August 2003

Record Labels, Music Publishers, Artists, Internet

A report published by the International Federation of the Phonographic Industry (IFPI) shows that the illegal music market is now worth $4.6bn (£2.8bn) globally. It believes two out of every five CDs or cassettes sold are illegal. The IFPI said much of this money is going to support organised criminal gangs, dispelling the myth that it is a “victimless crime”. Jay Berman, chairman of the IFPI, said: “This is a major, major commercial activity, involving huge amounts of pirated CDs. The IFPI’s top 10 priority countries where labels want a crackdown on piracy are Brazil, China, Mexico, Paraguay, Poland, Russia, Spain, Spain, Taiwan, Thailand and Ukraine.
The IFPI also pointed out that when factoring in unlicensed downloads then “only one in three music products in the UK is authorised.” Despite the increase in the amount of CDs illegally produced and sold around the world, up 14% on 2001, there has also been a rise in the amount of CDs and recording equipment seized. The number of discs seized on their way for public sale was more than 50 million, a four-fold rise on the previous year. The IFPI is concerned in two main areas – the mass production of professional looking CDs and cassette but where no royalties are paid to copyright owners (labels and artists) the growing problem of CD-R piracy, where albums are created using CD-burning computer software which can allow mass production relatively cheaply and discreetly.
Action has been taken against Ukraine, including US trade sanctions which are still in place because of the Ukraine’s failure to bring an end to rampant piracy. Recent actions have also included a successful action by labels against Spanish online download site The site, which claimed that its operations were in compliance with Spanish copyright laws and insisted that it had obtained licenses from trade associations in Spain that represent music publishers, was closed down. The site offered 8 hours of downloads for $3.99 or a monthly service for $24.99. The record companies were able to bring the case in a US court because site owner Sakfield Holdings is doing business in Washington DC and because the site has been maintained through a US-based server.
The IFPI is now calling on governments worldwide to aid the fight against piracy by enforcing copyright laws and regulate optical disc manufacturing. It also wants countries to aggressively prosecute offenders, seize their equipment and to seek compensation for copyright holders as a deterrent.


Also see other Law Updates on this site, including: Stiff Penalties Handed Down To UK Music Pirates (April 2003), RIAA wins at First Instance Against Verizon (March 2003), Easyinternetcafe Download Service Illegal(February 2003), and New Actions In Cyberspace (December 2002).

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