The great rock and roll swindle

Piracy is the greatest threat facing the music industry today. That’s according to the International Federation of the Phonographic Industry (IFPI), the organisation that represents the international recording industry worldwide. According to estimates, one in three CDs sold worldwide are now counterfeit – and the problem is getting worse. The value of the pirate market was estimated at $US4.6 billion in 2002, an increase of 7% on 2001. This estimate is based only on the prices of pirate products sold – actual losses to the recording industry are substantially greater. The global pirate music market is now bigger than any individual national legitimate music market except for the USA and Japan.

A recent BBC report stated bluntly that music piracy might just be the “biggest criminal activity” in the world today.
“Can many people claim they have never taped a few of their favourite singles onto a cassette, downloaded music onto their computer, or burned a CD?” the report asked.
To be fair to the genuine music fan who only copies or burns a CD that they have already purchased, purely for their own personal use, the term “piracy” is generally used to describe the deliberate infringement of copyright on a commercial scale. In relation to the music industry, it refers to unauthorised copying of an original recording for commercial gain without the consent of the rights owner.
Pirate copies are often home-made compilations, such as the “greatest hits” of a specific artist, or a collection of a specific genre, such as dance or reggae. Counterfeits are copied and packaged to resemble the original as closely as possible. The original producer’s trademarks and logos are reproduced in order to mislead the consumer into believing that they are buying an original product. Bootlegs are the unauthorised recordings of live or broadcast performances which are duplicated and sold – often at a premium price – without the permission of the artist, composer or record company.

Internet Piracy
One of the growing areas of piracy involves copying using CD-Rs. CD-R piracy is where albums are created using CD burning computer software and then sold to consumers. It dominates in Latin America and Southern Europe, and is growing rapidly in Eastern Europe. The CD-R format is a serious threat as it allows mass pirate production, using cheap high-speed burners that can be stacked in a lab, office or garage and easily dispersed to avoid detection.
The victims of music piracy include the artists and bands whose creativity goes unrewarded, governments who lose millions in tax revenues, economies that are deprived of new investment and ultimately consumers who are being sold sub-standard product.
“We’re into a whole new world,” says David Stark of Songlink International, the premier worldwide forum for songwriters, artists and publishers. “People just want the songs for free these days. They don’t think about what it means to the person who wrote the music and whose work is being stolen by millions of people around the world.”
IFPI and its affiliated bodies in nearly 50 countries including Ireland now devote a substantial amount of time and resources to fighting music piracy in all its forms. But crucially they depend on the support of governments and public authorities such as police, customs, prosecutors and the judiciary.
In order to highlight the piracy problem the IFPI has taken the unusual step of publishing a top ten list of the worst offenders. Not surprisingly, countries such as Brazil, China, Mexico, Poland, Taiwan , Ukraine, Russia and Thailand are all on it.

Counterfeit CDs
In China, 90% of CDs are fake, despite the country’s membership of the World Trade Organisation. And former communist countries, where the concept of intellectual property is relatively new, usually have a thriving black market in counterfeit CDs. However, they are not the only offenders and piracy is rife in countries like Spain where piracy rates have risen dramatically from approximately 5% in 1998 to 25% in 2002.
In Ireland the situation, while not as bad as in some countries, is serious enough to raise significant concerns among the music industry and government bodies.
“A significant proportion of our major artists would be affected by piracy,” says Keith Johnson of the Irish Music Rights Organisation (IMRO). “If the smaller members start to lose out due to downloading of their material or through unauthorised copying it could mean they have to give up the business altogether.”
Maura Eaton, CEO of the Music Board of Ireland, which acts as a forum for the music industry, agrees with this assessment. “Sales of CDs by Irish artists account for 26% of the domestic market,” she says. “Income from recordings is the most significant source of income for established artists. Buying pirated CDs deprives Irish artists of their livelihood.”
The Irish Recorded Music Association represents the Irish record industry, promoting and protecting the interests of its members who are drawn from the international and indigenous record companies operating in Ireland. According to Sean Murtagh who heads up IRMA’s Anti-Piracy Operation, piracy is a growing problem in Ireland.
“There has been a substantial drop in music sales over the last year,” he says. “The figure for 2002 is down 7%. There is also a substantial decline in singles sales. There’s plenty of anecdotal evidence that people are downloading tracks or buying counterfeit copies. Virtually every home PC now comes equipped with a CD burner and we’re now seeing kids in the school yard passing around lists of record collections and taking orders – for cash.
“One of the scary figures we came across recently was that in 2001, 8 million blank CD-Rs were imported here quite legally. In 2002 the figure rose to 17 million. If only half of those were being used to copy music it would be a massive problem.”

Fighting back
But the industry is fighting back and dealing with the problem much more aggressively than they have done in the past, as Murtagh explains
“We’re doing lots of thing to stop it – we’re certainly not sitting on our hands,” he says. “We have our own anti-piracy unit, we employ private investigators, we obtain warrants, we enter premises and we take people to court on a regular basis. There are cases pending and we’re trying to educate judges that this is a serious crime which affects of lot of people. Slowly but surely we’re getting them to realise that this is the case and the penalties have become quite serious for anyone convicted.”
IRMA also has an ongoing Internet Piracy programme, as Murtagh explains. “We identify Irish hosted websites who are offering illegal downloads for example. We also target colleges and universities, where students are uploading and downloading music illegally. We also have a fairly extensive information campaign. We’re spending a lot of money on awareness of the problem and we are seeing results.”
IRMA’s anti-piracy initiative also involves policing outlets, such as markets where pirate music is traditionally sold.
“We would visit all the potential hot spots where people sell fake stuff at weekends, especially in the run up to Christmas. We would have search warrants already in place in advance – all we have to do is tell the Gardai and they will go in.”
In Ireland, as in other territories, piracy nurtures organised crime and very often the money that is paid for pirate CDs is channelled into the drugs trade, money laundering or other forms of serious organised criminal activity. Organised crime and paramilitary gangs on both sides of the border are behind much of piracy in this country according to Murtagh.
“Film and music piracy is one of their biggest earners and some people are getting very rich out of it,” he says “We are not a political organisation – our job is to protect the industry. If we don’t do it we won’t have an industry.”`
Two-pronged attack
While applauding the raids IRMA have been carrying out, RMG Chart M.D. Peter Kenny believes that the attack against piracy must be two-pronged.
“They’re going to be out there in the run-up to Christmas monitoring markets and things which is great, but come the New Year I’d like to see them running an awareness campaign targeting music fans who don’t know the harm they’re doing burning CDs or buying pirate producet. Do they realise, for instance, that record labels rely on the money they make from their big sellers to sign and develop new acts? The more piracy there is, the less chance there is of a Thrills or a Damien Rice breaking through.
“I’d also like to address parents and say, ‘You wouldn’t let your kid walk into HMV and stick a CD in their pocket without paying, so why let them download an album from the internet?’ It’s a different method but it’s still stealing.”