Washington, D.C. - June 11, 2002
Global sales of pirate music discs rose nearly
50% to an all-time high of 950 million units in 2001. The total world music
pirate market was estimated to be worth US$4.3 billion, a slight increase on
the previous year.
Organised CD-R piracy is driving this proliferation in the traffic of illegal
music. Pirate production is now roughly split between large-scale
manufacturing plants and small-scale organised CD-R garages and laboratories.
Commercial CD-R pirate sales tripled in 2001 to 450 million units.
Actions by enforcement authorities, assisted by the music industry, contained
the spread of music piracy in 2001. There was a sharp increase in the number
of discs seized and pirate lines de-commissioned, mainly in South East Asia
and Latin America.
Commercial CD-R piracy spread in particular in Latin America, North America
and Southern Europe in 2001. South East Asia, and, to a lesser extent Eastern
Europe, are the predominant centres of large-scale factory-pressed pirate
music CDs.
These are the findings of the annual review of global music piracy released
today by IFPI, the organisation representing the recording industry worldwide.
Commenting on IFPI's Music Piracy Report 2002, Jay Berman, IFPI Chairman and
CEO said: "Piracy is sometimes and mistakenly called a 'victimless crime'.
It is not. The economic losses due to piracy are enormous and they are felt
throughout the music value chain. Piracy also nurtures organised crime across
the world, and it stunts investment, growth and jobs.
"The global recording industry is responding to this problem but it critically
needs help from governments. We need proper laws and above all effective
enforcement of those laws. It is time for governments to prove, with tough
actions and not just words, that copyright piracy has no place in the
development of modern economies."
Rick Dobbis, President of Sony Music International, said: "While piracy is a
global issue that affects both artists and record companies, it's important to
note that most of the real pain is felt locally by the economies of the
individual countries where the pirate products are manufactured and sold.
"Tolerance of piracy fosters lawlessness and tax evasion. Some of the hardest
hit victims of this growing problem are local economies. Owners of local
record stores, CD plant workers, marketing, promotion and distribution people,
and workers from every aspect of the complex business of making and
distributing music are all affected. As their earning power is diminished,
local governments are robbed of an important part of their tax base, and local
economies are placed in jeopardy. I join IFPI in asking local, regional and
national governments from around the world to give their law enforcement
agencies the resources and support they need to address this very serious
issue."
Piracy Report 2002 - Key Figures and Trends
- An estimated total of 1.9 billion pirate recordings, including discs
and cassettes, was sold in 2001 (up from 1.8 billion in 2000). This means
that two in every five recordings sold worldwide is an illegal copy.
- Pirate disc sales rose 48% from 640 million units in 2000 to 950
million units in 2001. Within that total, pirate CD-R disc sales tripled to
450 million units while factory-manufactured discs rose slightly to 500
million units, compared to 475 million in 2000.
- The increase in the value of the music pirate market (up from US$4.2
billion in 2000 to US$4.3 billion in 2001) was limited by sharply falling
prices of pirate CD-R discs. The report values the illegal market at pirate
prices and does not estimate losses to the industry, which are far greater
than $US4.3 billion.
- Illegal music sales outnumber legal sales in 25 countries -
predominantly developing markets - compared to 21 in 2000 and 19 in 1999.
- Countries in the spotlight where piracy is at a rate of over 25% and
notably worsening include: Brazil, Central America, Czech Republic, Slovakia,
Spain, Thailand and Russia. Ukraine, where the US has imposed sanctions over
the failure to effectively regulate optical disc plants, remains a largely
pirate market, and is also still a main distribution point for pirate CDs.
- The top five priority countries in terms of domestic piracy levels
are: China (90%), Russia (65%), Brazil (55%), Indonesia (85%) and Mexico
(60%).
- South Asia remains the hub of pirate CD manufacturing - the region
provides seven of the top ten disc manufacturing countries. Chronic
overcapacity is driving the increase in pirate production.
- In the USA CD-R piracy increased significantly in 2001: 2.8 million
pirate CD-R discs were seized, up from 1.6 million in 2000.
The Industry Response
In 2001 IFPI completed the formation of its 50-strong global
anti-piracy network, which works alongside another 250 industry investigators
employed by the organisation's affiliated national associations.
- Assisted by IFPI and national affiliates, enforcement authorities
worldwide seized ten million CD-R discs - three times more than in 2001 - 19
million blank CD-Rs (up from less than 1 million) and more than 45 million
copies of counterfeit CD artwork.
- Seizures of blank CD-Rs are increasing in 2002. Three huge seizures
of blank CD-Rs in Mexico (10m), Paraguay (12m) and Spain (2m) netted 24
million units.
- Twice as many CD production lines (42) were de-commissioned in 2001 as
in previous year, eliminating CD production capacity equivalent to the size of
the market of the UK. The raids were mainly in Indonesia, Philippines and
Malaysia.
- Litigation by IFPI against CD plants and distributors infringing
copyright in 2001 resulted in ten financial settlements, taking IFPI's total
revenues for settlements to US$5 million over the past four years.
The Call To Governments
The fight against piracy is critically dependent on support from governments,
judiciaries and law enforcement authorities. Enforcement must treat
intellectual property infringement for the serious crime it is; pirates who
make a living by stealing other people's work must face deterrent penalties
and if necessary go to jail. Governments must stop their countries becoming
safe havens for pirates by effectively regulating their CD production plants.
The Recording Industry's Four Key Priorities
- Copyright laws in line with international standards.
- Optical disc regulations to control pirate CD manufacturing,
particularly where production capacity far outstrips demand, including
compulsory use of identifiers such as the Source Identification (SID) Code.
The priority countries for effective plants licensing laws are Russia,
Indonesia, Thailand, India, Poland and the Philippines, Ukraine, Taiwan and
Malaysia.
- Proactive and efficient enforcement by police and customs.
- Aggressive prosecution of crimes within judicial systems, including
deterrent sentencing.
For further information contact Adrian Strain or Fiona Harley, IFPI Communications, tel: +44 207 878 7900.