Global Music Industry Looks to Brazil to Lead the Way in Fight Against Piracy
in Latin America
Dateline: October 27, 1997
Brazil's flourishing music market has brought it world class status in a US $40
billion global industry - but piracy at home and abroad jeopardizes the
success story.
Latin America's biggest musical success story, Brazil is being threatened by
piracy, and record industry leaders, and the Brazilian star Roberta Miranda on
behalf of the Brazilian performers, today called on the Brazilian Government
to give priority to this crime and to take strong and immediate action to
defeat it.
IFPI, FLAPF and ABPD, the international, regional and national record industry
associations are urging Brazil's government to be a role model for Latin
America in the fight against music piracy, and to protect Brazilian music - by
stronger enforcement, customs controls and approval by the Congress for
alteration of the criminal law.
Brazil's Music Success
Now worth US$1.4 billion at retail value, the Brazilian music market has grown
by almost four times since the start of the decade, and has shot up in ranking
from the thirteenth to sixth largest music market in the world. In 1996, the
market grew by 32% and with half-year sales in 1997 already up by 12%, the
signs for 1997 are looking good.
Brazil's unique melodies and musical rhythms - MPB (Brazilian popular music),
Bossa Nova, rock, pagode, ax‚ music and sertaneja - make it one of the richest
sources of repertoire in the world. And Brazil's global success can be
attributed to the millions it invests every year in new, local talent; around
70% of all music sold in Brazil is of Brazilian origin - one of the highest
levels of domestic repertoire in the world.
The success of Brazil's artists within the region, and internationally, has
been phenomenal - Roberto Carlos, Tom Jobim, Caetano Veloso, Negritude Jr.,
Raga Negra, Legico Urbana e Exaltassamba, Paralamas do Sucesro, Skank and
Daniela Mercury amongst others, have contributed significantly to Brazil's
overseas earnings.
Brazil could do even better - but its success is clouded by an illegal market
for CDs and cassettes, which makes it one of the biggest consumers of pirate
music in the world. Artists, publishers, record producers and the government
all lose out to piracy, as their revenues are stolen from them - and it also
threatens the investment needed to nurture Brazil's next generation of
artists.
The most serious threat of piracy in Brazil is its international/local
underground infrastructure. The black-market of Paraguay's Ciudad del Este,
contraband of products from Taiwan, China, South Korea, other Asian countries
and even the USA, together with underdeclared imports and local pirate
production, work together to create a real criminal network which mainly
targets Brazilian music.
As serious a threat as the piracy itself is the lack of action to fight it on
a national level. The Brazilian government is called on to take immediate
action to protect this national treasure, and to stop this potential
tidal-wave of piracy from flooding the Brazilian music market.
Cost of Piracy
Pirates in Brazil are estimated to have earned US$200 million in 1996: losses
to the industry are at least double this because the pirates only take the
biggest hits from each company and produce illegal albums and compilations.
It is not just the music industry which loses out. Piracy also costs the
Brazilian government hundreds of millions of dollars in lost tax revenues.
Money which could, otherwise, go to support housing or education projects. At
present, over 60,000 people are employed, directly or indirectly, by the music
industry - and these jobs are all under threat by piracy.
Piracy in Brazil is now at 45% of the market. The cassette market in Brazil
has been totally decimated by piracy. It is estimated that 60 million pirate
cassettes were sold in 1996, representing 95% of the market, which is one of
the highest levels in the world. CD piracy is estimated at 3.1 million units
- but is rapidly increasing. If CD piracy is allowed to take a grip of the
market in the same way that cassette piracy has - it will destroy Brazil's
music market forever.
Paraguay is a major source of pirate cassettes and CDs coming into Brazil. Of
the 60 million pirate cassettes sold in Brazil, it is estimated that half were
from Paraguay. In addition, according to the industry's investigations, the
pirates of Ciudad del Este are manufacturing pirate CDs of Brazilian music in
far off places like China, South Korea, Singapore, Hong Kong and Taiwan. The
pirate CDs are packed in Paraguay, and then sent to Brazil.
Local production of pirate CDs and cassettes in Brazil is also a problem -
made worse because of unrestricted imports of duplicating equipment,
unregulated sales of blank tapes and CD jewel boxes, and no control on imports
of recorded CDs which are declared as blank CDs or which are imported with
false information.
The piracy situation in Brazil is exacerbated by the massive distribution
system of street vendors (camelos) - which is difficult to control via police
actions. Determined action by the Brazilian government, however, could stop
this.
Positive Developments in Brazil's Fight Against Piracy:
To deal with the increasing piracy, the industry created a special anti-piracy
organization, 'APDIF do Brazil', with investment of almost US $2 million a
year. APDIF has produced a handbook to educate police about piracy, carried
out a series of successful raids on CD and cassette manufacturers - seizing
equipment and pirate product, and has launched a Number for information about
piracy: 0800 - 11 57 51.
At the beginning of this year, the world's most ambitious hologram program
ever was launched in Latin America. A 3D hologram which incorporates the
FLAPF logo, has been introduced on all legitimate cassettes and CDs. The
program will be continued in 1998, and already over 200 million holograms have
been ordered for this purpose.
Actions Needed:
IFPI is calling on the Brazilian Government to protect Brazil's own music from
piracy by strengthening enforcement measures on a nation-wide basis.
Specifically, IFPI is now calling on Brazil to take the following actions:
- The Federal police should implement a National Program to enforce laws
which protect sound recordings and other copyrighted material.
- The Finance Ministry and Customs should join in the fight against
piracy to eliminate smuggling and tax evasion.
- Itamaraty (the Foreign Ministry) should provide for more controls on
the large scale contraband of pirate material from Paraguay.
- State Governments in the major states need to be encouraged to begin
anti-piracy programs. Coupled with this must be an education program to train
enforcement agencies, prosecutors and judicial officers on copyrights and
intellectual property rights.
- The Judges should recognize piracy for the crime that it is, and
punish the crime with real deterrent penalties.
San Marino Moves to Wipe out Music Piracy
Dateline: November 25, 1997
It took the sale of pirate copies of Elton John's tribute to Diana, Princess
of Wales, "Candle in the Wind 1997" in the shops of San Marino to finally
convince the authorities there to take action against piracy. The recording
industry was pleased with the recent announcement by San Marino's Foreign
Minister Gatti that all local retailers have signed an agreement committing to
sell only legitimate product purchased from an official distributor.
The move follows intense pressure over the last year from the international
recording industry and the US and UK Governments. San Marino - the tiny
republic and pirate haven - has for years been a problem for the music
industry, with levels of piracy at over 90% of the market. Apart from a high
level of local piracy, San Marino was notorious as one of the world's main
import centers of bootlegs - which were distributed to the rest of the world,
often via Internet sites offering mail-order services.
Bootlegging - the unauthorized recording of a live or broadcast performance -
has been a major contributor to the estimated US$ 5 billion lost by the
legitimate recording industry each year to international piracy, and
bootleggers in San Marino played a significant part in this - with catalogues
including repertoire from the all of the world's best-selling artists, such as
the Beatles, INXS, Oasis, Bruce Springstein, Madonna, as well as Italian
artists such as Eros Ramazotti and Zucchero.
The situation in San Marino was brought to a head at the end of September when
music industry investigators found pirate copies of "Candle in the Wind 1997"
on sale in numerous stores in the tourist area of the town. Following strong
representation to the San Marino Authorities by the British Government, the
pirate copies were immediately withdrawn from sale throughout the Republic.
Gatti's new agreement with the retailers as a result of this will be
supervised by the government, and is the first positive step in the fight
against piracy in San Marino.
Speaking about the new retailers' agreement, IFPI's Director of Operations,
Mike Edwards, said, "We are pleased to see that the San Marino Authorities
finally seem to have taken decisive action against music piracy, which has
dogged the market and damaged the Republic's international reputation for many
years."
Edwards continued: "The US and British Governments should be commended for
their work in consistently raising this issue. Although San Marino is now
free of pirate sales, the two cassette plants there have lost a market
overnight - and we will be monitoring the situation closely. We call on the
San Marino Government swiftly to implement and enforce the provisions of the
new anti-piracy law controlling the manufacturing of sound recordings."
Enzo Mazza, head of FPM, the music industry's anti-piracy operation based in
Milan, added "We are strictly monitoring enforcement of the agreement and are
patrolling retail shops to ensure that products sold are legitimate.
Information about any violations should be immediately reported to the
appropriate enforcement authorities."
Notes:
- IFPI (International Federation of the Phonographic Industry),
represents some 1,300 record producers in over 70 countries around the world,
including the six majors (BMG, EMI Music, PolyGram, Sony, Universal and
Warner). IFPI campaigns for the introduction, improvement and enforcement of
copyright and related rights legislation and co-ordinates the music industry's
anti-piracy activities.
- FLAPF (Federacion Latinoamericana de Productores de Fonogramas y
Videogramas) is the Trade Association representing the companies which create,
manufacture or distribute approximately 90% of the sound recordings sold in
Latin America. FLAPF is an affiliate member of IFPI.
- ABPD (Associa‡ao Brasileira dos Produtores de Discos) has 20 member
companies in Brazil.
For further information contact:
IFPI Secretariat
54 Regent Street
London W1R 5PJ
Catrin Hughes, IFPI Director of Communications
Tel: (44 171) 878 7900/02
Fax: (44 171) 879 7950
(For additional information, see also Yahoo/Reuters, 10/7/97, Angus MacSwan;
Yahoo/Reuters, 10/29/97, Michael Christie
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