in the crucial Japanese market could further postpone a recovery.

IFPI Chairman Jay Berman used the occasion to call for harsher jail terms, strengthened copyright laws and tougher policing tactics to shut down plants that mass produce CDs.

"Our industry invests substantial resources in fighting piracy, but our self-help strategies critically depend on help from governments," Berman said.

Piracy crackdown

The IFPI, which represents scores of independent and major music labels including Sony Music, Warner Music, Universal Music, EMI and Bertelsmann, has vowed to step up its lobbying and education efforts this year to cut down on piracy on all fronts.

It has also helped police crack a series of piracy rings, resulting in seizures of bootleg CDs in Mexico, the Philippines and Luxembourg. The group said it shut down 71 CD production plants last year with a combined production capacity of 300 million discs.

The IFPI also named its top 10 problem countries where local piracy laws remain weak and piracy rates high. The list included: China, Brazil, Mexico, Paraguay, Poland, Russia, Spain, Taiwan, Thailand and Ukraine.

In China more than 90 per cent of all music sales are in the form of unauthorised bootlegs worth more than $530 million, the group said.