NMPA_International_Survey_12th_Edition

12th 

e d i t i o n 

NATIONAL 

MUSIC PUBLISHERS’ 

ASSOCIATION, INC. 

& THE HARRY FOX 

AGENCY, INC.

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PREFACE 

CHART 1: THE REPORTING UNIVERSE 

EXECUTIVE SUMMARY 

TABLE 1: MUSIC PUBLISHING REVENUES 

TABLE 2: EXCHANGE RATES - TOP TEN TERRITORIES 

TABLE 3: MUSIC PUBLISHING REVENUES IN THE MAJOR TERRITORIES OF SOUTHEAST ASIA 

TABLE 4: MUSIC PUBLISHING REVENUES IN THE MAJOR TERRITORIES OF EASTERN EUROPE 

TABLE 5: MUSIC PUBLISHING REVENUES IN THE MAJOR TERRITORIES OF LATIN AMERICA 

CHART 2: 2001 TOTAL REVENUE BY TYPE OF ROYALTY INCOME 

CHART 3: 2001 MUSIC INDUSTRY ROYALTIES, THE LEADING COUNTRIES 

TABLE 6: MASTER SURVEY DATA 

TABLE 7: FLAT EXCHANGE RATES 

CHART 4: 2001 MUSIC INDUSTRY ROYALTIES, ALL RESPONDENTS 

CHART 4A: HIGHLIGHT OF 21 DEVELOPING MARKETS 

RESULTS OF SURVEY 

CHART 5: 2001 PERFORMANCE-BASED INCOME 

CHART 6: 2001 REPRODUCTION-BASED INCOME 

CHART 7: 2001 DISTRIBUTION-BASED INCOME 

CHART 8: 2001 COMPARISON BY REGION 

TABLE 8: DETERMINATION OF MECHANICAL ROYALTIES 

TABLE 9: EXCHANGE RATES OF SURVEYED COUNTRIES 

INTERNATIONAL YEAR IN REVIEW 2002 

COUNTRY PROFILE: MEXICO 

YEAR IN REVIEW: NMPA AND THE MUSIC PUBLISHING INDUSTRY 

APPENDIX A: CATEGORIZATION OF MUSIC PUBLISHING REVENUES 

APPENDIX B: INTERNATIONAL INVOLVEMENT 

APPENDIX C: U.K., JAPAN, GERMANY, FRANCE, CANADA, ITALY AND SPAIN UPDATES 

APPENDIX D: GLOSSARY OF TERMS 

NMPA: A BRIEF HISTORY

Preface 

The National Music Publishers’ Association, Inc. is pleased to present its twelfth 

annual International Survey of Music Publishing Revenues. This report offers 

publishing income from 46 territories for the year 2001. 

Following a 6.7% increase in 2000, total global publishing revenues declined in 

2001 by 4% to $6.6 billion. Based on flat exchange rates,when comparisons are made 

between 2000 and 2001, publishing revenues decreased by 8% in 2001 to just under 

$7.5 billion. 

Continuing to lead the way was the performance-based revenue sector, which 

posted a 3.2% gain to nearly $3.18 billion.While global income from the live performance and the public performance 

of recorded music fell by slightly more than 1%, revenues from the use of music on television and on radio rose by 

5.7% and 7.5%, respectively. 

Meanwhile, reproduction-based income decreased by 11.6% to $2.42 billion.The declines were fueled by losses in 

phono-mechanicals (down 13.1%) and synchronization revenue (down 7.6%). 

As the global music market continues to evolve, the performance of the U.S. dollar against foreign currencies 

remains an important yardstick. For that reason, we are again including territory income totals in European Currency 

Units (ECU). 

Reasons for the losses are varied: fewer territories participated in this year’s report,and 2000’s totals were impacted 

NMPA INTERNATIONAL SURVEY TWELTH EDITION PREFACE 

by an extraordinary gain from a successful lawsuit filed by the Harry Fox Agency against Sony and MP3. However, it 

must be added that the worldwide declines suffered by the recording industry over the past few years have had a 

significant impact on publishing revenues as well. 

Piracy has continued to spread like wildfire throughout the global recording industry, with many key territories 

watching their legitimate CD sales suffer serious declines in the face of increased unauthorized downloading and CD 

burning. 

Economic uncertainty also affected much of the world in 2001, and continues to this day.Without a base of consumer 

confidence,the worldwide music industry will likely continue to struggle in future months.In addition,ongoing 

economic and intellectual property protection troubles in such developing regions as Latin America and Southeast 

Asia are continuing to be felt on a global basis. 

However, some encouraging measures are being taken around the world, as outlined in portions of this report’s 

“International Year In Review”and “NMPA and the Music Publishing Industry”sections.Through lobbying efforts,increased 

law enforcement,and cooperation with the major players in cyberspace,it seems likely that solutions to various problems 

can be achieved. Lawmakers are still learning about the potential pitfalls in this area, and NMPA and other copyrightdirected 

associations have pledged to work with them to find adequate resolutions. 

2

The authorized availability of music on the Internet will be a victory for copyright owners, Internet services, and 

consumers alike.Achieving that goal is of vital importance to the entire global music business. 

In order to help our readers gain insight into the international dimensions of the music publishing industry,we highlight 

a particular territory in each edition of the Survey.In this volume,we take a look at Mexico,which currently ranks 

nineteenth in global publishing revenues. 

The NMPA Survey continues to gain interest and respect throughout the domestic and international music and 

intellectual property communities.We are, as always, grateful to all those organizations in participating territories for 

their continued support, and encourage all those who do not yet do so to join with us in presenting their regional 

information on this vital area of the global music industry. 

Edward P. Murphy 

President & CEO 

National Music Publishers’Association 

Chart 1 

THE REPORTING UNIVERSE, TOTAL ROYALTIES 2001 

The Netherlands 

2.7% 

Italy 

5.3% 

France 

8.3% 

Spain 

3.0% 

United Kingdom 

10.1% 

Canada 

2.1% 

Switzerland 

1.6% 

Japan 

11.5% 

Germany 

12.2% 

36 Other Territories 

14.0% 

USA 

29.3% 

3NMPA INTERNATIONAL SURVEY TWELTH EDITION PREFACE

Executive Summary 

This is the NMPA’s twelfth annual 

survey of music publishing revenues. 

It was produced with the help of colleagues in 

46 territories, who provided information about 

local music publishing revenues in 2001. 

NMPA INTERNATIONAL SURVEY TWELTH EDITION EXECUTIVE SUMMARY 

All together,the reporting territories collected $6.6 billion in 

royalty payments in 2001.This represents a decrease of 4% from 

the music revenues of 2000, due in part to an extraordinary 

gain in 2000 from a successful lawsuit filed by the Harry Fox 

Agency against Sony and MP3, and to a smaller number of 

reporting territories. 

The 4% decline in publishing revenues compares with a 

decrease in world soundcarrier sales of 5% to $33.7 billion in 

2001, as reported by the International Federation of the 

Phonographic Industry (IFPI). 

The music publishing revenues of the top five territories 

(U.S., Germany, Japan, U.K. and France) represent 71.3% of the 

overall total, down slightly from 71.6% in 2000. Revenue from 

the top 10 territories (including Italy, Spain, The Netherlands, 

Canada and Switzerland) accounted for 85.9% of the total in 

2001, down slightly from 86.5% in 2000. 

MUSIC PUBLISHING REVENUES 

1995 - 2001 ($M)* 

1995 (57) 6,208.7 ( +6.4%) 

1996 (51) 6,224.5 ( +0.3%) 

1997 (53) 6,157.1 ( -1.1%) 

1998 (54) 6,440.3 ( +4.6%) 

1999 (53) 6,429.4 (+2.0%) 

2000 (54) 6,877.3 (+6.7%) 

2001 (46) 6,626.8 (-4%) 

* The figures in parentheses in the second column 

are the number of reporting territories that year. 

The figures in parentheses in the fourth column 

are the percentage change from the previous year. 

Note: 2001 figures reflect a lower amount due 

to an extraordinary gain resulting from settlements 

with MP3 and Sony. 

Table 1 

4

Because survey details are reported to NMPA in U.S. dollars, they are subject to currency fluctuations. As can be 

seen from the table below of the changes in the value of the top ten countries surveyed, most of the currencies fell in 

value against the dollar. 

Table 2 

EXCHANGE RATES - TOP TEN TERRITORIES 

Country Exchange Rate Exchange Rate Change 

12/31/01 12/31/00 

U.S. 1.00000 1.00000 0% 

*Germany 0.88600 1.06200 -17% 

Japan 0.00762 0.00792 -4% 

UK 1.45150 1.49350 -3% 

*France 0.88600 1.06200 -17% 

*Italy 0.88600 1.06200 -17% 

*Spain 0.88600 1.06200 -17% 

*The Netherlands 0.88600 1.06200 -17% 

Canada 0.62870 0.66760 -6% 

Switzerland 0.59766 0.62090 -4% 

* Note that prior year currencies were converted to euros to reflect the countries changes to the euro for 2001. 

We have included a table of the music publishing revenues of all the territories surveyed at flat exchange rates.This 

table can be found on page 10. Flat, also known as fixed, exchange rates are the ratio of units of exchange between 

two currencies set at a constant figure. Based on flat exchange rates, global publishing revenues fell by 8 % in 2001, to 

$7.52 billion. 

Following an 8% increase in 2000, the Asian region remained steady in 2001. Music publishing revenues for 

Southeast Asia (excluding Japan) totaled $50.0 million in 2001, up 4% from the previous year. China posted a major 

gain of 101% over 2000, while South Korea and Malaysia also recorded increases. 

Table 3 

MUSIC PUBLISHING REVENUES IN THE MAJOR TERRITORIES OF SOUTHEAST ASIA 

1999 - 2001 ($M) 

Country 1999 2000 2001 %Change 

China 1.35 1.69 3.39 101% 

Hong Kong 15.12 17.02 15.66 -8.0% 

Indonesia 0.73 0.90 n/a n/a 

Philippines 0.42 0.351 0.349 -1% 

Singapore 3.70 3.61 3.80 5% 

South Korea 20.31 20.61 24.11 17% 

Taiwan 0.89 1.59 n/a n/a 

Malaysia 2.23 2.51 2.75 9.6% 

TOTAL 44.75 48.28 50.06 4% 

* The Indian sub-continent and Japan are excluded from this table. 

5NMPA INTERNATIONAL SURVEY TWELTH EDITION EXECUTIVE SUMMARY

Following a solid 14% growth in revenues for 2000,Eastern Europe posted an impressive 60% gain in 2001,to $150.91 

million.Improvements in accurate reporting,as well as the growing security of legitimate concerns,helped push figures 

for such territories as the Russian Federation and Croatia into triple-digit growth, by 202% and 674%, respectively. 

Table 4 

MUSIC PUBLISHING REVENUES IN THE MAJOR TERRITORIES OF EASTERN EUROPE 

1998 - 2001 ($M) 

Country 1998 1999 %Change 2000 %Change 2001 %Change 

Czech Republic 12.44 10.46 52% 9.92 -16% 10.59 7% 

Croatia 4.61 5.11 291% 6.10 11% 47.17 674% 

Hungary 17.9 19.19 14% 20.98 7% 24.92 19% 

Poland 32.44 40.44 66% 43.43 25% 49.03 13% 

Albania n/a n/a n/a 4.31 n/a n/a n/a 

Slovak Republic 1.45 3.33 -10% 3.09 130% 3.84 24% 

Russian Federation 1.54 2.60 n/a 3.53 69% 10.65 202% 

Romania 1.27 0.95 388% 2.27 -25% 2.66 18% 

Lithuania 0.84 0.89 75% 0.88 6% 0.96 9% 

Yugoslavia n/a n/a n/a 0.1 n/a 1.10 1638% 

TOTAL 72.49 82.98 14% 94.51 14% 150.92 60% 

* Yugoslavia and Albania are excluded from this table, as they reported only negligible income for 2000 and 2001. 


Piracy, combined with political and economic uncertainty, continue to make headlines in Latin America, with the 

region posting an 18% decline in value to $200.4 million, following a 7% increase in 2000. Mexico suffered a 41% loss, 

while Argentina and Chile also reported double-digit decreases. The one bright spot in the region was Brazil, which 

posted a 14% increase after several years of decline. 

Table 5 

MUSIC PUBLISHING REVENUES IN THE MAJOR TERRITORIES OF LATIN AMERICA 

1998 - 2001 ($M) 

Country 1998 1999 %Change 2000 %Change 2001 %Change 

Argentina 116.41 107.90 13% 102.99 -7% 89.47 -13% 

Brazil 58.16 45.40 -16% 45.16 -22% 51.71 14% 

Chile 6.22 6.15 4% 7.93 -1% 6.75 -15% 

Mexico 46.16 56.92 33% 77.12 23% 45.30 -41% 

Peru 2.98 2.14 48% n/a -28% n/a n/a 

Uruguay 7.1 3.04 41% 2.66 -57% n/a n/a 

Venezuela n/a 4.92 n/a 7.50 n/a 7.18 -4% 

TOTAL 237.03 226.47 -4% 243.37 7% 200.41 -18% 

6

Chart 2 

2001 TOTAL REVENUE BY TYPE OF ROYALTY INCOME 

Distribution 

Based Income 

11% 

Interest Investment Income 

2% 

Miscellaneous Income 

1% 

Reproduction 

Based Income 

40% 

Performance 

Based Income 

46% 

Chart 3 

2000 

1500 

1000 

500 

0 

2001 MUSIC INDUSTRY ROYALTIES, THE LEADING COUNTRIES ($ MILLIONS) 

USA 

Germany 

Japan 

United 

Kingdom 

France 

Italy 

Miscellaneous Income 

Interest Investment Income 

Distribution Based Income 

Reproduction Based Income 

Performance Based Income 

Spain 

The 

Netherlands 

Canada 

Switzerland 

36 Other 

Territories 

7NMPA INTERNATIONAL SURVEY TWELTH EDITION EXECUTIVE SUMMARY

Table 6 

Master Survey Data 

2001 INTERNATIONAL SURVEY OF MUSIC PUBLISHING REVENUES 

Performance-Based Income 

Reproduction-Based Income 

Country Radio TV/ Live Total Phono Synchronization Private Reprint of 

Cable/ Performance Mechanical Copy Printed 

Satellite & Recorded Music 

NMPA INTERNATIONAL SURVEY TWELTH EDITION EXECUTIVE SUMMARY • MASTER SURVEY DATA 

8 

USA 317.17 381.09 216.40 914.66 552.70 102.31 0.00 n/a 

Germany 41.66 84.18 179.44 305.28 160.67 144.61 13.54 0.00 

Japan 124.70 14.16 152.30 291.17 267.86 74.93 7.95 0.00 

United Kingdom 64.15 61.31 134.65 260.11 271.00 50.74 0.00 0.00 

France 26.91 125.40 168.48 320.80 96.04 50.00 20.54 0.00 

Italy 12.16 76.14 168.71 257.01 51.42 20.52 1.98 0.00 

Spain 9.24 42.89 18.37 70.51 51.27 56.48 6.69 0.00 

The Netherlands 5.72 35.14 37.16 78.03 18.36 31.06 3.79 0.00 

Canada 20.85 39.42 11.13 71.40 35.98 8.42 0.00 0.00 

Switzerland 14.35 18.12 17.61 50.08 4.78 18.26 1.54 0.13 

Australia/N.Z. 11.38 18.28 10.62 40.28 39.43 16.03 0.00 1.59 

Argentina 15.47 46.40 0.00 61.86 17.97 0.00 0.00 0.00 

Belgium 12.98 10.39 32.65 56.03 24.61 0.76 1.28 0.00 

Sweden 5.91 12.95 14.03 32.89 21.40 0.00 0.00 0.00 

Denmark 8.42 25.26 8.42 42.10 17.35 6.80 0.00 0.00 

Brazil 7.98 16.92 26.80 51.71 0.00 0.00 0.00 0.00 

Poland 7.99 19.84 5.91 33.74 7.68 0.03 0.97 0.00 

Republic of Croatia 17.73 14.33 0.82 32.87 2.32 11.82 0.00 0.00 

Mexico 1.64 7.08 4.17 12.89 28.40 3.98 0.00 0.00 

Finland 8.73 7.91 9.58 26.21 6.94 0.47 0.92 0.00 

Norway 7.74 8.13 1.91 17.79 11.57 0.69 0.00 0.00 

Austria 0.00 0.00 0.00 0.00 8.36 5.31 2.11 0.00 

Portugal 0.65 8.66 6.15 15.46 10.83 1.70 0.00 0.00 

Greece 6.43 0.00 12.87 19.30 5.93 1.88 0.41 0.00 

Hungary 1.10 14.34 1.64 17.09 2.33 0.87 2.60 0.00 

South Korea 2.94 4.09 12.71 19.74 3.46 0.62 0.12 0.00 

Ireland 3.53 8.54 9.00 21.08 0.00 0.00 0.00 0.00 

Hong Kong 1.86 6.02 6.43 14.30 0.21 0.03 0.00 0.00 

Russian Federation 1.26 2.95 6.14 10.35 0.00 0.30 0.00 0.00 

Czech Republic 1.24 3.72 1.24 6.20 2.92 1.44 0.00 0.04 

Venezuela 0.50 3.74 1.52 5.76 0.99 0.00 0.00 0.00 

Chile 1.49 4.48 0.00 5.98 0.30 0.00 0.00 0.00 

Israel 0.00 0.00 0.00 0.00 3.63 3.05 0.00 0.00 

South Africa 0.00 0.00 0.00 0.00 3.18 1.86 0.00 0.00 

Slovak Republic 0.45 1.34 0.52 2.31 0.21 0.01 0.91 0.00 

Singapore 1.23 2.47 0.00 3.70 0.02 0.00 0.00 0.00 

China 0.00 0.00 1.08 1.08 0.71 1.41 0.00 0.00 

Turkey 0.52 1.23 0.07 1.82 1.49 0.00 0.00 0.00 

Malaysia 1.32 1.32 0.00 2.65 0.00 0.00 0.00 0.00 

Romania 0.00 0.00 0.00 0.00 0.08 2.55 0.04 0.00 

Yugoslavia 0.00 0.68 0.11 0.79 0.03 0.00 0.00 0.00 

Lithuania 0.08 0.64 0.16 0.88 0.05 0.01 0.00 0.00 

Iceland 0.00 0.00 0.00 0.00 0.58 0.00 0.00 0.00 

Philippines 0.11 0.10 0.02 0.24 0.03 0.06 0.00 0.00 

Egypt 0.00 0.00 0.00 0.00 0.11 0.20 0.00 0.00 

Zimbabwe 0.12 0.14 0.00 0.27 0.00 0.00 0.00 0.00 

$767.73 $1,129.81 $1,278.83 $3,176.37 $1,733.21 $619.20 $65.38 $1.76

Distribution-Based Income 

Total Sale of Rental/ Total Interest Misc. 2001 In EUR 

Printed Public Investment Grand Total g 

Music Lending Income US$ 

655.01 331.85 n/a 331.85 37.10 1.80 1940.42 1719.21 

318.81 147.19 6.53 153.72 30.55 0.00 808.36 716.21 

350.74 20.85 28.79 49.64 0.50 67.60 759.64 673.04 

321.75 72.65 0.00 72.65 8.05 7.17 669.73 593.38 

166.58 61.17 0.00 61.17 0.00 0.00 548.55 486.02 

73.93 22.90 0.00 22.90 0.00 0.00 353.83 313.49 

114.43 0.00 2.15 2.15 9.68 0.00 196.77 174.34 

53.21 29.22 0.00 29.22 16.12 0.00 176.57 156.44 

44.39 18.84 0.00 18.84 4.53 0.00 139.17 123.30 

24.71 25.76 0.07 25.83 5.01 0.00 105.63 93.59 

57.05 0.00 0.00 0.00 0.32 0.99 98.64 87.40 

17.97 0.00 0.00 0.00 9.63 0.00 89.47 79.27 

26.65 0.00 0.00 0.00 0.00 0.00 82.68 73.25 

21.40 20.95 0.00 20.95 2.72 1.48 79.44 70.38 

24.15 0.00 0.00 0.00 4.86 0.00 71.12 63.01 

0.00 0.00 0.00 0.00 0.00 0.00 51.71 45.81 

8.68 0.00 0.07 0.07 6.50 0.03 49.03 43.44 

14.14 0.17 0.00 0.17 0.00 0.00 47.17 41.79 

32.38 0.03 0.00 0.03 0.00 0.00 45.30 40.14 

8.33 4.94 0.00 4.94 1.16 0.24 40.88 36.22 

12.25 0.00 0.00 0.00 1.74 0.17 31.95 28.31 

15.78 10.54 0.04 10.58 1.73 0.65 28.73 25.46 

12.54 0.00 0.00 0.00 0.00 0.00 27.99 24.80 

8.22 0.00 0.00 0.00 0.00 0.00 27.52 24.38 

5.80 0.00 0.01 0.01 2.02 0.00 24.92 22.08 

4.20 0.17 0.01 0.17 0.00 0.00 24.11 21.36 

0.00 0.00 0.00 0.00 0.48 0.00 21.55 19.10 

0.24 0.00 0.00 0.00 0.65 0.46 15.66 13.87 

0.30 0.00 0.00 0.00 0.00 0.00 10.65 9.44 

4.39 0.00 0.00 0.00 0.00 0.00 10.59 9.39 

0.99 0.00 0.00 0.00 0.00 0.42 7.18 6.36 

0.30 0.00 0.00 0.00 0.48 0.00 6.75 5.98 

6.68 0.00 0.00 0.00 0.00 0.00 6.68 5.92 

5.04 0.00 0.00 0.00 0.00 0.00 5.04 4.46 

1.13 0.00 0.00 0.00 0.19 0.21 3.84 3.40 

0.02 0.00 0.00 0.00 0.08 0.00 3.80 3.37 

2.12 0.00 0.00 0.00 0.10 0.10 3.39 3.01 

1.49 0.00 0.00 0.00 0.00 0.00 3.32 2.94 

0.00 0.00 0.00 0.00 0.10 0.00 2.75 2.44 

2.66 0.00 0.00 0.00 0.00 0.00 2.66 2.36 

0.03 0.00 0.00 0.00 0.28 0.00 1.10 0.97 

0.05 0.00 0.00 0.00 0.02 0.01 0.96 0.85 

0.58 0.00 0.00 0.00 0.00 0.00 0.58 0.51 

0.09 0.00 0.00 0.00 0.02 0.01 0.35 0.31 

0.31 0.00 0.00 0.00 0.00 0.00 0.31 0.28 

0.00 0.00 0.00 0.00 0.02 0.00 0.29 0.26 

$2,419.55 $767.21 $37.66 $804.87 $144.64 $81.35 $6,626.78 $5,871.33 

9NMPA INTERNATIONAL SURVEY TWELTH EDITION EXECUTIVE SUMMARY • MASTER SURVEY DATA

Table 7 

Flat Exchange Rates 

2001 INTERNATIONAL SURVEY OF MUSIC PUBLISHING REVENUES 

Performance-Based Income 

Reproduction-Based 

Country Radio TV/ Live Total Phono Synchronization Private 

Cable/ Performance Mechanical Copy 

Satellite & Recorded 

NMPA INTERNATIONAL SURVEY TWELTH EDITION EXECUTIVE SUMMARY • FLAT EXCHANGE RATES 

10 

USA 317.17 381.09 216.40 914.66 552.70 102.31 0.00 

Japan 153.73 17.45 187.75 358.93 330.21 92.37 9.80 

Germany 47.02 95.01 202.53 344.56 181.34 163.21 15.28 

United Kingdom 68.39 65.35 143.53 277.27 288.89 54.09 0.00 

France 30.37 141.54 190.16 362.07 108.40 56.43 23.18 

Italy 13.72 85.93 190.42 290.07 58.04 23.16 2.24 

Spain 10.43 48.41 20.74 79.58 57.87 63.74 7.55 

The Netherlands 6.45 39.67 41.95 88.07 20.72 35.06 4.27 

Canada 24.32 45.98 12.98 83.27 40.76 9.55 0.00 

Switzerland 20.87 26.36 25.63 72.86 6.95 26.56 2.24 

Australia/N.Z. 15.93 25.59 14.88 56.40 46.80 19.02 0.00 

Brazil 18.27 38.73 61.34 118.34 0.00 0.00 0.00 

Sweden 9.38 20.57 22.28 52.23 32.56 0.00 0.00 

Denmark 12.81 38.43 12.81 64.05 26.40 10.35 0.00 

Belgium 14.65 11.73 36.86 63.24 27.78 0.85 1.45 

Argentina 15.46 46.39 0.00 61.85 17.97 0.00 0.00 

Poland 12.87 31.95 9.51 54.33 12.36 0.06 1.56 

Turkey 12.12 28.88 1.69 42.69 34.86 0.00 0.06 

Republic of Croatia 20.01 16.17 0.92 37.10 2.62 13.34 0.00 

Hungary 2.19 28.50 3.27 33.97 4.64 1.73 5.17 

Finland 9.85 8.93 10.81 29.59 10.56 0.53 1.04 

Mexico 1.64 7.08 4.17 12.89 28.40 3.98 0.00 

Greece 10.45 0.00 20.89 31.34 9.63 3.06 0.67 

South Korea 5.06 7.05 21.89 34.00 5.96 1.07 0.20 

Austria 0.00 0.00 0.00 0.00 12.89 8.19 3.25 

Norway 11.08 11.64 2.74 25.46 8.72 0.98 0.00 

Portugal 0.74 9.77 6.94 17.45 12.22 1.92 0.00 

Ireland 3.99 9.64 10.16 23.79 0.00 0.00 0.00 

South Africa 0.00 0.00 0.00 0.00 10.37 6.07 0.00 

Hong Kong 1.87 6.07 6.48 14.42 0.21 0.03 0.00 

Czech Republic 1.68 5.03 1.68 8.39 3.95 1.95 0.00 

Chile 2.31 6.93 0.00 9.24 0.47 0.00 0.00 

Israel 0.00 0.00 0.00 0.00 5.09 4.28 0.00 

Venezuela 0.54 4.03 1.64 6.21 1.07 0.00 0.00 

Slovak Republic 0.74 2.19 0.85 3.78 0.35 0.02 1.48 

Singapore 1.61 3.22 0.00 4.83 0.03 0.00 0.00 

Malaysia 1.98 1.98 0.00 3.96 0.00 0.00 0.00 

Yugoslavia 0.00 2.28 0.36 2.64 0.08 0.00 0.00 

China 0.00 0.00 1.07 1.07 0.70 1.40 0.00 

Romania 0.00 0.00 0.00 0.00 0.09 2.87 0.05 

Lithuania 0.08 0.63 0.16 0.88 0.05 0.01 0.00 

Iceland 0.00 0.00 0.00 0.00 0.88 0.00 0.00 

Philippines 0.22 0.20 0.05 0.46 0.07 0.12 0.00 

Egypt 0.00 0.00 0.00 0.00 0.15 0.27 0.00 

Zimbabwe 0.13 0.15 0.00 0.27 0.00 0.00 0.00 

Russian Federation 0.01 0.02 0.04 0.07 0.00 0.00 0.00 

880.13 1,320.57 1,485.56 3,686.27 1,963.79 708.58 79.49

Income 

Distribution-Based Income 

Reprint of Total Sale Rental/ Total Interest Misc. 2001 In EUR 

Printed Music of Printed Public Investment Grand Total g 

Music Lending Income US$ 

0.00 655.01 331.85 0.00 331.85 37.10 1.80 1940.42 1719.21 

0.00 432.37 20.85 35.49 56.34 0.62 83.33 931.60 825.40 

0.00 359.84 147.19 7.37 154.56 34.48 0.00 893.44 791.58 

0.00 342.98 72.65 0.00 72.65 8.58 7.65 709.13 628.29 

0.00 188.02 61.17 0.00 61.17 0.00 0.00 611.26 541.58 

0.00 83.44 22.90 0.00 22.90 0.00 0.00 396.41 351.22 

0.00 129.16 0.00 2.42 2.42 10.92 0.00 222.08 196.77 

0.00 60.05 29.22 0.00 29.22 18.19 0.00 195.53 173.24 

0.00 50.31 18.84 0.00 18.84 5.27 0.00 157.68 139.71 

0.19 35.95 25.76 0.10 25.86 7.29 0.00 141.96 125.78 

1.89 67.71 0.00 0.00 0.00 0.38 1.39 125.88 111.53 

0.00 0.00 0.00 0.00 0.00 0.00 0.00 118.34 104.85 

0.00 32.56 20.95 0.00 20.95 4.32 2.36 112.41 99.60 

0.00 36.75 0.00 0.00 0.00 7.40 0.00 108.20 95.86 

0.00 30.08 0.00 0.00 0.00 0.00 0.00 93.32 82.68 

0.00 17.97 0.00 0.00 0.00 9.63 0.00 89.45 79.25 

0.00 13.98 0.00 0.11 0.11 10.47 0.06 78.94 69.94 

0.00 34.92 0.00 0.00 0.00 0.00 0.00 77.61 68.76 

0.00 15.96 0.17 0.00 0.17 0.00 0.00 53.22 47.15 

0.00 11.53 0.00 0.02 0.02 4.01 0.00 49.53 43.88 

0.00 12.13 4.94 0.00 4.94 1.31 0.27 48.23 42.73 

0.00 32.38 0.03 0.00 0.03 0.00 0.00 45.30 40.14 

0.00 13.35 0.00 0.00 0.00 0.00 0.00 44.69 39.60 

0.00 7.23 0.17 0.01 0.17 0.00 0.00 41.41 36.69 

0.00 24.33 10.04 0.06 10.60 2.66 1.00 38.60 34.20 

0.00 9.70 0.00 0.00 0.00 2.49 0.24 37.90 33.58 

0.00 14.15 0.00 0.00 0.00 0.00 0.00 31.59 27.99 

0.00 0.00 0.00 0.00 0.00 0.54 0.00 24.33 21.55 

0.00 16.44 0.00 0.00 0.00 0.00 0.00 16.44 14.57 

0.00 0.24 0.00 0.00 0.00 0.65 0.47 15.78 13.98 

0.05 5.95 0.00 0.00 0.00 0.00 0.00 14.33 12.70 

0.00 0.47 0.00 0.00 0.00 0.73 0.00 10.44 9.25 

0.00 9.37 0.00 0.00 0.00 0.00 0.00 9.37 8.30 

0.00 1.07 0.00 0.00 0.00 0.00 0.45 7.73 6.85 

0.00 1.85 0.00 0.00 0.00 0.32 0.34 6.29 5.57 

0.00 0.03 0.00 0.00 0.00 0.11 0.00 4.97 4.40 

0.00 0.00 0.00 0.00 0.00 0.15 0.00 4.12 3.65 

0.00 0.08 0.00 0.00 0.00 0.95 0.00 3.67 3.26 

0.00 2.10 0.00 0.00 0.00 0.10 0.10 3.37 2.99 

0.00 3.01 0.00 0.00 0.00 0.00 0.00 3.01 2.66 

0.00 0.05 0.00 0.00 0.00 0.02 0.01 0.95 0.85 

0.00 0.88 0.00 0.00 0.00 0.00 0.00 0.88 0.78 

0.00 0.18 0.00 0.00 0.00 0.03 0.01 0.69 0.61 

0.00 0.42 0.00 0.00 0.00 0.00 0.00 0.42 0.37 

0.00 0.00 0.00 0.00 0.00 0.02 0.00 0.30 0.26 

0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.07 0.06 

2.13 2,753.99 767.21 45.58 812.79 168.75 99.48 7,521.28 6,663.86 

NMPA INTERNATIONAL SURVEY TWELTH EDITION EXECUTIVE SUMMARY • FLAT EXCHANGE RATES 

11

Chart 4 

22 Other 

Countries 

Ireland 

Hungary 

Greece 

Portugal 

Austria 

Norway 

Finland 

Mexico 

Poland 

Brazil 

Denmark 

Sweden 

Belgium 

Argentina 

Australia/N.Z. 

Switzerland 

Canada 

The Netherlands 

Spain 

Italy 

France 

United Kingdom 

Japan 

Germany 

USA 

2001 Music Industry Royalities, All Respondents ($ Millions) 

158 

22 

24 

28 

28 

29 

32 

41 

45 

49 

52 

71 

79 

83 

89 

99 

106 

139 

177 

197 

354 

549 

670 

760 

808 

1,940 

0 500 1000 1500 2000 


Chart 4A 

Zimbabwe 

Egypt 

Philippines 

Iceland 

Lithuania 

Yugoslavia 

Romania 

Malaysia 

Turkey 

China 

Singapore 

Slovak Republic 

South Africa 

Israel 

Chile 

Venezuela 

Czech Republic 

Russian Federation 

Hong Kong 

South Korea 

Republic of Croatia 

Highlight of 21 Developing Markets ($ Thousands) 

290 

315 

349 

578 

957 

1,099 

2,665 

2,750 

3,317 

3,394 

3,803 

3,841 

5,036 

6,685 

6,752 

7,178 

10,595 

10,650 

15,658 

24,917 

47,171 

0 10000 20000 30000 40000 50000 

12

Results of Survey 

PERFORMANCE-BASED INCOME 

The reported performance-based income in the world increased by 3.2% over 2000, to $3.18 billion. On a flat 

exchange rate, the sector recorded a 2% decrease to $3.69 billion. 

Within the performance sector,the reported income from live performance and the public performance of recorded 

music was the largest element,accounting for 40% of performance-based income.The live performance/performance of 

recorded music sub-sector declined in revenue by just over 1% in 2001,to $1.28 billion.Revenues from the use of music 

on television rose by 5.7%,to $1.13 billion,while revenues from radio increased by 7.5% to nearly $768 million. 

Among the largest national markets for performance-based income,the U.K.moved up from sixth to fifth place,with 

2000’s fifth-place finisher,Italy,dropping to sixth.The Netherlands and Canada similarly swapped the seventh and eighth 

positions. 

Thirteen of the leading twenty markets saw the music publishing industry derive greater income from public performance 

than from reproduction.These were,by rank,the United States (where performance income was 47% of the 

total), France (59%), Italy (73%), the Netherlands (44%), Canada (54%), Switzerland (47%), Argentina (69%), Belgium 

(68%),Sweden (42%),Denmark (59%),Poland (69%),the Republic of Croatia (70%),and Finland (64%).It is important 

to note that reproduction-based income figures for Brazil,the 12th ranked country in performance,were not available. 

In a number of territories,significant gains in performance income was reported.The U.S.recorded an increase over 

2000’s figures of nearly 12.7% to $914.7 million; Denmark posted a 30.2% increase to $42.1 million; Brazil rose by 15% 

to $51.8 million; and the Republic of Croatia ballooned by nearly 867% to $32.9 million. However, significant losses 

were also recorded: Canada fell by nearly 26% to $71.4 million, and Mexico dropped by nearly 47% to $12.9 million. 

Chart 5 

1000 

800 

600 

400 

200 

0 

915 

USA 

321 

France 

2001 Performance-Based Income ($ Millions) 

305 

Germany 

291 

Japan 

260 257 

United 

Kingdom 

Italy 

78 71 

Canada 

The 

Netherlands 

71 

Spain 

62 

Argentina 

546 

36 Other 

Territories 

NMPA INTERNATIONAL SURVEY TWELTH EDITION RESULTS OF SURVEY 

13

REPRODUCTION-BASED INCOME 

In 2001, reproduction-based income totaled just below $2.42 billion, a decrease of 11.6% from 2000. The decline 

reflects losses in all three main sub-sectors of reproduction-based income: phono-mechanicals, synchronization/transcription, 

and private copying. 

Revenues from phono-mechanicals fell by 13.1% to $1.73 billion, while revenues from synchronization decreased 

by 7.6% to $619.2 million. As predicted in the report covering 2000, discouraging world record sales figures for 2001 

released by IFPI were a major factor; as piracy continues to rise and legitimate sales continue to fall, these revenues 

are unlikely to show positive growth in the near future. 

Revenues from private copying also fell, down nearly 9% in 2001 to $65.4 million. Private copying accounted for 

2.7% of reproduction-based income,up slightly from the 2.6% it accounted for in 2000.Synchronization accounted for 

25.6% (compared with 24.5% in 2000) and phono-mechanical royalties 71.6% (compared with 72.8%). 

There were no significant changes in the rates of phono-mechanical royalties paid across the world in 2001. In 

Continental Europe,the rate was 9.009% of Published Price to Dealers (PPD),although this was subject to various discounts 

negotiated at the national level.In most of Latin America,the figure was between 8% and 8.5% of PPD; Mexico’s 

rate sets 8% of PPD for cassettes but 7.5% of PPD for CDs. Several countries in Southeast Asia (including Hong Kong, 

South Korea and Singapore) use a percentage of retail-selling price (RSP),with the adjusted retail price (ARP) in Japan 

rising from a 5.6% rate to 6%. Taiwan uses a combination of 5.4% of PPD and 6.25% of RSP. The United States and 

Canada are the only countries where the rate is calculated in cents per track rather than as a percentage of the price. 

The table giving details of the Mechanical Royalty Rates for the 2001 Survey Period lists is on page 18. 

Among the largest national markets for reproduction-based income, the U.K. and Germany swapped the third and 

fourth slots from 2000.Australia/New Zealand moved up from tenth place to eighth in 2001,dropping The Netherlands 

from eighth to ninth. Canada moved up from eleventh place to tenth. Mexico, which finished ninth in 2000, fell to 

eleventh in 2001. 


Chart 6 

700 

600 

500 

400 

300 

200 

100 

0 

655 

USA 

351 

Japan 

2001 REPRODUCTION-BASED INCOME ($ MILLIONS) 

322 319 

Germany 

United 

Kingdom 

167 

France 

114 

Spain 

74 

Italy 

57 53 

The 

Netherlands 

Australia/N.Z. 

44 

Canada 

264 

36 Other 

Territories 

14

DISTRIBUTION-BASED INCOME 

Sales of printed music and income from the rental and public lending of CDs and videocassettes increased in 2001, 

by 4.7% to $804.8 million.The sector accounts for about 12% of the world publishing market. Printed music sales worldwide 

rose by 5% to $767.2 million. The leading national markets for scores and songbooks remained the U.S. and 

Germany, which collectively at $479 million account for over 62% of the income from this sector. However, the total 

given in the Master Survey table undoubtedly understates the size of the global printed music market because there is 

no central source of data for this sector in many countries. 

The bulk of the industry’s rental income is still derived from Japan, where there continues to be a large number of 

rental stores. In 2001, at $28.79 million, Japan accounted for 76.4% of revenues from this sector. However, Japan’s total 

represents a 6.7% decline from 2000, reflecting losses due to piracy, Internet downloading and increased consumer 

spending in other entertainment sectors. 

Chart 7 

2001 DISTRIBUTION-BASED INCOME ($ MILLIONS) 

350 

332 

300 

250 

200 

150 

100 

Chart 8 

50 

0 

USA 

North America 

32.1% 

154 

Germany 

Eastern Europe 

2.3% 

73 

United 

Kingdom 

South America 

2.3% 

61 

France 

50 

29 26 23 21 19 18 

Switzerland 

The 

Netherlands 

Japan 

2001 COMPARISON BY REGION 

Africa/Middle East 

0.2% 

Italy 

Sweden 

36 Other 

Territories 

Canada 

Australasia (including Japan) 

13.7% 

European Union 

49.4% 


Australa 

Africa/M 

South A 

North A 

Eastern 

Europea 

15


Table 8 

DETERMINATION OF MECHANICAL ROYALTIES 

Reported 

Method 

Phono-Mechanical 

of 

Royalties 

Country Net Royalty Determination ($Millions) 

Albania 7.5%-9% on the selling price of CDs, MC, etc. ALBAUTOR negligible 

Argentina 8.19% of published price to dealer (ppd) collective bargaining 17.97 

Australia/N.Z. 9.306% of ppd or 5.73% of retail selling price (rsp) collective bargaining 18.36 

Austria 9.009% of ppd BIEM-IFPI 9.03 

Belgium 9.009% of ppd BIEM-IFPI 24.61 

Brazil 8.4% of ppd (on 90% of sales) BIEM-FLAPF N/A 

Canada 7.1 cents per song or 1.42 cents per minute collective bargaining 35.98 

Chile 7.5 - 8.1% of ppd collective bargaining 0.33 

China 3.5% of ppd MCSC 1.13 

Cuba - - N/A 

Czech Republic 9.009% of ppd - 2.97 

Denmark 9.009% of ppd BIEM-IFPI 36.24 

Egypt 9.35% of retail selling price less 20% deduction 0.00 

Finland 9.009% of ppd BIEM-IFPI 7.38 

France 9.009% of ppd BIEM-IFPI 96.04 

Germany 9.009% of ppd BIEM-IFPI 278.48 

Greece 9.009% of ppd BIEM-IFPI 3.62 

Hong Kong 6.75% of ppd CASH-IFPI; AMPS-IFPI 0.21 

Hungary 9.009% of ppd BIEM-IFPI 2.31 

Iceland 9.009% of ppd BIEM-IFPI 0.00 

India N/A N/A N/A 

Indonesia 3% of ppd Regional MOU N/A 

Ireland 8.5% of ppd collective bargaining N/A 

Israel 9.009% of ppd BIEM-IFPI 1.09 

Italy 9.009% of ppd BIEM-IFPI 51.42 

Japan 6% of adjusted retail price (arp) JASRAC; approved by govt. 170.84 

Lithuania 9.009% of ppd BIEM-IFPI 0.62 

India - - 0.00 

Malaysia 5.4% of ppd Regional MOU N/A 

Mexico 8% of ppd (cassettes); 7.5% of ppd (CD) collective bargaining 18.46 

The Netherlands 9.009% of ppd BIEM-IFPI 4.97 

Norway 9.009% of ppd BIEM-IFPI 12.31 

Peru 5.25% of the rsp BIEM-FLAPF N/A 

Philippines 4.5% of ppd Regional MOU 0.05 

Poland 9.009% of ppd BIEM-IFPI 7.39 

Portugal 9.009% of ppd BIEM-IFPI 6.16 

Republic of Croatia 7.4% of rsp - -3.26 

Romania 9.009% of ppd BIEM-IFPI N/A 

Russian Federation 9-10% of ppd RAO N/A 

Singapore 5.4% of ppd; 5% of rsp collective bargaining; set by statute N/A 

Slovak Republic 9.009% of ppd collective bargaining 0.00 

South Africa 6.75% of ppd; 5% of rsp collective bargaining; set by statute 7.61 

South Korea 5.4% of ppd; 7% of rsp Regional MOU; KOMCA 10.83 

Spain 9.009% of ppd BIEM-IFPI 51.27 

Sweden 9.009% of ppd BIEM-IFPI 22.77 

Switzerland 9.009% of ppd collective bargaining 42.15 

Taiwan 5.4% of ppd; 6.25% of rsp Regional MOU; FAI N/A 

Thailand 3% of ppd Regional MOU N/A 

Turkey 8% of a negotiated or deemed PPD collective bargaining 5.96 

United Kingdom 8.5% of ppd MCPS; approved by royalty tribunal 278.85 

Uruguay 6.08% of rsp collective bargaining 0.00 

USA 8.00 cents per song or 1.55 cents per minute set by statute 552.70 

Venezuela N/A N/A 0.32 

Yugoslavia 7.4% of ppd collective bargaining 0.00 

Zimbabwe N/A N/A negligible 

16

Table 9 

EXCHANGE RATES OF SURVEYED COUNTRIES 

Country Currency Exchange Date In US $ In EUR g 

Albania Albanian Lek 12/31/01 0.0077 0.0068 

Argentina Argentine Peso 6/30/01 1.0002 0.8862 

Australia/N.Z. Australian Dollar Various Various Various 

Austria Austrian Schilling 12/31/01 0.0644 0.0571 

Belgium Belgian Franc 12/31/01 0.8860 0.8860 

Brazil Brazilian Real 12/31/01 0.4495 0.3983 

Canada Canadian Dollar Various Various Various 

Chile Chilean Peso 12/31/01 0.0016 0.0014 

China Chinese Yuan Renminbi 12/31/01 0.1210 0.1072 

Cuba Cuban Peso 12/31/01 1.0000 0.8860 

Czech Republic Czech Crown 12/31/01 0.0278 0.0246 

Denmark Danish Krone 12/31/01 0.1186 0.1051 

Egypt Egyptian Pound 12/31/01 0.2193 0.1943 

Finland Finnish Markka 12/31/01 0.8860 0.8860 

France French Franc 12/31/01 0.8860 0.8860 

Germany German Mark 12/31/01 0.8860 0.8860 

Greece Greek Drachma 12/31/01 0.0026 0.0023 

Hong Kong Hong Kong Dollar 12/31/01 0.1283 0.1137 

Hungary Hungarian Forint 12/31/01 0.0036 0.0032 

Iceland Danish Krone 12/31/01 0.0097 0.0086 

India Indian Rupee 3/31/01 0.0215 0.0190 

Indonesia Indonesian Rupiah 12/31/01 0.0001 0.0001 

Ireland Irish Punt 12/31/01 0.8860 0.8860 

Israel Israeli New Shekel 12/31/01 0.2276 0.2017 

Italy Italian Lira 12/31/01 0.8860 0.8860 

Japan Japanese Yen 3/31/01 0.0076 0.0067 

Lithuania Lithuanian Litas 12/31/01 0.2505 0.2219 

Madagascar Madagascar 12/31/01 0.0002 0.0001 

Malaysia Malaysian Ringitt 12/31/01 0.2632 0.2332 

Mexico Mexican Peso 12/31/01 0.1094 0.0969 

The Netherlands Dutch Guilder 12/31/01 0.8860 0.8860 

Norway Norwegian Kroner 12/31/01 0.1106 0.0980 

Peru Peruvian Nuevo Sol 12/31/01 0.3047 0.2700 

Philippines Philippine Peso 12/31/01 0.0194 0.0172 

Poland Polish Zloty 12/31/01 0.2518 0.2231 

Portugal Portuguese Escudo 12/31/01 0.8860 0.8860 

Republic of Croatia Croatian Kuna 12/31/01 0.1148 0.1017 

Romania Romanian Leu 12/31/01 0.8860 0.8860 

Russian Federation Russian Rouble 12/31/01 0.0328 0.0291 

Singapore Singapore Dollar 12/31/01 0.5406 0.4790 

Slovak Republic Slovak Koruna 12/31/01 0.0206 0.0183 

South Africa South African Rand 12/31/01 0.0840 0.0744 

South Korea South Korean Won 12/31/01 0.0008 0.0007 

Spain Spanish Peseta 12/31/01 0.8860 0.8860 

Sweden Swedish Krona 12/31/01 0.0947 0.0839 

Switzerland Swiss Franc 12/31/01 0.5977 0.5295 

Taiwan Taiwan dollar 12/31/01 0.0285 0.0253 

Thailand Thai Baht 12/31/01 0.0227 0.0201 

Trinidad & Tobago Trinidad Dollar 12/31/01 0.1603 0.1420 

Turkey Turkish Lira 12/31/01 0.0000 0.0000 

United Kingdom British Pound 12/31/01 1.4515 1.2860 

Uruguay Uruguayan new peso 12/31/01 0.0720 0.0638 

USA U.S. dollar 12/31/01 1.0000 0.8860 

Venezuela Venezuelan Bolivar 12/31/01 0.0013 0.0012 

Yugoslavia Yugoslav Dinar 12/31/01 0.0151 0.0134 

Zimbabwe Zimbabwe Dollar 6/30/01 0.0174 0.0155 


17

International Year in Review:2002 

Continued worldwide economic uncertainty, combined 

with a general increase in physical and online music piracy, found 

many territories scrambling to combat decreasing sales figures royalties. 

NMPA INTERNATIONAL SURVEY TWELTH EDITION INTERNATIONAL YEAR IN REVIEW 2002 

ASIA 

The world’s most densely populated 

region recorded another loss 

in sales in 2002, due both to a continued 

economic downturn and 

piracy.According to IFPI,the region 

minus Japan decreased by 15.2% 

in units to 324.8 million,and fell by 

13.4% in value, to $1 billion. 

Japan, the world’s second 

largest market for soundcarrier 

sales, decreased by 10.2% in units 

to 312.8 million, with a corresponding 

loss of 9.9% in value to 575.9 

million yen ($4.6 billion). 

Also suffering significant losses 

in the region were India (down 

14.5% in units and 22.6% in value), 

Indonesia (down 32.8% in units 

and 18% in value),Malaysia (down 

24.2% in units and 20.8% in value) 

and Thailand (down 18.7% in units 

and 11.8% in value). China posted 

a second consecutive year of 

growth, with a 14.7% increase in 

units and 11.6% rise in value, while 

Hong Kong recorded an increase 

of 0.3% in units with a corresponding 

loss in value of 7.1%. 

Piracy remains a paramount 

concern. In Malaysia, which has a 

piracy rate of over 50%, there is 

growing concern that the legitimate 

music industry may not be 

able to sustain itself. That nation’s 

music industry has directly petitioned 

Malaysia’s prime minister, 

Mahathir Mohamad, to create an 

anti-piracy unit to focus on copyright 

law. 

Malaysia’s Domestic Trade and 

Consumer Affairs Ministry has proposed 

an amendment to the country’s 

Copyright Act 1987 that would 

enable nearly 1,000 of the unit’s 

enforcement officers to arrest CD 

pirates.Currently,only the Malaysian 

police have such powers of arrest. 

Under the Copyright Act 1987, 

offending retailers or manufacturers 

can be fined up to RM10,000 

($2,633) per infringing copy, jailed 

for five years, or both. 

In addition,IFPI visited Taiwan in 

mid-October in an effort to compel 

it to increase its anti-piracy efforts. 

Chief among IFPI’s requests was for 

a curb on the manufacture of optical 

discs. The IFPI meeting followed a 

protest march in April by the territory’s 

artistic community demanding 

increased governmental action,after 

which pirate activity actually 

increased. 

The openness of China to western 

trade continues to be watched 

with great interest by the music 

community. In March 2002, Sony 

Music Asia became the first foreign 

record label to launch a joint venture 

in China with mainland partners. 

The move followed China’s 

relaxation of its rules about such 

endeavors following the country’s 

entry into the World Trade 

Organization in 2001. 

Nevertheless, piracy remains a 

severe problem in China. According 

to some sources, it runs as high as 

90%,with the result that widespread 

multi-national involvement in the 

territory still appears some years 

18

away.In July 2002,the IFPI sent three 

Chinese-language websites warning 

notices about their activities which 

the IFPI holds infringe upon its 

members’ copyrights. 

In pirate-riddled Hong Kong, 

legitimate music companies have 

been experimenting with the inclusion 

of free, unique promotional 

items with some CD titles. While it 

has been difficult to measure the 

success of such endeavors, most 

observers believe the free “value 

added”items do have an appeal to 

consumers. 

A renewed sense of commitment 

to anti-piracy efforts has been seen 

in Thailand, where the government 

has announced plans to pursue not 

only individual outlets selling illicit 

product but also the owners of shopping 

malls where many of those 

outlets are located. The move 

comes in the wake of a government 

report finding that pirated music, 

computer software,and movie titles 

are openly sold in 12 major shopping 

malls and commercial areas in 

Bangkok. From Jan. 2000 through 

Oct.2002,police arrested 11,021 suspected 

bootleggers and seized 7.7 

million pirated music and film 

discs, and the government expects 

to confiscate more than 5 million 

pirated items this year. 

Currently software and music 

pirates and retailers of pirated 

goods can receive prison sentences 

of up to five years in jail 

and/or fines of up to $2,250, while 

owners of property on which such 

activities take place can face a 

monetary penalty and/or a custodial 

sentence equal to two-thirds of 

that imposed on the pirates themselves.Historically,however,property 

owners have rarely faced criminal 

charges or imprisonment and have 

only occasionally been fined. 

Under the recently announced 

plan, the Commerce Ministry will 

send written warnings to property 

owners, who will then have 30 

days to remove all pirated goods 

from their properties or face 

charges.The Ministry has promised 

to allow no out-of-court settlements 

in such cases. 

In Russia, the Cabinet of 

Ministers approved the formation 

of a new intellectual property task 

force on Oct. 3, to be comprised of 

the Ministries of Economic 

Development and Trade, Justice, 

Interior, Press, and Culture, as well 

as representatives of state trademark-protection 

agency Rospatent 

and other public intellectual-property 

organizations. Prime Minister 

Mikhail Kasyanov will head the 

interagency commission. 

The move followed a report to 

the Cabinet on the status of the 

audio and video industry by the 

Ministry of Press, TV, and Radio, 

which found that copyright violations 

have cost Russian creators 

and copyright owners between $1 

billion and $5 billion during the 

past few years, with 50% of videos, 

64% of audio products, and 90% of 

DVDs illegally produced. 

South Korea’s music industry 

was the target in July 2002 of a 

massive government investigation 

into charges of bribery and corruption,including 

payola and chart-fixing. 

In 2003, the government’s 

Ministry of Culture and Tourism 

issued official guidelines for online 

music royalties. Effective April 1, 

2003, websites offering streamed 

music are required to pay labels a 

minimum of 500 won ($0.40) per 

month per member, or 20% of 

advertising revenue, whichever is 

greater. For downloads, sites are to 

pay 150 won ($0.12) for individual 

tracks for up to three months from 

their release date and 80 won 

($0.06) after that. The ministry 

expects online royalties to total 

some 86 billion won ($70 million) in 

the first year.The Korea Association 

of Phonogram Producers (KAPP) 

will collect royalties for rights-holders, 

probably by the end of 2003. 

South Korea has one of the world’s 

highest broadband penetration 

rates, estimated by the French 

Internet market research firm 

NetValue to be at about 57% of all 

households. 

In January 2003,the U.S.signed a 

free trade agreement with Singapore 

which established strong copyright 

protection and enforcement and is 

believed to have the potential to 

establish Singapore as an important 

e-commerce hub for all of Asia.The 

agreement includes full implementation 

of the new WIPO Internet 

Treaties. 

EUROPE 

According to IFPI, European 

music markets posted a 4% loss in 

units in 2002, to 1.2 billion, with a 

corresponding loss of 4.1% in value 

to 11.4 billion euros ($10.7 billion). 

Several of the European Union territories 

(including France,Italy and 

Norway) saw increases, while significant 

losses were recorded in 

Spain, the Netherlands,Austria and 

Belgium. Uncertainty about the 

economy and the rising specter of 

unchecked CD burning were again 

negative factors throughout the 

region. 

In Eastern Europe, Russia eked 

out a 1.5% increase in units, 

accompanied by a 24% rise in 

value, though piracy rates 

remained high. Results throughout 

the rest of the region was little 

short of a disaster, with Poland 

falling 44.5% in units and 27.5% in 

value, Hungary down 16.2% in 

units and 19.1% in value, and the 

Czech Republic falling 26.4% in 

units and 20% in value. 

Topping European news for the 

past year was the failure of all but 

two of the European Union’s 15 

member countries to adopt the EU 

Copyright Directive. Only Greece 

and Denmark successfully implemented 

new rules on copyright 

protection into national law before 

the Dec. 22, 2002 deadline. 

The Directive seeks to harmonize 

copyright law across the EU. Among 

other measures,the law allows companies 

selling digital content to use 

copy-protection technology, and 

makes it illegal to circumvent such 

measures. Since then,only Germany 

and Italy have acted. 


19


At issue are the Directive’s restrictions—or 

lack thereof—on private 

copying. The European consumers’ 

lobby BEUC has maintained that the 

Directive gives the music industry 

the ability to control or prevent all 

copying for personal use, and the 

European Association of Consumer 

Electronics Manufacturers has gone 

so far as to ask EU members to 

install “opt-out” clauses in order to 

provide consumers more rights in 

making private copies of digital 

material. 

A draft EU Enforcement 

Directive presented on January 30, 

2003 by the European Commission 

met with mixed reaction. IFPI, the 

Independent Music Companies 

Association (IMPALA), and the 

European Grouping of Societies of 

Authors and Composers released a 

joint statement saying the “draft 

directive fails to introduce harmonization 

at the levels necessary to 

ensure that pirates can no longer 

play on national differences to 

avoid detection and prosecution,” 

adding that the proposal would 

induce a confusing array of different 

legal measures across the continent. 

Under the proposal,counterfeiters 

across the EU could face fines 

equal to double the amount they 

should have paid the copyright 

holders,a measure that currently is 

law only in the U.K.,Ireland,Greece 

and Austria. In addition, the proposal 

includes terms for infringed 

parties to sue for loss of profits, a 

measure that does not currently 

exist in the Netherlands, Spain, or 

the U.K. 

The draft does not include 

tougher sanctions against individuals 

downloading tracks for noncommercial 

purposes. 

In October 2002, the European 

Commission passed an agreement 

offering broadcasters a "one-stop" 

license for simulcasting on the 

Internet.The system, first proposed 

by IFPI in late 2000, is the first such 

Internet licensing plan approved 

by the EC and is expected to open 

up competition within Europe. 

Under the deal, broadcasters 

can obtain a single performing 

rights license from one collecting 

agency to cover Internet broadcasts 

in those countries covered by 

the agreement, superseding a system 

whereby broadcasters were 

required to secure a license from 

each national copyright administration 

and collecting society. In addition 

to most of the major societies 

across the 18-nation European 

Economic Area (EEA), the agreement 

also includes societies from 

Central and Eastern Europe, Asia, 

South America, Australia, and New 

Zealand. 

European music merchants 

have thrown their weight behind 

record labels’ efforts to reduce the 

level of value-added tax (VAT, or 

sales tax) on recorded music to 

match that of other “cultural 

goods,” such as books, across the 

European Union (EU). 

The level of VAT applied to 

records in EU member states currently 

varies from country to country. 

At its highest, in Denmark and 

Sweden, it runs at 25%, while in 

Luxembourg, it stands at 15%. The 

level of VAT applied to books,meanwhile, 

ranges from 0% in the U.K. to 

25% in Sweden and Denmark. 

The existing EU VAT directive 

allows individual states to lower VAT 

on products specified in Annex H of 

the document. IFPI and IMPALA 

have lobbied for recorded music to 

be added to that annex. While 

France and Italy have expressed 

support for the measure, the U.K. 

government does not seem inclined 

to change the current system. 

French finance minister Francis 

Mer is expected to place the VAT 

issue on the agenda of a meeting of 

the European Union’s finance ministers 

to be held June 3 in Brussels; 

the European Commission should 

then make its proposal on VAT at 

the end of June, 2003. 

Universal Music International 

(UMI) filed a complaint in July 

2002 with the EC alleging that 

BIEM, the international trade body 

representing collecting societies 

from 38 countries, has an unfair 

monopoly when it comes to the 

licensing of mechanical reproduction 

rights in Europe. 

In September, BIEM issued a 

reply urging the EC to reject the 

complaint, claiming that UMI’s 

efforts were merely an attempt to 

increase its own profitability. 

BIEM’s stance that the system is 

both fair and efficient is backed by 

the International Confederation of 

Music Publishers/Confederation 

20

Internationale des Editeurs de 

Musique (ICMP/CIEM), whose 

members include all 29 national 

music publishers’ associations in 

Europe.The case now awaits a ruling 

by the EC, which could open 

further investigations into the allegations. 

Under EU competition 

rules, organizations found guilty of 

breaches of antitrust legislation 

can be fined up to 10% of their 

gross annual revenue. 

The most recent deal covering 

European mechanical royalty rates 

was negotiated in 1998 between 

IFPI and BIEM. Under the terms of 

that deal, the two bodies agreed to 

a royalty rate paid by labels to publishers 

of 9.009% of published 

price to dealer (PPD) everywhere 

in Europe except the U.K. (where 

the rate is 8.5%), while also allowing 

individual societies across a 

number of territories to negotiate 

the rate for such releases as TVadvertised 

product. 

In its final evaluation of the 

Czech Republic before that country's 

entry into the EU in 2004, the 

European Commission said the 

nation should step up its efforts 

against the import, production, and 

sale of pirated musical and computer 

recordings. The EC reported that 

pirated music recordings account 

for 48% of the Czech market. It 

added,however,that the country has 

made great strides in aligning itself 

with EU law, citing the Czech 

Republic’s accession in October 

2001 to the World Intellectual 

Property Organization Performance 

and Phonograms Treaty. 

On the independent front, 

European independent labels’trade 

association IMPALA has launched 

IMPALA Interactive, an initiative 

aimed at providing the region's 

independents with a one-stop shop 

for licensing their repertoire to 

online music service operators. 

Managing IMPALA Interactive is 

London-based Musicindie, the newmedia 

and commercial arm of U.K. 

labels’ group the Association of 

Independent Music, which maintains 

that such a program is needed 

to help independents benefit from 

the 861 million euros ($867 million) 

that Jupiter Research predicts the 

music industry will earn from legitimate 

digital sales in Western Europe 

by 2007. 

The Belgian Entertainment 

Retail Association (BERA) has 

become the newest member of the 

European branch of GERA, joining 

retail groups in the U.K., France, 

Germany, and the Netherlands. 

Established in early 2002, BERA 

operates as part of the Belgian 

Federation of Distributors (Fedis). 

In February 2003, Tiscali 

became the first European-based 

Internet Service Provider (ISP) to 

offer free, legitimate access to digital 

music. The company teamed 

with digital music firm OD2 and 

Microsoft Windows Media 9 Series 

to offer its service for six months to 

all registered customers, through 

May 12, 2003. Tiscali maintains a 

catalog of over 150,000 tracks. 

THE UNITED STATES 

In 2002, the U.S. market experienced 

its third consecutive year of 

decline, with a 10.2% loss in unit 

sales to 905.5 million, per IFPI, and 

a corresponding loss in value of 

8.1% to $12.3 billion. The effect of 

the Internet on major album releases 

was cited as a major factor by 

IFPI for the decline. 

In September 2002 came word 

that attorneys general in 41 states 

and three U.S. commonwealths 

had reached a $143 million settlement 

of price-fixing charges 

against the five major U.S. distributors 

and retailers Trans World 

Entertainment,Tower Records, and 

Musicland Stores. The suit, filed in 

August 2000 in federal court, 

alleged that from 1995 to 2000, the 

companies had conspired to 

inflate the price of CDs, costing 

consumers millions of dollars. The 

suit further claimed that the majors 

and retailers illegally used minimum 

advertised pricing (MAP) 

policies to raise CD prices. 

Under the settlement, which 

admitted no wrongdoing on the 

part of the majors,$67.38 million in 

cash is to be distributed to the settling 

states to compensate consumers 

who overpaid for CDs during 

the 1995-2000 period,as well as 

to pay settlement administration 

costs and attorneys’ fees. In addition, 

5.5 million CDs, valued at 

$75.7 million, will be distributed to 

public entities and nonprofit 

organizations in each state to benefit 

consumers and promote music 

programs, with the companies paying 

artist royalties on the CDs. 

On Capitol Hill, two limited bills 

were introduced in Congress during 

2002. In the Senate, Ernest Hollings 

(D-SC) introduced a controversial 

bill that would have called for new 

technical anti-copying standards 

and devices, while in the House, 

Howard Berman, (D-CA) introduced 

a measure that would have 

permitted copyright industries to 

employ several so-called “self-help” 

technical measures to slow down 

and defeat computer networks that 

allow unauthorized file sharing. 

Neither bill made its way out of 

committee. 

Also failing to get out of committee 

was the Music Online 

Competition Act (MOCA), re-introduced 

by Rep. Rick Boucher (D- 

VA).The bill would have amended 

sections of the Digital Millennium 

Copyright Act (DMCA) to require 

record companies and other con- 


21


tent providers to offer their products 

to all Internet-delivery companies 

on the same “nondiscriminatory” 

terms, to exempt Internet 

services from paying royalties to 

music publishers for ephemeral 

copies and archival “back-up 

copies,” and to ensure direct payment 

of the 50% split of compulsory 

license Webcast royalties to 

recording artists. 

Boucher also introduced the 

Digital Media Consumers’ Rights 

Act, which would modify the 

DMCA to enable hardware manufacturers 

to introduce multipurpose 

technology as long as it is 

capable of substantial non-infringing 

use. The bill also stalled in 

subcommittee. 

Meanwhile, House Judiciary 

Committee Chairman F. James 

Sensenbrenner (R-WI) called for 

comments from the industry and 

others on approaches to dealing 

with online piracy, with expectations 

that his committee will hold 

hearings in 2003 on the issue. 

The only music-related measure 

passed by Congress in 2002 lowered 

the rate of the new 

phonorecord digital-performance 

royalty,for webcasters with revenue 

of less than $1 million a year. 

Music industry and Internet 

trade groups are continuing negotiations 

for a joint agreement on 

phonorecord digital-performance 

royalty rates for those webcasters 

who want a statutory license rather 

than choosing to negotiate directly 

with labels. The old rate structure 

ended Dec. 31, 2002. The rates 

would apply to webcasters with a 

revenue of more than $1 million, 

with rates for smaller webcasters 

already set through 2004. 

In the meantime, despite the 

continuing growing threat of piracy, 

the major recording companies 

have announced that,in a compromise 

with computer companies, 

they will not seek legislative intervention 

to prevent digital piracy 

through technological means. The 

Recording Industry Association of 

America (RIAA) and two trade 

groups representing computer 

makers and software companies— 

the Business Software Alliance and 

the Computer Systems Policy 

Project—said they had agreed on 

several basic principles that would 

help ease tensions between their 

industries, and that they plan to 

convene a meeting of senior industry 

executives to discuss technical 

solutions to combat the illegal 

copying of digital material. 

As part of the agreement, the 

RIAA said that under most circumstances 

it would oppose legislation 

that would require computers and 

consumer electronics devices to be 

designed to restrict unauthorized 

copying of audio and video material. 

For their part, the computer 

groups said they would not support 

legislation seeking to clarify and 

bolster the rights of people to use 

copyrighted material in the digital 

age, which the recording industry 

has opposed as unnecessary. 

The Senate Commerce Committee 

held hearings on January 30, 

2003 to investigate the question of 

whether giant radio concerns wield 

too much power over the music 

industry.Lobbyists at the hearing for 

the National Association of 

Broadcasters (NAB) and Clear 

Channel Communications, which 

owns over 1,200 stations and is also 

the country’s largest concert promoter, 

cited studies they claimed 

proved that the 1996 deregulation 

of radio has been beneficial to listeners 

and asked the Federal 

Communications Commission 

(FCC) to eliminate other media 

cross-ownership rules to allow radio 

to better compete in the digital age. 

A group of recording artists, 

smaller broadcasters, concert 

promoters, artists’ groups, and 

musicians’ unions, however, have 

alleged anti-competitive behavior 

on the part of Clear Channel. 

Senator Russ Feingold (D-WI) reintroduced 

his Competition in Radio 

and Concert Industries Act in 2003, 

which would prohibit anti-competitive 

practices in the radio and 

concert industries. 

So-called “pay for play” practices, 

wherein up-and-coming acts 

are allegedly urged to supply 

exclusive promotional concerts to 

certain radio outlets, have been at 

the center of the ongoing radio 

controversy. The RIAA, which did 

not testify at the hearing, joined 

22

with artists’ groups and unions in a 

coalition letter to the FCC sent during 

the summer of 2002, warning 

about the dangers of consolidation 

and condemning “pay-for-play” 

arrangements. 

Members of both parties on the 

Senate Judiciary Committee are 

reported to be preparing their own 

legislation to address the anti-competitive 

concerns. 

In February 2003, several major 

music industry and artist groups, 

including RIAA, the American 

Federation of Television and Radio 

Artists (AFTRA) and the American 

Federation of Musicians (AFM), 

agreed to a joint settlement for royalty 

rates and terms with cable/satellite 

music subscription services 

Music Choice, DMX MUSIC and 

Muzak.The agreement,which avoids 

the need for a Copyright Arbitration 

Royalty Panel (CARP) proceeding, 

covers the period of January 1,2002- 

December 31,2007. Under the deal’s 

terms, SoundExchange will collect 

royalties from the digital music 

channels and distribute them to 

artists, record companies and other 

copyright holders. 

In April 2003, SoundExchange 

announced an agreement with 

webcasters on royalty rates and 

terms to apply to commercial subscription 

and non-subscriptionbased 

webcasters and Internet 

radio. The parties submitted the 

proposal to the Copyright Office 

for industry-wide adoption. 

The agreement allows non-subscription 

webcasters to pay on a perperformance 

or aggregate tuning 

hour basis, and offers an additional 

gross revenue option for subscription 

services. The rates are: 0.0762 

cents ($0.000762) per performance, 

the same rate as established by the 

Librarian of Congress after the last 

CARP; 1.17 cents ($0.0117) per 

aggregate tuning hour; or 10.9% of 

gross revenues. The deal does not 

impact the ability of eligible small 

commercial webcasters to elect 

rates and terms adopted under the 

Small Webcasters Settlement Act. 

The agreement also does not 

address rates and terms for noncommercial 

webcasters or simulcasts 

of over-the-air broadcasts. 

In addition to seeing not only 

significant declines in record sales 

but also several high-profile record 

company executives exiting their 

posts, the record industry also 

endured California state senate 

hearings into its accounting practices. 

In January 2002, California 

Sen. Kevin Murray (D-Culver City) 

introduced a bill that would have 

repealed the music industry’s 

exemption to the state’s “seven-year 

statute.” The exemption allows 

record companies to sue artists for 

undelivered albums if they exit 

their contracts after seven years. 

The bill was later rescinded by 

Murray, who said he would introduce 

an artists’ rights package of 

legislation in 2003 that would revisit 

the seven-year repeal bill, label 

accounting practices, and artists’ 

health care and pension benefits. 

As part of the battle against such 

unlicensed services,record companies 

Universal Music Group,Warner 

Music Group, BMG and EMI each 

launched expanded commercialdownload 

initiatives in the fall of 

2002, making tens of thousands of 

tracks available online. Additional 

content was cleared for distribution 

through online subscription services, 

including Rhapsody, Pressplay 

and MusicNet,which all completed 

cross-licensing initiatives during 

2002 and now each include content 

from the five majors and 

dozens of independent labels. 

On September 26, 2002, the 

RIAA announced the launch of an 

aggressive multimedia campaign 

to educate the public that unauthorized 

downloading of digital 

music is illegal. The campaign, by 

the Music United for Strong 

Internet Copyright (MUSIC) coalition 

of which NMPA is a member, 

followed published estimates that 

over 2.6 billion music files are 

downloaded illegally each month, 

mainly through the likes of Kazaa 

and Morpheus. 

OTHER NEWS… 

In December 2002, Crest National,a 

media company providing film, 

video,audio,and replicating services, 

became North America’s first 

manufacturer of the hybrid Super 

Audio CD (SACD) format. The 

company said it currently has a 

SACD capacity of three million 

units per year,though it anticipates 

that number to rise significantly in 

the coming months. 

In the meantime, the first-ever 

Online Piracy Resolution was unanimously 

passed by the California 

Assembly’s Arts, Entertainment, 

Sports,Tourism, and Internet Media 

Committee on January 29.The resolution 

calls for parents to educate 

their children about the illegal 

nature of piracy and asks universities 

and other such establishments 

offering broadband connections to 

introduce “employee policies and 

technical measures to ensure that 

their networks are not being misused 

to infringe copyrighted work.” 

Also in January 2003 came 

word that RIAA chairman/CEO 

Hilary Rosen will resign at the end 

of the year. RIAA did not name a 

successor, but will form a committee 

to search for a new chairman 

over the next several months.In the 

interim, RIAA president Cary 

Sherman will oversee day-to-day 

operations. 

In March 2003 RIAA announced 

it had allocated $2.5 million in new 

anti-piracy funds to fight Latin music 

piracy in the U.S.The funds were earmarked 

for the 2003-04 fiscal year, 

which began April 1.The RIAA estimates 

that between 30%-40% of all 

Latin music sold in the U.S. is counterfeit,adding 

that 28% of all seizures 

of illegal CDs in the U.S. are of Latin 

music. At least eight new full-time 

Latin music field investigators will 

be hired by RIAA to concentrate 

solely on Latin product. 


23

LATIN AMERICA 


Piracy and poor economic performances 

remain the watchwords 

throughout the Latin region. 

According to IFPI, the region 

declined by 5.4% in units to 161.6 

million, and by 9.8% in value to 

$991.3 million, marking the fifth 

consecutive year of declines for 

the region. 

Mexico remains the largest Latin 

American market and 10th in the 

world despite a second consecutive 

year of decline, with sales down 

4.4% in units and 18.6% in value. 

Brazil reversed several years of 

decline by posting an increase of 

1.6% in units and 3.6% in value, 

while the market in Argentina, still 

beset by both economic and political 

instability, dropped by 45.1% in 

units and by 23.4% in value. 

Piracy levels currently stand at 

50% or more in every country 

throughout Latin America, and CD 

piracy has also been on the rise in 

the U.S. Latin market, due in part to 

illegal product being imported from 

Mexico—where piracy accounted 

for 68% of 2002 sales, or roughly 99 

million units, making it one of the 

top five pirate markets in the world. 

In Brazil,piracy currently represents 

about 53% of the total market and, 

in Colombia, 73% of the market. 

Legitimate music sales in Argentina 

decreased by 50% between 1997 

and 2001, and fell another 80% in 

the first six months of 2002. 

According to figures released by 

IFPI,the overall Latin American market 

dropped 30% to 174 million 

units from 1997 to 2001. 

As a result, several record companies 

in territories such as Mexico 

have been experimenting with eyecatching 

packaging and cutting 

the price for midline product as a 

means of stimulating sales.Many of 

the majors have consolidated their 

Latin operations, maintaining one 

managing director for several 

countries instead of having a managing 

director for each nation. 

Nearly all legitimate Latin music 

companies have stepped up their 

anti-piracy efforts, lobbying their 

governments for increased protection 

and stiffer penalties. In Mexico, 

that country’s Congress has passed a 

reformed “Law Against Organized 

Crime” that designates the production 

and distribution of illicit CDs, 

videos, books, or other works as 

organized crime. Persons convicted 

of manufacturing or distributing 

pirated CDs can now still be 

charged with copyright infringement—which 

carries a penalty of 

up to 12 years in jail—as well as 

being charged with partaking in 

organized crime,which carries additional 

fines and sentences of up to 

40 years in prison. Piracy will also 

now be overseen by a special unit 

that focuses on organized crime.The 

new laws apply only to large-scale 

operations, not to smaller operators 

such as street vendors. CIA operatives 

will continue to be exempt. 

In 2002, Mexican authorities 

seized 54 million pirate CDs, 

including 47 million blank CD-Rs, 

and five million cassettes. The 

country has also rolled out antipiracy 

campaigns on radio and TV. 

In Brazil, meanwhile, most antipiracy 

efforts have been undertaken 

by the anti-piracy unit of the 

Brazilian Association of Record 

Producers. The fact that the country’s 

new president Luiz Inacio Lula 

da Silva Gil has appointed 

renowned singer Gilberto Gil as 

Brazil’s minister of culture is seen 

as an encouraging sign of the new 

government’s commitment to copyright-related 

issues. 

In September 2002, a civil court 

in São Paulo ordered two local CD 

manufacturers to pay record companies 

more than 3.1 million real 

($1 million) in damages,the largest 

compensation ever ordered in 

South America for music piracy. 

The order was the culmination of a 

three-year investigation. 

In February 2003 Abril Music, 

Brazil's leading independent label, 

announced it was ceasing operations 

at the end of the month,citing 

market dominance by the majors 

and the continued problem of 

piracy. 

In Argentina, giant retailer 

Musimundo, which filed for bankruptcy 

in December 2001, has 

reached an agreement with its creditors.The 

new agreement includes a 

60% pardon of its 152 million peso 

($49 million) debt and a 15-year 

payment of the remaining debt in 

installments with an annual interest 

rate of 3%-5%. This agreement was 

approved by the majority of the 

creditors, a necessary condition of 

bankruptcy in Argentina.The retailer 

controls some 60% of the 

Argentinean retail market. 

AUSTRALIA 

Following double-digit growth 

in units and an 8% increase in 

value in 2001, Australia suffered a 

5.9% decrease in units to 61.7 million 

and a loss of 8.9% in value to 

AU$920.1 million ($499.9 million) 

in 2002, according to IFPI. 

According to the Australian 

Record Industry Association 

24

(ARIA), local repertoire decreased 

from 17.2% to 15.6%, with only five 

local acts combining for 26% of the 

total volume of the territory’s 20 

best-selling albums of 2002. As a 

result,ARIA hopes to introduce several 

new initiatives to increase the 

profile of local acts to Australian 

consumers and media. Such strategies 

have proven successful in 

years past. 

Piracy stands at about 9% of the 

Australian market, according to 

ARIA, abetted by an increase in 

small-scale CD-burning operations. 

In addition, the group expects filesharing 

to increase as broadband 

continues to be made widely available.Currently,broadband 

has about 

a 3% penetration rate in the country. 

A coalition of copyright owners, 

including the Australian Music 

Publishers Association, the 

Australasian Performing Rights 

Association, the Screen Producers 

Association of Australia, and the 

Australian Writers Guild, is lobbying 

the government to institute a 

levy on all blank recording media. 

All home copying is illegal under 

current law, although consumers 

making copies for private use have 

never been prosecuted. In return 

for the levy, the coalition is recommending 

that the Copyright Act be 

changed to allow consumers to 

make noncommercial copies for 

personal use. 

ARIA has refused to support the 

levy, believing it cannot effectively 

fight piracy, while the Australian 

Retailers Association has said that 

the cost of collection would outpace 

any benefits. 

Meanwhile, the Australasian 

Performing Rights Association 

(APRA) reported that gross revenue 

from Australia and New 

Zealand reached a record high of 

AU$100 million ($57 million) for 

the year ended June 30, 2002, up 

from AU$96.7 million ($55.1 million) 

the previous year. More than 

AU$16 million ($9.3 million) in 

gross revenue—another record— 

came from overseas sources, an 

increase from the previous year's 

AU$15 million ($8.55 million). 

Distributions to the group’s 33,404 

composer, songwriter, and publisher 

members and overseas affiliates 

totaled AU$85.6 million ($48.7 million), 

up from the previous year’s 

AU$82.7 million ($47.1 million). 

APRA, which also manages the 

Australasian Mechanical Copyright 

Society (AMCOS), further reported 

that joint revenue for the two 

groups totaled AU$121 million 

($68.9 million). Distributions to 

AMCOS' 200 publisher members 

totaled AU$17.4 million ($9.9 million) 

from the collection of 

mechanical royalties, down from 

AU$18.8 million ($10.6 million) the 

previous year. 

During its fiscal year APRA 

reached a deal to increase its 

annual license fees to AU$600,000 

($342,000) from the governmentrun 

ABC TV and radio network,collected 

an additional AU$1 million 

($570,000) from pay-TV networks, 

and negotiated AU$1 million in 

license fees from businesses using 

music-on-hold. 

APRA also raised its fee rate for 

New Zealand commercial radio 

stations; to 2.6% of gross advertising 

revenue for stations using 

music formats and 1% for talk 

radio stations.The fee rate was previously 

2.3% of gross advertising 

revenue for FM stations and 2% for 

AM broadcasters. 

In addition, CMS/CF, touted as 

the world’s first wholly electronic 

mechanical rights clearance system—and 

developed jointly by 

APRA and AMCOS—went live to 

Australian publishers and record 

companies. APRA also noted that 

copyright law was introduced for 

the first time in Papua New Guinea, 

an important territory for APRA. 

International breakthroughs by 

the likes of Kylie Minogue and the 

Vines helped the Australian 

Performing Rights Association to 

achieve a record gross revenue of 

AU$100 million ($56 million), with 

overseas earnings also setting a 

record at AU$16.27 million ($9.1 

million). 

Effective April 1, 2003, retailers 

are working with an updated version 

of the industry’s voluntary 

labeling program for releases 

found to specifically refer to sex, 

drugs and violence.Under terms of 

the program, developed by ARIA 

and the Australian Music Retailers 

Association in conjunction with 

the Office of Film & Literature 

Classification, potentially objectionable 

material will be ranked as 

moderate (level 1), strong (2) and 

high (3), with the last category 

banned from sale to persons under 

eighteen. 

In New Zealand, the music 

industry successfully negotiated 

for the introduction of local music 

quotas ranging from 10% to 15% 

(depending on station format) on 

commercial radio. One year after 

the quota went into effect, figures 

compiled by trade body the Radio 

Broadcasters Association (RBA) 

showed that domestic repertoire 

made up 15% of all music aired by 

its members during 2002, surpassing 

the first-year target of 13% and 

up on the pre-quota 2001 figure of 

11%. Broadcasters are aiming at a 

20% target by 2006. 

In addition, new legislation 

brought before the country’s parliament 

in December 2002 would 

institute a partial ban on parallel 

imports of films on video, but does 

not offer similar protection for 

music. Another proposal, from the 

New Zealand Ministry of Economic 

Development, recommended that 

the 1994 Copyright Act be changed 

to permit consumers to make one 

copy of any sound recording. 

In April 2003, the Australian 

Senate passed several amendments 

to the Copyright Act to help 

streamline court action against 

music pirates and counterfeiters. 

The new legislation clarifies the 

parameters of copyright ownership, 

amends music-labeling provisions 

to match international 

record-industry standards, and 

extends the civil jurisdiction of the 

Federal Magistrates Court to copyright 

matters. The amendments 

also increase criminal penalties for 

importing pirate and counterfeit 

CDs and make it possible for a 


25


court to award more damages to a 

copyright owner. 

CD/CASSETTE PIRACY 

The global market for pirated 

music product continues to rise at 

an alarming rate, while trade 

organizations and law enforcement 

officials continue to battle 

against the trend. 

According to IFPI Music Piracy 

Report 2002, global sales of pirate 

music discs rose nearly 50% to 950 

million units in 2001. IFPI places 

the dollar value of such activity at 

$4.3 billion, a slight increase over 

the previous year. 

IFPI places the lion’s share of 

blame on the growth of organized 

CD-R piracy,saying that commercial 

CD-R pirate sales tripled in 2001 to 

450 million units. The group found 

that commercial CD-R piracy rose 

in particular in Latin America, 

North America and Southern 

Europe in 2001. South East Asia 

and, to a lesser extent, Eastern 

Europe are seen as the predominant 

centers of large-scale factorypressed 

pirate music CDs. 

According to the Music Piracy 

Report,an estimated total of 1.9 billion 

pirate recordings, including 

discs and cassettes, was sold in 

2001 (up from 1.8 billion in 2000), 

meaning 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 to 

500 million units, compared to 475 

million in 2000. 

The increase in the value of the 

music pirate market (from $4.2 billion 

in 2000 to $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 it says 

are far greater than $4.3 billion. 

The report also states that illegal 

music sales outnumber legal sales 

in 25 countries—predominantly 

developing markets—compared to 

21 in 2000 and 19 in 1999.Territories 

where piracy is at a rate of over 25% 

and notably worsening include 

Brazil, Central America, the Czech 

Republic, Slovakia, Spain, Thailand 

and Russia. Ukraine, where the U.S. 

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%). 

In the U.S.,CD-R piracy increased 

significantly: 2.8 million pirate CD-R 

discs were seized in 2001, up from 

1.6 million in 2000. 

Meanwhile, European Commission 

figures released in July 2002 

showed that seizures of pirate discs 

at the E.U.’s external borders 

soared by 349% to more than 40 

million items in 2001. Pirate CDs 

account for nearly half the E.U.’s 

estimated two-billion Euro pirate 

and counterfeiting business. 

The European Commission’s 

July 26 report on counterfeiting and 

piracy stated that CDs (including 

audio, games and software), DVDs 

and cassettes are the fastest-growing 

category of pirate goods, 

accounting for 42% of the total 

seized for 2001, and that a number 

of customs investigations showed 

potential links between piracy and 

certain terrorist networks. 

Concurrently,there now are more 

unauthorized music files available 

on the Internet than at the height of 

Napster's illegal service.A recent survey 

by Internet market research firm 

Jupiter Media Metrix found estimates 

that 3.1 million more people 

were using peer-to-peer networks in 

March 2002 than in February 2001 

when Napster was at its peak. 

CD burning has also badly hit the 

European music sector. In Germany, 

the number of blank CDs used to 

burn music was estimated at 182 

million in 2001, compared to 185 

million CD album sales, according 

to a March 2002 survey by market 

research firm Gfk. In Spain, 71 million 

albums were sold in 2001 compared 

to an estimated 52 million 

blank CDs used to burn music, 

according to a survey by Millward 

Brown/Alef. 

26

In the U.K., the Alliance Against 

Counterfeiting and Piracy reported 

that the British copyright industry's 

losses from counterfeiting and 

piracy fell slightly in 2001 to slightly 

more than £8.5 billion ($13.1 billion). 

In 2000, the U.K. industry lost 

nearly £9 billion ($13.9 billion). 

The worldwide copyright industry 

continues to seek improvements 

in anti-piracy legislation and 

law enforcement.In 2001 IFPI completed 

the formation of its 50- 

strong global anti-piracy network, 

which works alongside another 

250 industry investigators 

employed by the organization’s 

affiliated national associations. 

Assisted by IFPI and its affiliates, 

enforcement authorities worldwide 

seized ten million CD-R 

discs—three times more than in 

2000—19 million blank CD-Rs (up 

from less than 1 million),and more 

than 45 million copies of counterfeit 

CD artwork. 

In addition, twice as many CD 

production lines (42) were de-commissioned 

in 2001 as in the previous 

year, eliminating CD production 

capacity equivalent to the size of the 

market of the U.K. 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 $5 

million over the past four years. 

Thanks in part to IFPI initiatives, 

the international law enforcement 

agency Interpol is stepping up its 

anti-piracy efforts, creating a working 

group to handle investigations 

into intellectual property rights 

crimes that will work closely with 

IFPI’s own anti-piracy team. 

Interpol's working group will draw 

its membership from public and 

private sectors, and will use IFPI to 

assist in training police agencies 

worldwide. 

Record labels are also stepping 

up their anti-piracy efforts. At the 

end of July 2002, in the first move 

of its kind, Universal Music Group 

named David Benjamin its senior 

vice president of anti-piracy, where 

he will work with the company’s 

labels and publishing companies, 

Universal’s Internet division eLabs, 

its business and legal affairs 

department, and other departments 

to coordinate anti-piracy 

activities. He will also work with 

other Vivendi Universal companies 

and with various industry trade 

associations. 

On August 12, 2002, Richard 

Cottrell, president of EMI Music 

Distribution in the U.S., was named 

to the newly created position of 

global head of anti-piracy. Cottrell 

will have worldwide responsibility 

for designing and managing EMI's 

anti-piracy initiatives and will take 

a major role in defining EMI’s digital 

distribution strategy. 

On August 16, 13 of the major 

recording companies—including 

Universal, Sony, RCA Records and 

Warner Bros.Records—filed a copyright 

infringement suit in Manhattan 

federal court against a number of 

major Internet service and network 

providers, charging that their routing 

systems allow users to access 

the Listen4ever.com website and 

illegally copy musical recordings. 

The suit, which sought a court 

order requiring the defendants to 

block Internet communications to 

and from Listen4ever.com, was 

then dropped on August 21; with 

the plaintiffs saying the site had 

gone dark.Listen4ever.com allegedly 

offered complete albums—as 

well as some albums not yet 

released—for illegal copying. The 

RIAA said it would reinstitute the 

suit if the site reappears. 

The plaintiffs maintained 

that they had not 

been able to determine 

who owns and operates 

Listen4ever.com, believed 

to be based in China.The 

suit asserted that since 

the site used a U.S. 

domain name, was written 

entirely in English, 

and did not appear to feature 

Chinese music,it “has 

clearly located itself in 

China to avoid the ambit 

of United States copyright 

law.” Defendants in the 

suit included AT&T Broadband 

Corp., Cable & Wireless USA, Sprint 

Corp., Advanced Network Services 

and UUNET Technologies. 

Following midterm elections in 

the U.S. in 2002, Rep. Lamar S. Smith 

(R-TX) is the new chairman of the 

House Subcommittee on Courts,the 

Internet, and Intellectual Property, 

succeeding Rep. Howard Coble (R- 

NC). Nine-term Congressman Smith 

has received high marks from music 

industry officials,and is promising to 

take a hard look at piracy. 

On January 30, 2003, the 

European Commission presented a 

draft directive that punishes copyright 

infringement for commercial 

purposes, but allows the music 

end-user to continue downloading 

without penalty. The directive 

would replace national anti-piracy 

laws in the 15 nations that make up 

the European Union, which are 

oftentimes contradictory: in some 

nations counterfeiters receive jail 

time and/or heavy fines, while in 

others they remain free. 

The EC said that nearly one 

third of all CDs sold in Europe were 

illegally copied. Under the proposal, 

EU countries would be able to 

halt the sale of fake goods and 

seize the bank accounts of offenders,while 

judicial authorities would 

be granted increased evidencegathering 

abilities. Counterfeiters 

would face fines equal to double 

the amount they should have paid 

the copyright holders. 

At the same time, however, the 

proposal excludes piracy for pri- 


27


vate use, allowing individuals to 

continue downloading songs over 

the Internet. The EC said the draft 

was intended to strike a “fair balance” 

between copyright-holders 

and the ability of consumers to use 

the Internet freely. 

Under the draft’s terms,criminal 

sanctions would only apply when 

copyright infringement is carried 

out intentionally and for commercial 

purposes. Such peer-to-peer 

file-sharing services as Kazaa and 

Morpheus, which encourage copyright 

infringement and make 

money from advertising, would be 

considered commercial endeavors 

and in violation, according to the 

draft. The EC further underscored 

potential links between such 

music piracy and organized crime, 

and said it estimates that over 

17,000 EU jobs are lost annually 

through piracy and counterfeiting. 

Ten EU copyright groups, 

including IFPI, released a statement 

strongly condemning the 

EC’s findings. Saying that the film, 

video, music and leisure software 

industries in Europe lose over i4.5 

billion (US$4.9 billion) annually as 

a result of piracy,the statement said 

that, “The proposal creates a two 

tier system of enforcement where 

some types of piracy are acceptable 

and others not.” 

To become law, the proposal 

must be passed both by the 

European Parliament and EU governments. 

In the meantime,what has been 

described as the largest anti-piracy 

raid ever in the European Union 

occurred in late January 2003, 

when over 70 agents raided a 

dozen premises in Madrid and 

seized illegal copying equipment 

valued at about 2 million euros ($2 

million), with a capacity to produce 

about 60.5 million false 

copies per year. Forty people were 

arrested in the action. 

At about the same time, the 

Spanish government has promised 

to implement a modification to its 

criminal justice law that will eliminate 

the need for a prior complaint 

to be lodged before acting against 

street vendors.The new law, to take 

effect on April 28, 2003, will also 

alter the penal code to allow for 

“aggravating circumstances,”including 

the use of minors or membership 

of a criminal organization in 

the production and distribution of 

illicit product. 

Italy’s anti-piracy body, FPM, 

released its annual report on 

January 15, 2003, finding that some 

1,500 arrests for copyright infringement 

took place in 2002, up 194% 

from the previous year. In addition, 

anti-piracy operations undertaken 

by law-enforcement agencies 

increased by 124%, and the number 

of illegal CDs seized was up by 

74% to more than 2 million. The 

activity follows the late 2000 passage 

of stricter copyright infringement 

legislation. 

IFPI maintains that the international 

recording industry’s four 

main priorities are to bring copyright 

laws in line with international 

standards; to establish 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; 

to encourage and promote efficient 

enforcement by police and customs; 

and to aggressively prosecute 

against such theft of intellectual 

property. 

The heat continues to be turned 

up on American universities who 

allow their students to use highspeed 

campus Internet connections 

for the downloading of music and 

movie files. The threat—and sometimes 

actual filing—of lawsuits has 

resulted in several high-profile learning 

institutions’ taking action. 

On April 3, 2003, the Recording 

Industry Association of America 

filed suits against two students at 

Princeton University in New Jersey 

and against one student each at 

Rensselaer Polytechnic Institute in 

Troy, NY and at Michigan 

Technological University (MTU) in 

Houghton, MI, seeking permanent 

injunctions to shut down file-sharing 

systems operated on the computer 

networks at the schools.As a 

result, two of the sites have been 

taken down by their owners, and 

the RIAA says that at least 10 similar 

sites on other campuses that 

had not yet been targeted have 

also shuttered. 

The lawsuits followed a letter 

sent in January 2003 by the RIAA to 

2,300 college administrators, warning 

them that internal networks 

were being used by illegal file 

traders and noting that further 

action could be taken. 

Also in April 2003, 85 Naval 

Academy midshipmen were disciplined 

for using a military Internet 

connection to illegally trade copyrighted 

music and movie files.The 

punishments ranged from demerits 

and extra work to loss of privileges 

and leave, according to The 

Baltimore Sun.That move followed 

a November 2002 incident, where 

the Academy seized 92 student 

computers on suspicions the students 

had used the Academy’s T3 

Internet line to set up 24-hour 

Internet hubs to trade music and 

movies—a violation of Defense 

Department policy and federal 

copyright laws. 

Since that time, the Academy 

has installed software to restrict 

peer-to-peer file sharing, a move 

already taken by several colleges 

and universities, including the U.S. 

28

Military Academy and the Air 

Force Academy. Other universities, 

including Ohio State, Harvard and 

Penn State,have also been working 

to educate their students and staff 

about the issue. 

In another development, IFPI 

began issuing brochures to universities 

in 29 countries in Europe, 

South America, Asia and Australia 

detailing the legal and technological 

issues surrounding the use of 

online file-sharing networks. 

University computers tend to be 

connected to high-speed networks 

and can have vast storage space, 

two essentials for uploading and 

downloading large music and 

movie files. Similar anti-piracy 

efforts have targeted large corporations. 

American universities have 

been targeted by U.S. music labels 

for the past two years. 

INTERNATIONAL YEAR IN 

REVIEW: TECHNOLOGY 

Technological developments 

continue to be a major force in the 

music industry, especially as 

regards the availability of music on 

the Internet. 

In addition to the advances 

made by such legitimate online 

music services as MusicNet, 

Pressplay and Rhapsody detailed 

above, new technologies aimed at 

anti-piracy are continuing to be 

developed. On February 10, 2003, 

IFPI and the RIAA launched an 

electronic identity tag designed to 

help track Internet music sales and 

to compensate musicians and song 

writers as more of their works 

become available online. The 

Global Release Identifier, or GRid, 

is a code similar to the Universal 

Product Code (UPC) bar code 

found on CDs and cassettes. 

Under the program, each track 

will be assigned an individual 

GRid serial number; each time a 

record label or online retailer distributes 

a song in the form of a 

webstream or download, the information 

will be reported back to 

rights societies and collection 

agencies so that the creators can 

be compensated for sales. 

Resellers would be charged an 

annual fee of £150 ($245.10), for 

which they can issue an identity 

tag to millions of songs sold online. 

GRid will not replace existing 

identification systems such as the 

UPC or International Standard 

Recording Code (ISRC), but will 

instead work alongside those 

already in use across the music 

industry. Sound or music video 

recordings must have an ISRC 

code assigned to them before a 

GRid number can be added. 

GRid is the result of IFPI and 

RIAA participation in the Music 

Industry Integrated Identifiers 

Project (MI3P), set up in January 

2001, which included the music 

rights associations BIEM and 

CISAC. IFPI will administer the system 

on behalf of the global recording 

industry. 

NEW MEDIA 

At the annual Midem conference 

held in Cannes Jan. 19-23, 

2003, Microsoft announced that it is 

releasing an anti-piracy technology 

that enables the embedding of 

secure “second-session technology” 

on prerecorded music titles. 

The technology,called Windows 

Media Data Session Toolkit, allows 

the placement of two versions of an 

album on one CD: the first, which 

does not allow for any digital copying, 

is playable on standard CD 

players, while the second, which is 

compressed in the Windows Media 

Audio Format,uses Windows Media 

digital-rights management to allow 

the album to be played on PCs and 

to be copied onto computer hard 

drives. It also enables the secure 

tracks to be transferred to most 

secured portable devices.Universal 

Music Group and EMI Recorded 

Music are among the labels planning 

to employ the Windows Toolkit, 

and expect to have copy-protected 

titles featuring the “second sessions” 

technology for sale later this year. 

On Jan. 22, 2003, Sony Music 

Entertainment (Japan) announced 

it has begun to sell CD singles that 

require users to pay a fee over the 

Internet each time they make 

copies.The CDs can be copied onto 

the buyer's computer once, with 

additional users seeking to copy the 

music required to pay a fee of about 

$1.69US for each song. SMEJ does 

not currently plan to offer the technology 

outside of Japan. 

Meanwhile,a report by technology 

research and consulting firm 

Strategy Analytics predicts that the 

number of U.S. households using 

cable modems, DSL, or other broadband 

technologies to connect to the 

Internet will rise by more than 40% 

during 2003, and that by the end of 

2008, the total number of broadband 

subscribers will increase to 64 

million, or 59% of all US homes. 

Currently, only about 27% of all U.S. 

Internet homes use broadband connections. 

A January 2003 report by the 

Online Publishers Association 

found that the total market for paid 

online content in the U.S. grew to 

$361.4 million for the third quarter 

of 2002, a 14% gain over the previous 

quarter and a 105.3% increase 

over third-quarter 2001. Through 

the first three quarters of 2002, U.S. 

consumer spending for paid 

online content totaled $975 million, 

compared with $670 million 

for the full-year 2001. 

The report also found that the 

number of U.S. consumers paying 

for online content in third-quarter 

2002 nearly doubled to 14.8 million 

from 7.9 million in third-quarter 

2001,with more than 10% of online 

users paying for some form of content 

online. 

Also continuing to be a significant 

source of income for copyright 

owners is ringtones.According to a 

study released in January 2003 by 

London-based Informa Media 

Group, authors’ collection societies 

collected $71 million in royalties 

from ring-tone sales in 2002,up 58% 

from the previous year. The figures 

suggest that the overall market is 


29


worth at least $700 million annually, 

and could possibly be worth as 

much as $1 billion per year. The 

proceeds are divided between 

operators, labels and the artists, 

and the creators and owners of 

musical compositions. 

Informa’s report stated that costs 

vary widely by country: Russia’s 

largest mobile phone operator, 

MTS, charges 30 cents per download, 

while Australia’s Vodafone 

charges $1.83. 

An increased sense of cooperation 

is also developing between 

music companies and mobile 

phone operators, who are actively 

looking at the joint revenue-generating 

possibilities of selling everything 

from ringtones and phone screensavers 

to music downloads and 

videoclips. U.K.-based wirelessresearch 

company EMC forecasts 

that the number of mobile-phone 

subscribers in several of the world’s 

major territories will show significant 

increases between now and 

2004: it predicts that in Western 

Europe the number will rise from 

the current 304 million to 364 million; 

in Eastern Europe, from 55 

million to 76 million; in North 

America, from 148 million to 188.5 

million; and in the Asia-Pacific 

region from 302 million to 399 million, 

displacing Western Europe as 

the world’s largest single market. 

At the same time, U.S. wirelesscontent 

service provider Moviso 

has predicted that 550 million 

consumers internationally will be 

subscribing to wireless entertainment 

by 2004, increasing to 775 

million in 2005. 

In another important development,Anderson 

Merchandisers,the 

music distributor for the Wal-Mart 

retail chain, has agreed to buy 

some of the assets of digital music 

pioneer Liquid Audio, which has 

licenses to distribute over 350,000 

songs.Anderson expects to distribute 

music downloads through the 

websites of a number of retailers, 

including Wal-Mart. 

On the performing-rights society 

front,ASCAP partnered with interactive 

radio concern YES Networks to 

create Media guide,a jointly owned 

company that promises optimal 

monitoring of music performances 

on radio, TV, and the Internet using 

YES’ proprietary technology, while 

BMI launched Online Works in conjunction 

with its eight European 

partners in the digital copyright network 

FastTrack,which currently covers 

about 7.2 million works. 

In January 2003, FastTrack 

announced it had paid $300,000 

for a 60% stake in the Argos 

International Organization and its 

digital rights management technology,which 

allows licensees to automate 

the process of sending data 

about the use of works to copyright 

owners.The technology was developed 

by Spanish society SGAE and 

German society GEMA in 1998.The 

remaining 40% of Argos is owned 

by SGAE and its digital arm sDae. 

30

Country Profile 

mexico 

The 19th-largest market for music publishing 

revenue in 2001,Mexico continues to be faced 

with a growing piracy problem. 

MEXICAN SOCIETIES 

Asociacion Nacional e 

Interpretes (ANDI) 

PRESIDENT: 

Humberto Zurita 

According to figures released by IFPI,in 2002 Mexico’s music market fell by 15.5% in units to 56.8 

million,with a corresponding 16.1% loss in value to 5.3 billion pesos ($547.4 million),marking 

its second consecutive year of decline. 

Mexico still remains the largest Latin American music market and 10th largest overall in the 

world, although its potential remains dramatically unrealized; IFPI estimates that 50% of the 

Mexican population buys pirate music products. Local estimates found that piracy accounted for 

68% of 2002 sales, or roughly 99 million units, costing the local industry somewhere between $300- 

500 million annually and making Mexico one of the top five pirate markets in the world. 

In 2002, 54 million pirate CDs—including 47 million blank CD-Rs—and 5 million cassettes were 

confiscated. Law enforcement efforts have been accompanied by massive anti-piracy campaigns 

on radio and TV. 

In another attempt at combating piracy, several labels have reduced their midline prices, 

although they caution that they will never be able to undercut the price of pirated product. Since 

piracy is such a well-organized business in Mexico, pirated product is often attractively packaged. 

According to AMPROFON, the nation’s association of record and video producers, the number of 

points of sale for music has dropped 50% since the 1980s.Currently,there are approximately 1,000 legitimate 

points of sale,compared with 50,000 outlets (including street vendors) that sell pirated music. 

Tonala 60, 

Colonia Roma (Delagacion 

Cuactem) 

06700 Mexico DF 

Tel: 52 5 525 4059 

Fax: 52 5 207 9889 

E-mail: andi@andi.org.mx 

Website: www.andi.org.mx 

Sociedad de Autores y 

Compositores de Musica 

(SACM) 

PRESIDENT: 

Roberto Cantoral Garcia 

Mayorazgo 129, 

Col Xoco CP 

03330, Mexico DF 

Tel: 52 5 604 7493 

Fax: 52 5 604 7923 

E-mail: informatica@sacm.org.mx 

Asociacion Mexicana de 

Productores Fonogramas y 

Videogrammas (AMPROFON) 

GENERAL DIRECTOR: 

Fernando Hernandez 

Tennyson No. 96 esq., 

Presidente Masaryk Entre, 

Alejandro Dumas y Eugenio Sue, 

Colonia Polanco 

Chapultepec, Mexico 11570 

Tel: 52 5 281 6035 

Fax: 52 5 280 9079 

NMPA INTERNATIONAL SURVEY TWELTH EDITION COUNTRY PROFILE: MEXICO 

31

NMPA INTERNATIONAL SURVEY TWELTH EDITION COUNTRY PROFILE: MEXICO 

“It’s easier to buy an illegal album than the legitimate product,” AMPROFON general director 

Fernando Hernández told Billboard.“While pirates are selling over 100 million pirated CDs and cassettes,we 

barely sell 50 million.And beyond the economic impact,we’re losing our country’s musical 

culture,which has given us international renown.Why? Because labels don’t have the resources 

to invest in local product. We’ve noticed a 50% reduction in rosters. Especially with local labels 

whose entire investment is in Mexico.” 

As an example, leading regional Mexican label Disa has dropped nearly 30 acts from its roster in 

each of the past two years,and signing two or three new acts per year,as opposed to 15-20 in years past. 

Anti-piracy activists both within and without Mexico warn, however, that implementing the new 

legislation will be difficult.An article in Mexico’s leading daily newspaper, Reforma, noted that there 

are only 50 agents working in the Organized Crime Special Unit,which investigates all organized criminal 

activity in the country.AMPROFON, however, maintains that the state attorney’s office is working 

to establish a specialized unit that will only deal with industrial and intellectual property crimes. 

Meanwhile,the combination of piracy and the worldwide economic downturn were blamed for 

the November closings of two Mexican independent labels, Generamúsica and Azteca Music. 

Currently Mexico’s legitimate market is almost completely CD;the format accounted for 50 million 

of the total 56.8 million units sold in 2002, according to IFPI, followed by cassettes at 6.5 million and 

LPs at 0.1 million.Music video sales are still restricted to VHS,although the sector is exploding: 2002’s 

units were up 278% to 859.5 million, with a corresponding increase in value of 207.7% to 160.2 

thousand pesos ($16.6 thousand). 

Mexican music retailing is dominated by small independent retailers and street vendors and 

market stalls.Tower Records, facing a fiscal crisis of its own, has announced that it will sell its four 

Mexican stores to local music chain Mixup,which will license the Tower brand.All four Tower stores, 

located in Mexico City,were opened in 1989 as part of a joint venture with local businessman David 

West. Operations of both Tower and Mixup will be supervised by Mixup founder and head Isaac 

Massry, who says the Tower outlets will remain distinct from Mixup stores, who said the only anticipated 

change will be centralized buying to provide better pricing. 

Department stores and supermarkets also maintain a healthy portion of the Mexican retail market, 

with the Aurrera and Commercial Mexicana chains selling music at discounted prices and US-based 

retailers Wal-Mart and K-Mart increasing their presence in the nation. 

In March 2003 came word that the Mexican music business was undertaking another of its 

periodic crackdowns on “carridos”—popular Mexican songs whose subject are often drug dealers 

and gangsters. Some radio stations have refused to play songs that allegedly glorify violence and 

corruption. 

In November 2002, the Mexican recording industry 

held its first-ever Oye! (Listen!) National Music Awards. 

AMPROFON,which helped organize the awards,hopes 

the annual event will be telecast jointly on Mexico’s 

two networks, Televisa and TV Azteca, and that the 

show will generate enough income to create an antipiracy 

fund. 

“Currently Mexico’s legitimate 

market is almost completely 

CD; the format accounted for 

50 million of the total 56.8 

million units sold in 2002, 

according to IFPI” 

32

Year in Review: 

NMPA and the Music Publishing Industry 

The past year was another industrious 

one for the National Music Publishers’ 

Association, Inc. (NMPA) and its affiliated 

licensing organization, The Harry Fox 

Agency, Inc. (HFA). Both groups were 

busy with a far-ranging variety of issues. 

NMPA INTERNATIONAL SURVEY TWELTH EDITION THE YEAR IN REVIEW: NMPA AND THE MUSIC PUBLISHING INDUSTRY 

33


ELDRED VS. ASHCROFT 

An important victory for copyright owners came on 

January 15, 2003, when the U.S. Supreme Court ruled 7-2 

to uphold lengthier copyrights under terms set by the 

1998 Sonny Bono Copyright Term Extension Act (CTEA). 

The ruling struck down hopes of Internet publishers and 

others who were seeking to make older copyrights, 

including songs,movies,books and likenesses of characters 

like Mickey Mouse available online without paying 

royalties, and brings to an end several years’ worth of 

contention in the Eldred vs. Ashcroft case. 

In its ruling,the court said that the CTEA was neither 

unconstitutional overreaching by Congress, nor a violation 

of constitutional free-speech rights. 

The Constitution “gives Congress wide leeway to prescribe 

‘limited times’ for copyright protection and 

allows Congress to secure the same level and duration 

of protection for all copyright holders, present and 

future,” Justice Ruth Bader Ginsburg said from the 

bench. 

The CTEA,which brings the U.S.in line with many of its 

European neighbors,established the copyright protection 

period as 70 years after the death of the creator. Works 

owned by corporations are now protected for 95 years. 

AUDIOGALAXY.COM SETTLEMENT 

On June 17,2002,NMPA and the RIAA announced an 

out-of-court settlement with Audiogalaxy.com, the 

Napster-like clone, which requires Audiogalaxy to stop 

the infringement of copyrighted works on their peer-topeer 

network.The agreement followed a lawsuit filed in 

late May 2002 accusing Audiogalaxy of facilitating and 

encouraging widespread copyright infringement—a 

last resort step after repeated efforts to warn the firm of 

their liability were ignored or resulted in ineffective 

attempts to fix the problem. 

The settlement allows Audiogalaxy to operate a “filtering” 

system, which requires that for any music available, 

the songwriter,music publisher,and/or recording company 

must first consent to the use and sharing of the work. 

The other key provision of the agreement is for 

Audiogalaxy to pay the music publishers and recording 

industry an amount based on Audiogalaxy’s assets and 

interest in resolving this case quickly. 

AIMSTER LITIGATION 

The focus of the Aimster litigation has shifted back 

again to Chicago. In the District Court (the trial court), 

the court found John Deep (owner and operator of the 

Aimster service) in contempt for failing to comply with 

the October 30,2002 preliminary injunction.On April 14, 

2003,the court directed Deep to pay fines and reimburse 

the attorneys for the fees and costs they had expended 

in having to bring the contempt motion. Specifically,the 

court ordered Deep to pay attorneys’fees and costs in the 

amount of $103,850.54 and an additional fine in the 

amount of $5,000. Not surprisingly, Deep has filed an 

appeal from this order. 

In the Court of Appeals for the Seventh Circuit, the 

parties completed briefing the appeal of the preliminary 

injunction decision at the end of April 2003. The 

appellate court has since scheduled oral argument before 

a three-judge panel on June 4, 2003. NMPA continues to 

support the music publishers’interests in all aspects of this 

litigation. 

The RIAA is asking the court to appoint a compliance 

officer and to fine Deep $1,500 per day, with the 

money going to the court. 

UPDATE ON NAPSTER LITIGATION 

After the sale of its assets to Roxio, Inc. (a manufacturer 

of software products for CD/DVD burning, photo 

editing, and video editing) in November 2002, the company 

known as Napster remains mired in bankruptcy 

proceedings in Delaware. In purchasing the assets of 

34

Napster, Roxio did not assume any of the liabilities, 

including the damages caused by the massive copyright 

infringements that were the subject of the lawsuits 

brought by the music publishers and the record labels. 

To date, no agreement has been reached as to the 

distribution of funds from the Napster estate, and the 

various creditors have not yet presented a distribution 

plan to the court. NMPA is currently in negotiations with 

the Trustee, the Unsecured Creditors’ Committee, and 

the RIAA over an appropriate and equitable division of 

the proceeds from the sale to Roxio and certain monies 

expected from a separate litigation relating to Napster’s 

directors’ and officers’ liability insurance policy. NMPA 

will continue to support the music publishers’ interests 

in the bankruptcy proceedings. 

BERTELSMANN LITIGATION 

A group of songwriters and music publishers—Jerry 

Leiber, Mike Stoller, Frank Music Corporation and Peer 

International Corporation—filed a class action lawsuit 

in a New York federal court against Bertelsmann A.G.on 

February 19,2003.The suit,filed on behalf of themselves 

and a proposed class of HFA-represented music publishers,seeks 

damages on the order of $17 billion arising 

from what the suit terms Bertelsmann A.G.’s “willful participation…in 

the widespread infringement of copyrighted 

musical works by users of the notorious Napster 

service, in violation of the U.S. Copyright Act.” 

The suit alleges that, were it not for Bertelsmann’s 

attempted acquisition of Napster’s assets in 2000 and its 

subsequent support, the online service would have run 

out of funding and ceased operations. 

UPDATE ON THE MUSICCITY LITIGATION 

The NMPA-supported litigation against the 

Morpheus, Kazaa, and Grokster unlicensed Internet 

peer-to-peer services took an unexpected and disappointing 

turn in late April 2003. Last fall, the music publishers, 

record labels, and motion picture studios 

brought motions for summary judgment against 

StreamCast Networks (owner and operator of 

Morpheus), Kazaa (the original owner and operator of 

the Kazaa service in The Netherlands), and Grokster. 

StreamCast and Grokster also filed cross-motions for 

summary judgment.Both sides sought a definitive ruling, 

instead of a trial,on the issue of whether the conduct of 

these services amounts to contributory and vicarious 

copyright infringement. 

The copyright holders argued that, like the now 

defunct Napster service, the defendants were contributorily 

liable for copyright infringement because they 

knew that their users were infringing copyrights and 

facilitated and encouraged that illegal activity.They also 

asserted that the defendants were vicariously liable for 

copyright infringement because they benefited financially 

from the illegal conduct through advertising sales, 

and further, had the right and ability to control the 

infringing conduct. 

In contrast, the defendants contended that they 

should not be held responsible for the infringing acts of 

their users. The defendants maintained that all they did 

was distribute software—and that software, like VCRs 

and photocopy machines,could be used for a variety of 

purposes,including many legal ones. Put differently,the 

defendants claimed that their respective services had 

“substantial non-infringing uses.” 

On April 25, 2003, the court issued its decision, finding 

in favor of the operators of the Morpheus and 

Grokster services and against the copyright holders. 

On the contributory infringement claim, the court 

initially adopted the defendants’assertion that there are 

substantial non-infringing uses for their software programs. 

Additionally, the court stated that, while the 

numerous notices of infringement that the defendants 

had received from the publishers, labels, and studios 

had given them general knowledge that some of their 

users were engaging in copyright infringement, this 

knowledge occurred only after the infringement took 

place—at a time when it was too late to do anything 

about it.That is, according to the court, the services are 

required to have the ability to stop direct infringements 

at the time they receive notice of each specific infringement; 

otherwise, they cannot be held contributorily 

liable. Moreover, in terms of the defendants’ own conduct, 

the court found not only that the defendants’ only 

affirmative act was distributing software, but also that 

they had nothing whatsoever to do with providing the 


35


infrastructure—the site and facilities—for copyright 

infringement to take place. 

The court’s mistaken findings about the defendants’ 

conduct led to it to conclude on the vicarious infringement 

claim that the defendants did not have control 

over the network on which the file-trading took place. 

According to the court, the defendants did not control 

anything other than the software, and thus, they had no 

duty to police the infringing conduct. 

Despite the adverse ruling as to the liability of these 

services, the court reaffirmed two important principles. 

First, the court expressly reaffirmed that making copyrighted 

musical works available on the services and 

making copies of those works are violations of the copyright 

laws. That is, the court recognized that individual 

users of the services are accountable for their illegal 

uploading and downloading. Second, the court made 

clear that the defendants were deriving a financial benefit 

from this illegal conduct. Indeed, even ruling the 

way it did, the court acknowledged that the defendants 

may have intentionally structured their businesses to 

avoid liability for copyright infringement, while, at the 

same time, benefiting financially from the illegal conduct 

occurring on their services. But regrettably, the 

court did not reach the conclusion that they should be 

held accountable. 

NMPA believes that the court’s decision is incorrect 

under existing law and under the facts established in 

discovery.The publishers, along with the labels and studios, 

intend to pursue a prompt appeal of this court’s 

decision to the Ninth Circuit. 

RIAA V. VERIZON 

On June 4,2003,a Federal Court of Appeals denied a 

motion by Verizon to stay a lower court ruling that had 

directed the communications company to turn over the 

names of customers accused of copyright infringement. 

The original action,brought by RIAA pursuant to the subpoena 

procedures set forth in the Digital Millennium 

Copyright Act,is currently on appeal. Verizon announced 

immediately that it would comply with the lower court’s 

direction to turn over the names, a significant victory for 

the copyright community. 

CARP REFORM 

On March 25, 2003, House Subcommittee on Courts, 

the Internet, and Intellectual Property Chairman Smith 

(R-TX) and ranking Democrat Berman (D-CA) introduced 

CARP reform legislation (H.R. 1417).The legislation 

would replace Copyright Arbitration Royalty Panels 

(“CARPs”) with a single full-time Copyright Royalty 

Judge appointed by the Librarian of Congress, but 

whose decisions shall be independent from the 

Librarian. The bill reflects the comments of NMPA and 

others before the Subcommittee during the last 

Congress (Subcommittee hearing, June 20, 2002). 

There was general agreement at a subsequent hearing 

among all witnesses that CARPs need to be replaced 

with a permanent adjudicative entity, as the legislation 

supports. There is some disagreement, however, regarding 

the number of Copyright Royalty Judges that are 

needed—with some witnesses supporting just one 

Judge and others, such as NMPA, supporting an entity 

that is comprised of several Judges. NMPA filed comments 

for the hearing record on April 8,2003 largely supporting 

the legislation. 

The Subcommittee hopes to markup the legislation 

before the Memorial Day Recess, which begins close of 

business on May 23. 

COPY PROTECTED COMPACT DISCS 

Congressmen Boucher (R-VA) and Doolittle (R-CA) 

introduced legislation, H.R. 107, “The Digital Media 

Consumers’Rights Act of 2003”,on January 17,2003. The 

bill mandates that record companies must adequately 

label copy protected compact discs, identifying the 

discs as such, as well as identifying any restrictions on 

playability or further use as a result of the protection 

technologies. Furthermore, the bill gives additional 

oversight and enforcement authority to the Federal 

Trade Commission to ensure that discs are properly 

labeled. 

The bill was jointly referred to the House Commerce 

and Judiciary Committees. 

ADVANCE NOTICE OF DIGITAL RIGHTS 

MANAGEMENT SCHEMES 

On March 24, Senator Ron Wyden introduced the 

Digital Consumer Right to Know Act (S.692) to mandate 

that digital content providers and/or distributors provide 

notice in advance of any technologies that restrict 

consumers’legitimate uses,including unlawful copying, 

of digital material. The bill instructs the Federal Trade 

Commission (FTC) to issue rules that set forth specific 

disclosure requirements of any digital rights management 

or interdiction technologies employed on distributed 

digital content. While not a companion bill to the 

Boucher bill, it is intended to provide consumers with 

similar advance warnings about any limitations on use 

and ability to manipulate the content they are purchasing. 

BSA opposes the Wyden bill. 

The bill was referred to the Senate Commerce 

Committee. There are no cosponsors at this time,nor has 

any action been planned or promised on this legislation. 

36

FAIR USE LEGISLATION 

On March 4, 2003, Congresswoman Zoe Lofgren (D- 

CA) reintroduced her fair use legislation—H.R. 1066, 

Benefit Authors Without Limiting the Advancement or 

Net Consumer Expectations Act (“BALANCE Act”).This 

bill is similar to the bill she introduced late in the 107th 

Congress (H.R. 5522) and was supported by the Digital 

Media Association. Among other things, the legislation 

(1) amends the Copyright Act’s fair use provisions to 

add “analog or digital transmissions” to the means by 

which a reproduction could be permissible under the 

fair use doctrine; (2) expands the Copyright Act’s limitation 

on exclusive rights to provide that it is not an 

infringement for lawful owners of copywritten digital 

material to “reproduce, store, adapt, or access”the material 

for archival purposes for a nonpublic display or performance 

of the material on a digital media device; (3) 

amends the Copyright Act’s first sale provision to allow 

an owner of digital material to sell and/or give away 

their copies of digital works; and (4) amends the DMCA 

anti-circumvention provisions to allow consumers to 

bypass access controls or copyright protection technologies 

to make copies. We continue to oppose this 

legislation, and the RIAA and BSA have announced 

their respective opposition to the bill. 

DISTANCE EDUCATION ACT 

The Distance Education Act was enacted by the 

107th Congress late in its 2002 legislative session, with 

the support of NMPA.The new law reflects a narrow and 

carefully balanced exemption from copyright infringement 

liability for certain public performances and displays 

of material on the Internet for use in bona fide 

class sessions, under the direction of an instructor.As a 

result of input from NMPA and others, the law does not 

permit downloads or other distribution of music or 

other materials for student use. 

SMALL WEBCASTERS LICENSING ACT 

In mid-November 2002, both houses of Congress 

passed the Small Webcasters Licensing Act, introduced 

following a Copyright Arbitration Royalty Panel (CARP) 

determination in early 2002 that webcasters are liable 

for sound recording performance royalty payments 

pursuant to the section 114 statutory license, and 

issued a proposed rate. It also ruled that liability is 

retroactive to October 1998. Webcasters opposed both 

the proposed rate and the date of liability, while record 

labels supported them. 

PAYOLA INQUIRY 

On January 28,2003,Senator Russ Feingold (D-WI) reintroduced 

his legislation of last year addressing concerns 

with anti-competitive practices of radio stations and the 

use of payola,which is similar to the bill he introduced last 

year (107th Congress).The bill is largely directed at Clear 

Channel Communications and concern with its growing 

use (or perceived use) of anticompetitive practices. 

On January 30, the Senate Commerce Committee 

held a hearing on anticompetitive practices in the radio 

and concert industries at which Senator Feingold and 

Congressman Berman testified. This hearing largely 

focused on whether consolidation of radio station 

ownership—specifically, Clear Channel—is limiting 

new artist entrants into the market and/or stemming 

equitable airplay. This hearing was the first in a series 

of planned hearings by the Commerce Committee on 

media ownership. 

ANTI-PIRACY AWARENESS CAMPAIGN 

In October 2002, NMPA, RIAA, the Motion Picture 

Association of America (MPAA) and the Songwriters 

Guild of America (SGA) joined together to launch an 

anti-Internet-piracy awareness campaign aimed at colleges, 

and to send out letters to the “Fortune 1,000” U.S. 

corporations urging them to take whatever steps are 

necessary to ensure that their networks are not being 

misused to infringe copyrighted works.The letter noted 

that piracy of music, movies and other creative works is 

taking place at a surprisingly large number of companies 

and pointed out that allowing employees to use 

corporate networks to illegally distribute copyrighted 

music and movies is no different from software piracy. 

PIRACY INQUIRIES 

The House Subcommittee on Courts,the Internet,and 

Intellectual Property has held several oversight hearings 

this year to examine piracy of copyrighted materials: (1) 

Peer-to-Peer Piracy on University Campuses (February 

26); (2) Copyright Piracy Prevention and the Broadcast 

Flag (March 6); and (3) International Copyright Piracy: 

Links to Organized Crime and Terrorism (March 13). 

While none of these hearings has resulted in the introduction 

of legislation to prevent or prohibit the unauthorized 

use of copyrighted works, key members of the 

Subcommittee are creating a strong record that supports 

our concerns about rampant piracy. In addition, key 

members appear to align with our interests and have 

expressed a willingness to actively continue the 

Subcommittee’s oversight role in this area. 


37


38 

NMPA CAPITOLCONNECT 

NMPA announced the addition to its website 

(www.nmpa.org) of “NMPA CapitolConnect,” a service 

that provides users with a more active tool for legislative 

purposes. The system allows users to not only contact 

their Representatives or Senators via e-mail,letter,phone 

call or fax,but to also view key bills and votes that NMPA 

is tracking, see pertinent biographical information on 

elected officials and view Committee and Subcommittee 

information. Also included are guides to races and candidates 

in upcoming elections; a guide to past 

Congressional votes and current bills; the ability to look 

up federal,state and local elected officials using a mailing 

address or zip code, providing photos, office locations, 

contact information,legislative staff,education,prior experience, 

voting history (U.S. Congress only) and Federal 

Electoral Commission campaign reports. 

EDUCATIONAL AND COMMUNICATIONS 

ACTIVITIES 

NMPA’s prestigious Music Publishers’ Forums marked 

their 24th year in 2002. Following the format of a series 

of panel discussions which focus on issues of interest to 

the music publishing community, the Forums are held 

several times per year in New York, Nashville, Los 

Angeles and Atlanta. 

In addition to this Survey, NMPA publishes a newsletter,“News 

& Views,”which is circulated internationally,and 

it maintains a comprehensive website,www.nmpa.org. 

NMPA 2003 BOARD OF DIRECTORS 

Irwin Z. Robinson, 

CHAIRMAN 

Famous Music Publishing 

Martin Bandier 

EMI Music Publishing 

Freddy Bienstock 

Carlin America, Inc. 

Helene Blue 

Anna Teresa Music 

Beebe Bourne 

Bourne Co. 

Arnold Broido 

Theodore Presser Company 

John Eastman 

MPL Communications, Inc. 

Nicholas Firth 

BMG Music Publishing 

Lance Freed 

Rondor Music International 

Al Gallico 

Mainstay Music 

Donna Hilley 

Sony Music Publishing 

Dean Kay 

Demi Music Corp. 

STATUTORY ROYALTY RATE INCREASE 

On January 1, 2002, the statutory mechanical royalty 

rate applicable to phonorecords made and distributed 

in the United States increased to 8.0 cents per song, or 

1.55 cents per minute of playing time—or fraction thereof—whichever 

is greater. The rate applies to all 

phonorecords made and distributed on or after January 

1,2002,regardless of the date upon which the recording 

was first released, unless other contractual arrangements 

apply. The next increase (to 8.5 cents/1.65 cents 

per minute) will take place on January 1, 2004. 

THE HARRY FOX AGENCY 

The Harry Fox Agency, Inc., the licensing subsidiary 

of The National Music Publishers’ Association, provides 

an information source, clearing house and monitoring 

service for licensing musical copyrights, and acts as 

licensing agent for more than 27,000 music publisher 

principals, who in turn represent the interests of more 

than 160,000 songwriters. 

Maxyne Lang 

Williamson Music 

Leeds Levy 

One Four Three Music, Inc. 

Evan Medow 

Windswept Holdings, LLC 

Stanley Mills 

September Music 

Jay Morgenstern 

Warner/Chappell Music 

Ralph Peer II 

peermusic

Categorization of Music 

Publishing Revenues 

APPENDIX 

A 

PERFORMANCE-BASED INCOME 

Performance-based royalties consist mainly of those 

paid for the broadcast and public performance of copyrighted 

music, within a responding territory, regardless 

of the origin of the repertoire being performed. These 

royalties are principally collected by the major performing 

rights societies: ASCAP,BMI and SESAC in the 

U.S.,for example; SACEM in France, BUMA in Holland, 

and PRS in the U.K. 

RADIO 

In the U.S., performance societies use a system of 

“sampled” survey recordings or logs detailing what has 

been played at a local station during a defined period 

and/or statistical sampling, to create payment models 

for their member affiliates. Typically, the stations are 

authorized to use copyrighted musical compositions 

under blanket licensing agreements with the collective 

administrative societies. 

RATES 

Royalty fees are calculated as a percentage of a station’s 

annual advertising revenues, and distributed by a 

weighting process, as described earlier. 

TELEVISION 

Television stations generally keep logs,or cue sheets, 

detailing the use and playtime of every musical composition 

aired.These cue sheets are forwarded to the collecting 

societies, which calculate payments according 

to usage and broadcast range (local or network). 

RATES 

Like their radio counterparts, television broadcasts 

are covered typically by blanket licensing agreements 

between the copyright owners and the stations. The 

blanket fee is typically calculated as a modest percentage 

of the stations’ annual gross advertising revenues. 

CABLE/SATELLITE TRANSMISSIONS 

Cable and satellite TV transmissions are also 

licensed by the major performing rights societies,much 

the same way that broadcast TV is licensed. Rates are 

usually determined by size of the audience (transmission 

range) and usage. 

LIVE PERFORMANCE AND RECORDED 

This category refers to recorded or live music played 

in a public place: nightclubs,bars,hotels,arenas,amusement 

parks, theaters, health clubs, etc. 

RATES 

Typically,royalty fees are set according to the type of 

venue and whether the performance is of live or recorded 

music; a wide number of other variables also help determine 

fees. For example, for a nightclub, live performance 

royalties can be determined by the club’s annual live 

entertainment costs, while in some countries, performing 

rights societies collect performance fees from theater 

exhibitors based on a percentage of box office receipts. 

NMPA INTERNATIONAL SURVEY TWELTH EDITION APPENDIX A: CATEGORIZATION OF MUSIC PUBLISHING REVENUES 

39

APPENDIX 

A 


REPRODUCTION-BASED INCOME 

Income in this category represents royalties collected 

from record companies, and others, who reproduce 

copyrighted compositions for distribution to the public. 

Royalty collections are determined by the number of 

units sold in a particular medium. The right of reproduction 

is typically an exclusive right provided under 

copyright laws subject to some variation as described 

below: 

PHONO-MECHANICAL 

Phono-mechanical royalties refer to revenues paid to 

copyright owners of musical compositions for the 

“mechanical reproduction” of those compositions on 

sound recordings (audio tapes, compact discs, records 

and other media), which are distributed to the public 

for private use. For this type of activity, copyright laws 

around the world frequently devolve this right from an 

exclusive right to a mere “right of remuneration.” 

RATES 

Terms and conditions for the mechanical reproduction 

of musical compositions are frequently determined 

by collective bargaining between the music publishing 

and recording industries. Some countries, the U.S. 

among them, make legislative provision for so-called 

“statutory” mechanical rates. Certain royalty rates are 

generally higher in Europe than in North America.In the 

U.S., the mechanical royalty rate is prescribed by legislation 

as a fixed-sum amount, or “penny rate.”In the vast 

majority of countries,however,the rates are periodically 

negotiated on a collective basis,and those rates are typically 

a percentage of the wholesale or retail-selling 

price of the recording. These collected amounts are 

then distributed on a pro rata basis among the various 

compositions contained on the recording. The most 

commonly utilized agreement is known as the BIEM- 

IFPI contract, which is renegotiated every three years. 

More than 1000 record companies throughout the 

world are signatories to this agreement. 

SYNCHRONIZATION 

Synchronization royalties are derived from the use of 

a musical composition in an audiovisual work, including: 

motion pictures, commercials, cable or broadcast 

television, satellite broadcast, video tapes, interactive 

media, etc. In these media, the musical composition is 

“synchronized”with the visual images,which appear on 

the screen. For the purposes of this survey,this category 

also includes transcription rights: the right to reproduce 

performances of a musical work in any type of electronic, 

magnetic or other non-phonogram recording for 

commercial purposes. Also included in this category 

are so-called Broadcast Mechanical royalties.The legislatures 

and case laws in some countries provide for an 

additional collection of reproduction rates, on top of 

performance rates, when the performance takes place 

through a recorded sound carrier or phonogram (rather 

than as a live performance) which was originally 

licensed for private use only. 

RATES 

Synchronization is one of the largest sources of 

income for copyright holders. Rates vary widely 

depending on a composition’s usage and importance. 

In the U.S., rates for synchronization usage are not prescribed 

by statute,but are instead negotiated in a licensing 

agreement between the copyright owner and the 

producer and specify, among other things, the number 

of compositions, playing time, the type of production 

authorized, the geographic area of such use and the 

number of years covered by the license.License fees for 

broadcast mechanical royalties are determined through 

blanket licensing agreements between broadcasters 

and societies representing copyright owners. 

40

APPENDIX 

A 

PRIVATE COPY 

While consumers in the U.S. are exempt from 

infringement liability for private, noncommercial home 

taping, under certain circumstances, songwriters and 

music publishers derive revenue from the payment of 

royalties by manufacturers and importers of digital 

audio recording hardware and blank digital media. Not 

every country represented in the survey employs a royalty 

(or levy) system, however. The majority of the 

world’s countries does not provide remuneration 

schemes for “home copying.” 

RATES 

In the U.S., royalties are collected by the Copyright 

Office and segregated into two funds.One fund is for the 

persons who own or control the copyright in the musical 

work; the other is for the copyright owners of the 

sound recording and featured performing artists. 

REPROGRAPHY 

These royalties are derived from the photocopying or 

other facsimile reproductions of musical compositions. 

As with home taping,the issue within a particular country 

is whether such “unauthorized” reproduction will 

affect the overall sales of the composition or printed 

work. In this country, the Fair Use Provisions of the U.S. 

Copyright Act permit consumers to make limited reproduction 

in certain prescribed contexts, such as scholarly 

use and criticism. Other countries take the view that, 

no matter how small or extensive the reproduction, 

unauthorized photocopying is a copyright infringement, 

and is therefore subject to a royalty payment. 

RATES 

Fees are paid to collecting societies under the terms 

of various blanket-licensing agreements with copy 

shops, libraries and other establishments, the theory 

being that much of the material being copied on these 

premises is copyrighted 

DISTRIBUTION-BASED INCOME 

Distribution income, as presented in this survey, 

includes the sale of printed music as well as the rental of 

sound recordings.The majority of countries participating 

in this survey did not report on such activities; however, 

NMPA will continue to broaden its coverage of this revenue 

category in subsequent editions of this publication. 

SALE OF PRINTED MUSIC 

Printed music covers a very broad body of work, 

from simple popular tunes to full orchestral works; sale 

prices vary with the complexity of the work. These 

works may be published individually as sheet music, or 

in a wide variety of collections or folios.The works may 

be prepared, published and/or distributed by the original 

music publisher or its authorized (i.e., licensed) 

print agent. 

RATES 

Licensing agreements are usually negotiated for a set 

period of time, typically one to five years. Royalty fees 

are negotiated between the copyright owner and the 

print agent, and are usually a percentage of the sales 

price of the score. 

RENTAL (COMMERCIAL TRANSACTIONS) 

AND PUBLIC LENDING 

These royalties are derived from the commercial or 

public (from libraries and other nonprofit institutions) 

rental of copyrighted musical compositions, typically in 

the form of sound recordings. The rental may also (or 

instead) involve the hire of orchestral scores of printed 

music for group performance. Although the collection of 

the former is typically handled by collective administrative 

societies,the latter transactions are handled by those 

music publishing specialists who maintain their own 

rental libraries of symphonies,operas,ballets and the like. 

RATES 

In the case of commercial rental of sound recordings, 

the royalty or administrative schemes are determined 

through collective bargaining among the various 

industry groups.The commercial rental of printed music 

is handled on a per-use basis, with royalty negotiations 

taking into consideration the performance audience 

and recording and/or broadcast applications. 

MISC 

Here we present royalty collections reported by 

survey respondents which do not fit into any of the 

aforementioned enumerated categories. 


41

APPENDIX 

B 

International Involvement 

NMPA works on many fronts to protect its members’interests.As 

part of the effort to build support for international copyright 

issues,NMPA is a member of several important organizations: 

NMPA INTERNATIONAL SURVEY TWELTH EDITION APPENDIX B: INTERNATIONAL INVOLVEMENT 

INTERNATIONAL CONFEDERATION OF MUSIC 

PUBLISHERS (ICMP/CIEM) 

ICMP/CIEM represents serious and popular music 

publishing in Europe and throughout the world. 

ICMP/CIEM’s constituent members are the 29 national 

music publishers’ associations active in Europe and the 

eight associations active worldwide. Through these 

national associations,ICMP/CIEM represents music publishers 

globally. 

ICMP/CIEM’s mission is to increase the level of copyright 

protection internationally, strengthen the position 

of music publishers in the negotiation of licensing terms 

for their works, improve efficiency in works management, 

create an industry forum for discussion and consolidation 

of global positions, and represent industry 

positions at international, regional and local levels. 

ICMP/CIEM’s Board is elected by the national associations 

and appoints internal and external committees 

to carry out international and regional actions to support 

copyright and to address industry issues. Because 

of the way the committees are structured, ICMP/CIEM 

maintains direct relations with companies which are 

the most representative of music publishing. 

ICMP/CIEM’s secretariat is responsible for international, 

European, regional and local coordination. 

ICMP/CIEM 

6 Rue deBourg 

1002 

Lausanne, Switzerland 

E-mail: 101374.25@compuserve.com 

Website: www.icmp-ciem.org 

THE INTERNATIONAL COPYRIGHT 

COALITION (ICC) 

ICC was established in 1992 by the NMPA as a forum 

for international music licensing organizations to 

exchange ideas and information on audio home 

recording and digital delivery. It is now a collation with 

twenty-one members operating in more than 80 countries 

and is chaired by Edward P. Murphy, President and 

CEO of NMPA. 

ICC 

C/O NMPA 

475 Park Avenue South 

New York, NY 10016 

Tel: (646) 742-1651 

Fax: (646) 742-1779 

THE INTERNATIONAL INTELLECTUAL 

PROPERTY ALLIANCE (IIPA) 

This umbrella organization of eight trade associations 

was founded in 1984. It represents over 1,100 copyrightbased 

companies in the motion picture, video game, 

book and music publishing, computer software and 

recording industries. 

IIPA was organized to stimulate and augment U.S. 

government trade policy and actions against international 

piracy, and to persuade foreign governments to 

take positive action against copyright, patent and trademark 

infringement.Among its many activities, IIPA publishes 

an annual report of “special 301” recommendations 

to the U.S.Trade Representative’s (USTR) office in 

support of the Administration’s efforts to require adequate 

and effective copyright protection, and sufficient 

market access in foreign territories for U.S. works and 

companies, as a condition of maintaining favorable 

trade relations with the United States. 

As IIPA also produces a report, Copyright Industries 

in the U.S.Economy,whose most recent edition reported 

that in 2001, the copyright industries generated more 

foreign sales and export revenues than any other industry 

sector in the United States ($89 billion), employed 

close to 5 million American workers in 2001 (3.5% of the 

U.S. workforce),and added $535 billion to the U.S.Gross 

Domestic Product (5.24% of GDP). 

IIPA 

1747 Pennsylvania Avenue NW, Suite 825 

Washington, D.C. 20006-4604 

Tel.: (202) 833-4198 

Fax: (202) 872-0546 

Website: www.iipa.com 

BUREAU INTERNATIONAL DES SOCIETES 

GERANT LES DROITS D’ENREGISTREMENT ET 

DE REPRODUCTION MECHANIQUE (BIEM) 

BIEM, a confederation of mechanical rights organizations 

from more than thirty countries, is the most 

important organization for mechanical rights protection 

throughout the world. HFA is a full voting member of 

BIEM and NMPA President and CEO Edward P.Murphy is 

a member of its Management Committee. 

BIEM is responsible for negotiating with the 

International Federation of the Phonographic Industry 

(IFPI) the terms of a general licensing system for the 

reproduction of musical works on sound recordings. 

The licensing arrangements are then administered, 

where applicable, by BIEM’s member organizations in 

their respective territories. 

42

APPENDIX 

B 

Much of BIEM’s agenda depends on negotiations for 

the renewal of the BIEM/IFPI Standard Phonogram 

Agreement, which the two organizations negotiate 

about once every four or five years. The Standard 

Agreement assures its signatories that their repertoire 

will be used under the same general terms and conditions 

in all of the territories where it is in effect, thus 

forming the basis of reciprocal agreements between 

societies. 

BIEM members are also exploring the implications 

of the digital exploitation of musical works, as well as 

the administration of so-called multimedia rights in 

certain new technologies. 

BIEM 

20/26 Boulevard du Parc 

92200 Neuilly-sur-Seine, France 

Tel: (33) 01 55 62 08 40 

Fax: (33) 01 55 62 08 41 

Website: www.biem.org/ 

NMPA is also affiliated and/or involved with: 

INTERNATIONAL CONFEDERATION 

OF SOCIETIES OF AUTHORS AND 

COMPOSERS (CISAC) 

This Paris-based organization is dedicated to protection 

of the moral, professional and economic interests 

attached to every kind of literary and artistic property. 

NMPA is an associate member of this group—the only 

music publishers’ organization represented among its 

ranks. 

On October 22, 2001, the International Organisation 

for Standardisation (ISO) announced the ratification of 

the International Standard Musical Works Code (ISWC) 

as the unique standard for the worldwide identification 

of musical works—the result of an effort led by CISAC 

since the end of 1994. 

The organization maintains a website (www.cisac.org), 

which is available in English, French and Spanish, and 

publishes a newsletter,CISAC News. 

CISAC 

20/26 Boulevard du Parc 

92200 Neuilly-sur-Seine, France 

Tel: (33) 01 55 62 08 50 

Fax: (33) 01 55 62 08 60 

Website: www.cisac.org 

THE FEDERATION OF LATIN AMERICAN MUSIC 

PUBLISHERS (FLADEM) 

Founded in Mexico in 1980, FLADEM is an umbrella 

organization that represents music publishers (and their 

local chambers) from 10 Latin American countries, as 

well as Spain and the United States. Currently, it has 

more than 90 affiliates. Its main objective is to promote 

unity in the Latin music publishing industry in order to 

better protect the rights and interests of publishers and 

songwriters wherever FLADEM is present. 

Among other services, FLADEM promotes the different 

musical repertories,and facilitates the cultural,artistic 

and technological interchange between its affiliates 

and other associations.FLADEM represents its members 

before governments and international organizations, 

acting as a consultancy entity, and also supports those 

members who propose reforms to laws in their countries 

for the benefit of songwriters and publishers. 

FLADEM 

Rio Guadalquivir No. 50-501 y 502 

Col Cuauhtemoc, Mexico, C.P. 06500 D.F. 

Tel: (52) 5 511 1488 

Fax: (52) 5 514 1803 

Website: letraymusica.com/fladem.htm 

THE WORLD INTELLECTUAL PROPERTY 

ORGANIZATION (WIPO) 

WIPO is a specialized U.N. agency headquartered in 

Geneva.With 135 member governments,WIPO is responsible 

for the promotion of intellectual property rights, 

including copyrights, throughout the world. 

WIPO’s origins reflect the international community’s 

long-standing concern about protection of intellectual 

property rights. In the 1880s, when the Paris and Berne 

Conventions were adopted, provision was made for an 

international bureau to protect literary and artistic 

works.WIPO,the modern incarnation of this bureau,was 

established in 1967 to coordinate inter-governmental 

cooperation in the field of intellectual property. 

In December 2002,the International Music Managers 

Forum (IMMF), representing 11 national Music 

Managers Forum (MMF) groups, got involved as a nongovernmental 

organization, alongside such other bodies 

as IFPI, the International Federation of Musicians, and 

international authors association CISAC, in the work of 

WIPO’s Copyright Law division. 

Since 1992, NMPA has participated in the 

Committees of Experts meetings convened by WIPO, to 

consider a Possible Protocol to the Berne Convention 

and a Possible New Instrument for the Rights of 

Performers and Producers of Phonograms,as well as the 

Diplomatic Conference in December 1996,which resulted 

in the adoption of the WIPO Copyright Treaty and the 

WIPO Performances and Programs Treaty. 

WIPO 

34, Chemin des Colombettes, 1211 Geneve 20, Switzerland 

Tel: (41) 22 730 9901 

Fax: (41) 22 733 5428 

Website: www.wipo.org/ 

NMPA INTERNATIONAL SURVEY TWELTH EDITION APPENDIX B: INTERNATIONAL INVOLVEMENT 

43

APPENDIX 

C 

U.K., JAPAN, GERMANY, FRANCE, 

CANADA, ITALY AND SPAIN UPDATES 

NMPA INTERNATIONAL SURVEY TWELTH EDITION APPENDIX C: U.K., JAPAN, GERMANY, FRANCE, CANADA, ITALY AND SPAIN UPDATES 

According to IFPI, the British music industry saw 

slight declines in 2002,down 1% in units to 278.2 

million, with a corresponding loss in value of 

2.5% to £1.191 billion ($2.86 billion). The declines, 

which ended the territory’s five-year span of growth, 

were blamed in part on discounted prices and illegal 

downloading. In addition, IFPI said that the share of 

album sales online increased from 4% to 6%. 

In March 2002,the Mechanical Copyright Protection 

Society (MCPS) and Performing Right Society (PRS) 

announced a dual license to clear mechanical and 

performing rights for most types of online music use 

with a single royalty payment.The license will be available 

for one year to U.K.-based content providers at a 

cost of 8% of annual gross revenue (a discount off the 

agreed upon 12% rate). 

MCPS also launched DVD1, a licensing policy for 

DVD-Video music products, on May 1, 2003, which 

allows producers to clear both mechanical and synchronization 

rights. MCPS maintains that its 15,000 

members have received no payments for the use of 

their works on DVD-Audio since the format’s introduction 

in 2000.The group set a DVD-Video royalty rate of 

10% of Published Price to Dealer (PPD), compared 

with a mechanical rate of about 6% for VHS music 

products and 8.5% for compact discs.BPI has criticized 

the plan’s pricing system. 

In September 2002, the U.K.’s Office of Fair Trading 

(OFT) shut down its investigation into alleged illegal 

practices by the major record companies due to lack 

of evidence. The investigation 

began in response to claims that 

the seven companies had colluded 

to discriminate against retailers 

who were trying to import 

cheaper CDs from EU territories. 

The OFT did find that some of the 

companies had made attempts to 

slow down imports from mainland 

Europe in the past, but that 

those actions had preceded passage 

of 1998’s Competition Act 

and therefore were not illegal. 

The inquiry was the sixth such 

governmental investigation in the 

past 10 years. 

A report released by lobbying 

group the National Music Council 

of the U.K. found that consumer 

spending on music is increasing 

in the U.K., up over 25% from 

1997-98 to 2000’s figure of just 

under £5 billion ($7.8 billion). 

The contribution of the music 

business to the U.K. economy in 

2000 was about £3.6 billion ($5.6 

U.K. UPDATE 

billion), an increase of some 15% from the previous 

survey. 

The Assn. of British Concert Promoters (ABCP), a 

group led by British classical-music concert promoters, 

is battling the PRS over its plan to raise the performance 

royalty rate applied to live classical concerts 

and recitals in the U.K. The PRS’ Tariff LC (Live 

Classical) stands at 4.8% of box-office receipts for ticketed 

events, and at £7.96 ($12.55) for the first 50 persons 

admitted to an event with an average admission 

charge of £5 ($7.88) or less, plus £3.98 ($6.27) per 25 

persons thereafter.The PRS plans to increase the tariff 

on an annual basis to about 7.3% by 2007,citing figures 

showing that classical promoters in France pay 8.8% of 

their box office, and in Spain and Italy, 10 percent. 

The ABCP maintains that the PRS could increase its 

fees for rock and pop performances as well. Currently 

that fee stands at 3%. The issue is now before the 

Copyright Tribunal. 

The Association of Independent Music (AIM) has 

launched the “International Internet Trial,” an initiative 

designed to ease the licensing of British independent 

music by webcasters.The program allows access to the 

repertoire of participating independent labels to non- 

U.K. based webcasters, though the specific repertoire 

will vary depending on each label’s deal in those territories. 

AIM charges 3.75% of a foreign webcaster's gross 

annual revenue or a minimum fee of $500 annually, 

whichever is greater. If the webcaster’s operating costs 

exceed $100,000 a year, the minimum 

fee will be 1% of that expenditure. 

Alternatively, webcasters 

using a small amount of U.K. independent 

music may choose to pay 

a proportion of gross revenue, 

based on the percentage share of 

U.K. independent music of the 

total repertoire played. U.S.-based 

digital-royalties collection society 

SoundExchange is handling the 

administration, reporting, and revenue 

collection during the trial, 

which will continue through 2003. 

AIM has been undertaking a similar 

initiative for U.K.-based webcasters 

since June 2000. 

AIM has also formed “Musical,” 

a consortium with nine European 

content, telecommunications, and 

technology companies—including 

Nokia, Vodafone and Greek 

music-TV channel MAD TV—to 

develop a commercial solution for 

distributing music via mobile 

phones.Funded in part by the EC’s 

44

APPENDIX 

C 

eContent program, Musical’s goals include the development 

of software technology for streaming music 

safely on wireless devices and the determination of the 

most appropriate bandwidth for handling multimedia 

content. Once trials are completed, the consortium's 

members will decide whether services should be run 

jointly or individually. 

Trade group the Alliance Against Counterfeiting 

and Piracy said in July 2002 that the British industry’s 

losses from counterfeiting and piracy fell slightly in 

2001, to more than £8.5 billion ($13.1 billion), from 

2000’s figure of nearly £9 billion ($13.9 billion).Figures 

released at the group’s annual general meeting 

revealed that in addition to an estimated 30% rise in 

Music Publishers’ 

Association (MPA) 

OFFICER: 

Chief Executive: 

Sarah Faulder 

The MPA promotes and safeguards 

the interests of British 

music publishers at the governmental 

and industry levels. It also 

raises awareness among the general 

public of the important role 

played by music publishers. These 

objectives are achieved through 

monitoring and lobbying on new 

legislation, regular and close liaison 

with industry bodies,including 

in particular the collecting societies, 

as well as a program of seminars 

and training. 

The MPA continues to develop 

its Catalog of Printed Music, available 

on CD-ROM,and to be the U.K. 

agency for administering the tendigit 

International Standard Music 

Numbers (ISMNs) for use on printed 

music. 

MPA 

3rd floor, Strandgate 

18/20 York Buildings 

London WC2N 6JU 

Tel: (44) 171-839-7779 

Fax: (44) 171-839-7776 

e-mail: info@mpaonline.co.uk 

Mechanical-Copyright 

Protection Society Ltd. 

(MCPS) and Performing 

Right Society Ltd. (PRS) 

OFFICERS: 

CEO, MCPS-PRS Alliance: 

John Hutchinson 

Executive Director, PRS: 

John Axon 

The Mechanical-Copyright Protection 

Society Ltd currently represents 

around 15,000 composers, 

songwriters and music publishers 

whenever their copyright musical 

works are recorded. Acting as an 

agent on behalf of its members, 

MCPS negotiates agreements with 

those who wish to record and distribute 

product containing copyright 

musical works.MCPS collects 

and then distributes “mechanical” 

royalties generated from the copying 

of music onto many different 

formats (CD, video, computer 

games, ringtones etc). MCPS is a 

wholly owned subsidiary of the 

Music Publishers Association. 

Distributions to members in 2001 

were £227 million. 

MCPS has formed an operational 

alliance with the Performing Rights 

Society (PRS). 

physical music piracy, the video industry’s estimated 

losses in 2001 rose by 83% to £330 million ($510 million). 

Alliance members include the British Assn. of 

Record Dealers, British Music Rights, British 

Phonographic Industry, British Video Assn., and the 

Business Software Alliance. 

In April 2003, the Official U.K. Charts Co. (OCC) 

announced it would launch the territory’s first official 

downloads chart, ranking the Top 40 downloaded 

tracks from certain legitimate websites while ignoring 

downloads on such illegal sites as Kazaa and 

Morpheus. Digital service provider OD2 was the first 

company to sign on to the project. OCC is owned by 

BPI and the British Association of Record Dealers. 

The Main Organizations of the British Music Industry Are: 

MCPS Ltd. 

29-33 Berners St 

London 

W1T 3AB 

Tel: (44) 20 7306 4230 

Fax: (44) 20 7631 8957 

website: www.mcps.co.uk 

e-mail: member.info@mcps.co.uk 

Performing Right Society Ltd. 

(PRS) 

PRS collects and distributes 

worldwide performance royalties on 

behalf of its composer and publisher 

members. The society derives 

income from the control of broadcasting 

and performing rights, issuing 

licenses to clubs, pubs, concert 

venues, etc. and to TV/radio broadcasters. 

PRS currently has around 

37,000 members and, during 2001, 

collected license income for them— 

from UK public performance and 

broadcasting,and from international 

usage—totaling £255 million. 

A quarterly newsletter, PRS 

News, is also published. 

PRS 

29-33 Berners Street 

London W1P 4AA 

Tel: (44) 20 7306 4230 

Fax: (44) 20 7631 8957 

website: www.prs.co.uk 

e-mail: info@prs.co.uk 


45

APPENDIX 

C 


British Phonographic 

Industry (BPI) 

OFFICERS: 

Executive Chairman: 

Peter Jamieson 

Director General: 

Andrew Yeates 

The British Phonographic 

Industry (BPI) has been representing 

the interests of British record 

companies for over a quarter of a 

century since being formally incorporated 

in 1973 when its principal 

aim was to fight the growing problem 

of music piracy. 

As the British music industry’s 

trade association it represent the 

views of over 300 record companies 

which together account for 

over 90% of recorded music output 

in the U.K. It meets approximately 

every two months to discuss issues 

affecting the industry. 

Fund-raising events benefit the 

BRIT School for Performing Arts 

and Technology and a music therapy 

project, among others. In addition, 

BPI stages the annual “BRIT 

Awards” show, a highlight of the 

musical year. 

BPI 

Riverside Building, County Hall 

Westminster Bridge Road 

London SE1 7JA 

Tel: (44) 20 7803 1300 

Fax: (44) 20 7803 1310 

website: www.bpi.co.uk 

e-mail: general@bpi.co.uk 

Phonographic Performance 

Ltd. (PPL) 

OFFICERS: 

Chairman: 

Fran Nevrkla 

Chief Executive: 

Charles Andrews 

Managing Director: 

John Love 

Head of Legal Affairs: 

Deborah Stones 

PPL was established in 1934 by 

the recording industry to collectively 

license the broadcast and 

public performance of sound 

recordings in the U.K. on behalf of 

record companies and performers. 

PPL’s members, in excess of 3,000, 

mainly include record companies 

and specialist repertoire producers. 

Extension of PPL’s services to 

include foreign royalty collection 

is under consideration. 

PPL has been actively campaigning 

for the International 

Standard Recording Code (ISRC) 

as the basic identifier for sound 

recordings.This is seen as the best 

way to ensure that copyright 

administration keeps pace with 

advancing technology. 

PPL has launched Royalties 

Reunited,a joint-venture with several 

performers’ rights organizations 

that allows performers and their 

advisors to search a dedicated Web 

site, royaltiesreunited.co.uk, to 

check if they have airplay royalties 

waiting for them. Performers are 

required to register their information 

to collect any monies owed. 

PPL publishes a quarterly 

newsletter, “Playback.” 

PPL 

1 Upper James Street 

London W1F 9DE 

Tel: (44) 207-534-1000 

Fax: (44) 207-534-1111 

website: www.ppluk.com 

Video Performance Ltd. 

(VPL) 

OFFICERS: 

Executive Chairman: 

Fran Nevrkla 

Consultant: 

Roger S. Drage 

Founded in 1984,VPL is the sister 

society of PPL that administers public 

performance and broadcast 

rights in music videos on behalf of 

its record company members.VPL’s 

address is the same as PPL’s,but the 

telephone number is (44) 207-534- 

1400 and the fax number is (44) 

207-534-1414. 

British Music Rights 

OFFICER: 


Frances Lowe 

British Music Rights was established 

in 1996 to promote greater 

awareness of the interests and concerns 

of British music composers, 

songwriters and publishers to U.K. 

and EU policymakers and the general 

public.The primary focus is to 

communicate an understanding of 

the rights and rewards for creativity 

in the music business; the value of 

those rights to U.K. plc; the impact 

of new technologies upon music 

creators and publishers and the 

resulting policy and legislative 

implications. 

Its member organizations are the 

British Academy of Composers and 

Songwriters, the Music Publishers 

Association, the Performing Right 

Society and the Mechanical- 

Copyright Protection Society. 

British Music Rights 

British Music House 

26 Berners Street 

London W1T 3LR 

Tel: (44) 20 7306 4446 

Fax: (44) 20 7306 4449 

website: www.bmr.org 

e-mail: britishmusic@bmr.org 

46

APPENDIX 

C 

JAPAN UPDATE 

Sales in Japan, the world’s second-largest music 

market behind the U.S., continue to decline. 

According to IFPI, in 2003 the territory lost 10.2% 

in units to fall to 312.8 million, with a corresponding 

loss of value of 9.9%, to ¥575.9 billion ($4.6 billion). 

IFPI noted that Japan has continued to suffer from 

internet piracy and CD burning,and estimated that 236 

million CD-Rs were burned in the territory in 2002, 

while legitimate CD sales were 229 million. 

Copyright fee collections by the Japanese Society for 

Rights of Authors, Composers and Publishers (JASRAC) 

for the year ending March 31, 2002, decreased by 1% to 

¥105.3 billion ($793.9 million), due mainly to lower 

mechanical royalty collections. Performance rights collections 

increased 6.9% to ¥40.5 billion ($305.3 million) 

in the year,while mechanical royalties fell 8.8% to ¥48.4 

billion ($365.1 million). JASRAC’s collections for the 

year also included ¥2 billion ($15 million) in fees from 

publications,down 25.5%;¥4 billion ($30 million),down 

3.1%, in fees from CD and video rentals; ¥9.3 billion 

($70.2 million), up 23.5%, in “compound use” income 

from online karaoke service operators and downloadable 

ringing tones; and ¥1.1 billion ($8.3 million), up 

4.3%, in home-copying compensation fees from makers 

of digital-recording hardware and software. 

JASRAC also noted that during the year it had introduced 

an Internet-based copyright management system 

and is now working toward setting up a digital database 

of works administered by JASRAC. 

The Recording Industry Assn. of Japan (RIAJ) and 

(JASRAC) announced the results of a series of tests 

they said prove that electronic watermarking technology 

can be used effectively in copyright management, 

including the ability to successfully track watermarkembedded 

CD audio files that had been converted 

into MP3 files and uploaded to the Internet using 

JASRAC’s J-MUSE song-tracking system. Watermarking 

technology from four different companies was used in 

the tests. The RIAJ and JASRAC have been working 

together to investigate the practicality of watermarking 

technology since the end of 2001, when they created 

the Audio Watermarking Technology Investigation 

Consortium. 

RIAJ chairman Isamu Tomitsuka resigned from his 

post after three years on March 1, 2003, citing health 

reasons. His replacement, Tom Yoda—who also serves 

as chairman of label Avex,will serve out the remainder 

of Tomitsuka’s second two-year term, which ends in 

May 2004.Yoda has promised to work on extending the 

copyright term for sound recordings: currently sound 

recordings are protected for 50 years,while the protection 

period for motion pictures was recently extended 

from 50 to 70 years. 

In January 2003, the RIAJ and 13 of its member 

record companies settled their case against digital 

broadcaster Daiichikosyo Co., Ltd., operator of the 

StarDigio digital music broadcasting service.RIAJ sued 

the service in 1998,alleging that StarDigio’s practices of 

playing entire albums in digital form and pre-announcing 

those albums encouraged users to make perfect, 

permanent copies rather than purchasing the albums. 

Under the terms of the settlement, StarDigio can no 

longer pre-announce the start or end times of the 

tracks to be broadcast, and cannot broadcast entire 

albums within an agreed period after their release. 

The findings were announced a few months after 

the release of an RIAJ study that found music in Japan 

being copied onto CD-R and rewritable (CD-RW) discs 

at a rate of 236 million discs a year. The survey, which 

polled 1,000 people from high-school age to their mid- 

50s, found about 66% of respondents saying they had 

made personal recordings over a six month period, 

compared with 53% who purchased new CDs; that 48% 

of the CD-R/RWs sold in Japan are used to make copies 

of prerecorded music; and that over 40% of the CDs 

that were copied onto CD-Rs had been rented. 

The RIAJ released another study in May 2002, 

reporting that about 75 million music files had been 

downloaded—most illegally—in the country since filesharing 

services started becoming popular in the last 

two to three years. 

To combat the increase in unauthorized online filesharing 

and CD-R copying, several labels, led by 

Japanese independent Avex,began releasing copy-protected 

CDs throughout 2002. The other labels include 

Warner Music Japan,Toshiba-EMI,Universal Music K.K., 

Pony Canyon, Zomba Records, Victor Entertainment, 

and Sony Music Entertainment (Japan).The RIAJ introduced 

voluntary standardized stickers to alert consumers 

to the limits of the CDs they were purchasing, 

enumerating the types of devices on which the discs 

can be played. 

On Jan. 29, 2003, the Tokyo District Court ruled that 

MMO Japan, which had been distributing a Japaneselanguage 

version of the File Rogue file-sharing software, 

had violated the copyrights of the members of 

JASRAC and of the RIAJ. In Japan’s first-ever legal 

action against an online file-sharing music service, the 

RIAJ and JASRAC sued MMO Japan in February 2002 

and were granted a preliminary injunction against the 

company, which caused it to suspend operations in 

April 2002. It was the first-ever legal action against an 

online file-sharing music service in Japan. Damages 

have yet to be determined, and MMO Japan has maintained 

it will appeal the final decision. 

In October 2002, the Tokyo High Court upheld a 

May 1999 ruling by the Tokyo District Court that found 

three companies guilty of illegally importing and selling 

CDs and cassettes of material originally recorded 

by Japanese artists in the 1930s and ‘40s. The defendants—Tokyo-based 

importers/labels ARC and FIC and 

Osaka-based mail-order company Soutsu—were 

ordered to stop importing and selling the material, to 

dispose of existing stock, and to pay five record labels 

a total of ¥410 million ($51 million) in compensation 

for the 480,000 units already sold. 


47

APPENDIX 

C 

The Main Organizations of the Japanese Music Industry Are: 


48 

Japanese Society for Rights 

of Authors, Composers and 

Publishers (JASRAC) 

OFFICERS: 

Chairman: 

Tetsuro Hoshino 

President: 

Shigeru Yoshida 

JASRAC administers nondramatic 

performing, broadcasting, 

cable transmission, mechanical 

reproduction, synchronization and 

distribution rights in musical 

works. The society’s headquarters 

are in Tokyo,and it has twenty-three 

regional licensing offices throughout 

the country. 

JASRAC also manages domestic 

and international music copyrights 

under agreements with ninety-one 

copyright societies in sixty-seven 

countries. 

JASRAC 

3-6-12, Uehara 

Shibuya-ku, Tokyo 151-0064 

JAPAN 

Tel.: (81) 3 3481 2121 

Fax: (81) 3 3481 2150 

Website: www.jasrac.or.jp/ejhp 

Music Publishers’ 

Association of Japan (MPA) 

OFFICER: 

Chairwoman: 

Misa Watanabe 

Music Publishers’Association of 

Japan (MPAJ) was formed in 1973 

under the Ministry of Education, 

Culture, Sports, Science and 

Technology of Japan (MEXT). 

Present membership counts 

approximately 260 publishers. 

Since MPAJ is the sole organization 

to represent the Japanese music 

publishing business, most major 

publishers are its members. The 

group also represents record producers' 

interests to a certain 

extent, since many of its member 

publishers undertake record productions 

and hold master rights. 

MPA 

4th floor, Deim Aoyama Building 

2-27-25 Minami-Aoyama 

Minato-ku, Tokyo 107-0062 

JAPAN 

Tel.: (81) 3 3403 9141 

Fax: (81) 3 3403 9140 

Website: www.mpaj.or.jp/ 

Recording Industry 

Association of Japan (RIAJ) 

OFFICER: 

Chairman: 

Tom Yoda 

The Recording Industry 

Association of Japan (RIAJ) conducts 

a variety of activities with the 

goal of contributing to the growth 

of Japan’s musical culture, and of 

working to strengthen the interests 

of record producers by maintaining 

a healthy creation cycle for 

music. 

Under the 1971 and 1985 designation 

of the commissioner of the 

Agency for the Cultural Affairs 

issued in line with the Copyright 

Law,the RIAJ has collected and distributed 

secondary use fees 

(broadcasting fees) for commercial 

records and remuneration for 

the renting of commercial records 

under the mandate of record producers. 

Moreover, as a founding 

member of the Society for the 

Administration of Remuneration 

for Audio Home Recording in 1993 

and the Society for the 

Administration of Remuneration 

for Video Home Recording in 1999, 

the RIAJ receives compensation 

from both societies and distributes 

the monies to record producers. 

RIAJ 

Nittetsu Kobiki Building 

7-16-13 Ginza 

Chuo-ku, Tokyo 104-0061 

JAPAN 

Tel.: (81) 3 3541 4411 

Fax: (81) 3 3541 4460 

Website: www.riaj.or.jp/ 

GEIDANKYO 

Japan Council of Performers’ 

Organizations 

OFFICER: 

President: 

Man Nomura 

Geidankyo is a nonprofit public 

organization representing several 

Japanese organizations for professional 

performing artists in various 

fields. Its major objectives are to 

improve the working conditions 

and protect the rights and welfare 

of performing artists, as well as to 

promote the performing arts 

throughout Japanese society. 

Geidankyo was established on 

December 7, 1965 as a federation 

of 21 performers' organizations. 

Since then the group has developed 

into an organization representing 

61 regular member organizations 

with a total membership of 

more than 56,000. 

GEIDANKYO 

Tokyo Opera City 

Tower 11F 

Nishi-Shinjuku, 

Shinjuku-ku, Tokyo 163-1466 

JAPAN 

Tel.: (81) 3 5353 6600 

Fax: (81) 3 5353 6614

APPENDIX 

C 

GERMANY UPDATE 

The German market continues to slump, recording 

a fifth consecutive year of decline. According to 

IFPI, the German market fell by 4% in units to 

240.2 million in 2002, with a corresponding loss in 

value of 10.3% to i2.11 billion ($1.99 billion). The 

Federal Assn. of the Phonographic Industry (BPW) 

places most of the blame for the slump on piracy, 

though it notes that increased consumer spending on 

other avenues of entertainment, including mobile 

phones and video games, has also taken a toll. 

Germany has now been overtaken by France as the 

world’s fourth-largest music market, according to IFPI 

in 2003. 

Meanwhile, rights society Gesellschaft fur 

Musikalische Auffurhrungs und Mechanische 

Vevielfaltigungreschte (GEMA) reported total income 

for 2002 of i800 million ($833 million), unchanged 

from 2001. 

In April 2003, the BPW released statistics showing 

that the nation’s consumers used 260 million CD-Rs to 

copy music in 2002—100 million more units than the 

number of prerecorded CDs sold in the country during 

the same period. According to the group’s figures, 486 

million CD-Rs were sold in Germany in 2002, with an 

estimated 53% used to burn music files, representing a 

42% increase in CD-R music copying over 2001. The 

report was prepared by market researcher Gesellschaft 

fur Konsumforschung, based on a representative study 

on a survey of 10,000 people in 2002. 

According to the report, 622 million songs were 

downloaded in Germany in 2002 from almost exclusively 

illegal sources on the Internet, compared with 

492 million tracks in 2001. 

German music executives have lobbied extensively 

for the government to pass new laws to stop music 

piracy, and have called for the institution of an airplay 

quota of at least 50% domestic repertoire in an effort to 

force radio to play new releases. Minister of Culture 

Christina Weiss has pledged support for such a quota, 

which was promised by her predecessor, Julian Nida- 

Rümelin,at the 2002 edition of the trade fair Popkomm. 

In April 2003, the country’s federal parliament 

passed the European Union Copyright Directive. Many 

in the German music industry believe the Directive’s 

anti-piracy provisions will make a dramatic difference 

in the country’s sales landscape. 

German retailers have also made their voices 

heard, with the 100,000-member Hauptverband des 

Deutschen Einzelhandels (HDE) calling for the newly 

re-elected SPD/Green coalition government to help 

stimulate consumer spending by allowing record 

shops to stay open as long as they wish during the 

week, and until 6 p.m. on Saturdays. Currently all businesses 

are required to close by 8 p.m.during the week, 

by 4 p.m. on Saturdays and to remain closed on 

Sundays. Only retailers operating in airports, railway 

and bus stations, or recognized tourist zones are 

exempt from the restrictions. 

A German Patent Office mediator has asked personal-computer 

makers to pay copyright owners i12 

($13) for every new PC they sell as compensation for 

private digital copying. PC industry representatives 

indicated they would challenge the recommendation. 

Germany is the first country in Europe where a collecting 

society has attempted to impose a copyright 

levy on new PCs. Collecting societies also are trying to 

impose levies on the sale of printers, scanners and 

other devices that can be used to make digital copies. 

European consumer organizations have been fighting 

the levies on the grounds that they raise prices and 

are based on a hard-to-prove assumption that people 

are using computers to copy protected works. An official 

with Bitkom, an organization representing 1,300 

information-technology companies in Germany, was 

quoted as saying the recommendation would cost the 

country's consumers an extra 70 million a year. 

BMG,Warner, and Universal have taken a joint 51% 

stake in German chart company Media Control's Chart- 

Radio, which claims to be Europe's largest licensed 

web music portal. Chart-Radio, which has 650,000 registered 

users and receives 2.19 million page impressions 

per month, offers 11,000 tracks, including prereleases, 

provided by record companies. 

In the meantime, the German music industry was 

reported to be finalizing terms for its own communal 

platform for music downloads.Plans reportedly call for 

a mid-2003 launch of a portal that would initially serve 

as a business-to-business platform for music dealers 

and online services. Negotiations were said to be 

underway with several providers, including Deutsche 

Telecom, over who should provide the technical infrastructure 

of the platform. 

The mayor of Berlin released figures indicating that 

the music business is the fastest-growing entertainment 

sector in that city,with businesses in Berlin accounting 

for over 50% of total German music revenues. The 

mayor’s office said the city—which is home to three 

major record companies, about 50 independents, 90 

music publishers, 50 recording studios, and 250 

clubs—would generate revenues of more than i1 billion 

($973 million) in 2002. 


49

APPENDIX 

C 

The Main Organizations of the German Music Industry Are: 


Deutscher Musikverleger- 

Verband e.V. (DMV) 

OFFICERS: 

President: 

Dagmar Sikorski-Grossmann 

Vice President: 

Karl-Heinz Klempnow 

The DMV is an umbrella organization 

for over 400 music publishers 

in Germany, acting as a service 

provider for its members,upholding 

their interests before authorities, 

institutions and organizations in the 

worldwide music market and doing 

essential public relations work on 

all topics currently affecting the 

music market. 

The various issues are dealt 

with in a total of nine expert committees, 

including the GEMA committee, 

which deals with all questions 

of collective exercise of copyright 

and intellectual property 

rights; the legal committee, which 

regularly adapts multilingual contracts 

to current developments in 

the national and international 

music business; the committee for 

rights of use, which has prepared 

the standard reference work,“DMV- 

Erfahrungsregeln,” which indicates 

appropriate royalty fees and condenses 

the experience gained from 

ongoing evaluation of royalty contracts 

covering advertising, film, 

video, online, copying and other 

services undertaken directly by 

music publishers; and the expert 

committee for commercial and 

social questions, which covers tax 

law and electronic ordering. 

Other DMV committees deal 

with specific issues of classical, 

light and choral music and with 

thematic areas such as recording, 

radio and television. 

The DMV regularly joins forces 

with the national association of 

specialist music retailers, the 

Gesamtverband Deutscher Musikfachgeschäfte,to 

award the German 

Music Prize to outstanding artists.In 

addition, the DMV annually awards 

its “Deutscher Musikeditions-Preis” 

to printed music editions and music 

books for exceptional editorial 

achievement. The German Music 

Edition Prize will be awarded from 

next year onwards during the 

Frankfurt Music Fair, so that visitors 

to the trade fair will have the 

opportunity to see at first hand the 

range of editions offered by publishers. 

Deutscher Musikverleger-Verband 

Friedrich-Wilhelm-Str. 31 

53113 Bonn, GERMANY 

Tel: (49) 228 5 39 700 

Fax: (49) 228 5 39 70 70 

Email: dmv@musikverbaende.de 

Internet: www.dmv-online.com 

Gesellschaft fur Musikalische 

Auffurhrungs und 

Mechanische 

Vevielfaltigungreschte 

(GEMA) 

OFFICER: 

President/CEO: 

Dr. Reinhold Kreile 

GEMA is a successor to an 

organization founded in 1903 by 

Richard Strauss. GEMA administers 

nondramatic performing, broadcasting, 

cable retransmission, 

mechanical reproduction,synchronization, 

and distribution rights in 

musical works. 

GEMA has dual headquarters in 

Munich and Berlin as well as ten 

regional offices around the country. 

As no other music societies 

exist in Germany, GEMA enjoys de 

facto monopoly status,and submits 

to state regulation by the German 

Patent Office. GEMA maintains that 

its monopoly status confers certain 

advantages for users of musical 

works, as musical repertoire is 

received from one source, without 

bureaucratic formalities and at calculable 

cost savings.It says that this 

aspect will assume even more 

importance in the multimedia and 

digital age. 

To reflect its membership, 

GEMA’s management board is 

made up of six composers, five 

publishers and four lyricists. Board 

membership is also open to the 

music publishing arms of record 

companies. 

GEMA’s main sources of revenue 

are its performance rights,mechanical 

rights and broadcasting rights 

collections. 

GEMA maintains relationships 

with all the leading mechanical 

rights and performing rights societies 

around the world, and works 

closely with NMPA and HFA. It is a 

member of BIEM, CISAC, and 

GESAC, the European authors’ 

society. 

GEMA 

Head Office Munich 

Rosenheimer Strasse 11 

81667 Munich, Germany 

Tel: (49) 89 4 80 03 00 

Fax: (49) 89 4 80 03-969 

Head Office Berlin 

Bayreuther Strasse 37 

10787 Berlin, Germany 

Tel: (49) 30 2 12 45-00 

Fax: (49) 30 2 12 45-950 

Website: www.gema.de 

e-mail: gema@gema.de 

50

APPENDIX 

C 

FRANCE UPDATE 

Bucking trends across Europe, the French music 

market posted positive gains for 2002.According 

to IFPI figures,the country’s market grew by 2.5% 

in units to 176.4 million, with a corresponding rise in 

value of 3.5% to i2.11 billion ($1.99 billion). Increases 

in album sales—from 122.8 million to 125.7 million— 

and a maintaining of the popularity of local repertoire 

at around 58% were cited as factors in the growth for 

the world’s fourth largest market, which grew for the 

third consecutive year. 

The French government’s call for a lower rate of VAT 

(value-added tax, or sales tax) on prerecorded music 

has received some support from other governments 

and music-industry representatives across the EU. In a 

Nov. 11, 2002 speech to the Council of the EU in 

Brussels, French minister of culture and communication 

Jean-Jacques Aillagon announced the appointment 

of former minister of culture François Léotard 

who in 1987 was instrumental in lowering France’s VAT 

rate from 33.33% to 21% as the country’s envoy to the 

European Commission (EC) and EU member states, 

promoting France’s position on VAT. A VAT reduction 

would require the unanimous agreement of all 15 EU 

members. Aillagon maintains that a VAT reduction 

potentially could bring CD prices in Europe below the 

i15 ($15.12) mark, thus sparking higher sales. 

The issue first took on greater importance on July 24, 

2002, when the French government made an official 

request to the European commissioner responsible for 

tax affairs for prerecorded music to be registered in 

Appendix H of the EU’s existing VAT Directive,due to be 

revised in 2003. Goods or services on Appendix H are 

eligible for a reduced VAT rate, although each member 

state is allowed to decide on its own whether or not to 

apply the lower rate. 

SACEM 

OFFICER: 

Chairman: 

Bernard Miyet 

The Societe des Auteurs, 

Compositeurs et Editeurs de 

Musique (SACEM) is an association 

administered by music creators 

and publishers. Its board of 

directors is composed of six 

authors,six composers,one authordirector 

and six publishers. 

SACEM 

225 Avenue Charles de Gaulle 

92528 Neuilly-sur-Seine Cedex, France 

Tel.: (33) 1 47 15 47 15 

Fax: (33) 1 47 45 12 94 

Website: www.sacem.fr 

In April 2003, leading French music retailer FNAC 

launched a high-profile European campaign in support 

of a lower VAT rate on recorded music,inviting customers 

to its stores in France, Belgium, Spain, Italy and Portugal 

to sign a petition that will be sent to the European 

Commission in Brussels in June. FNAC stores also 

planned to discount some new releases by an amount 

that would approximate the release’s price with a lower 

VAT rate,with FNAC absorbing the difference in prices. 

Just before France’s 2002 presidential elections, 

SNEP published “Proposals in Favor of the 

Development of the Music Industry,” a manifesto 

designed to emphasize areas where the group maintained 

the government should be aiding the music 

industry. Among the document’s suggestions were the 

creation of a TV music channel with a high share of 

French music and new French talent; an increase of 

music programming on existing public TV channels; a 

change in broadcasting legislation to allow a greater 

diversity in the repertoire played on radio and TV; and 

increased anti-piracy efforts both in the physical marketplace 

and on the Internet. 

In the meantime,music channels will be prominently 

featured on the country’s new terrestrial digital-TV 

platform, due to be launched at the end of 2004. 

Broadcasting agency CSA allotted slots on the free digital 

service to 16 channels, including two music channels: 

iMCM and RTL’s M6 Music.French radio group NRJ also 

received a slot for its NRJ TV, whose programming is 

50% music. 

French independent labels body UPFI has said it will 

oppose any merger affecting the current five major 

record companies. UPFI and independent group 

Impala’s vociferous opposition to proposed Warner/EMI 

and BMG/EMI mergers in 2000 helped block those deals. 

The Main Organizations of the French Music Industry Are: 

SNEP 

OFFICER: 


Herve Rony 

The Syndicat National de 

l’Edition Phonographique is the 

official organization of the recording 

industry. 

SNEP 

27 rue du Docteur Lancereaux 

75008 Paris, France 

Tel.: (33) 1 44 13 66 66 

Fax: (33) 1 53 76 07 33 

Website: 

www.disqueenfrance.com/snep 


51

APPENDIX 

C 


SDRM 

OFFICER: 

General Manager: 

Thierry Desurmont 

The Society for the Administration 

of Mechanical Reproduction 

Rights for Authors,Composers and 

The Canadian music industry continues to slump. 

According to IFPI figures, the nation’s music market 

declined by 9.6% in units to 62.7 million, with 

a corresponding loss in value of 9.6% to C$1.02 billion 

($651.3 million).The industry could take pride,however, 

in the international breakouts of such acts as Avril 

Lavigne, Nickelback, Great Big Sea and Sum 41, with 

continued strong sales from such veterans as Shania 

Twain and Celine Dion. 

In February 2003 came word that about $6.8 million 

raised from a levy on blank CDs and cassettes had 

been issued by the Canadian Private Copying 

Collective (CPCC) to organizations representing 

Canadian composers, performers, publishers and 

record companies. The payment is the first in an estimated 

C$28 million disbursement that is scheduled to 

be completed by the end of 2003.The initial payment 

was made at approximately the same time the CPCC 

was lobbying the Canadian Copyright Board (CCB) for 

significant increases in the levies and an extension of 

the levy to computer hard drives, MP3 players, mobile 

phones and other media. If those levies are granted, 

copyright owners could collectively be receiving up to 

C$120 million a year by mid-decade. 

Record companies have maintained they need the 

levy to recoup some of the losses from file-sharing and 

copying. 

The CPCC, a non-profit umbrella organization of 

songwriters, performers, record companies and music 

publishers,was created in 1999 to collect private copying 

royalties from consumers downloading music onto 

blank media.In December of that year,the CCB agreed 

that the CPCC could collect a levy of 23.3 cents on any 

blank cassette of 40 minutes duration manufactured 

(or imported) and sold in Canada, as well as 5.2 cents 

on CD-Recordable and ReWritable discs and 60.8 

cents on MiniDiscs. (All rates in Canadian dollars). 

However,in 2000,the CPCC discovered that the supply 

and use of blank CDs in particular were much larger and 

“much more complex” than originally anticipated, and 

applied to the CCB for an adjustment in its tariffs for 2001 

and 2002.The board agreed, for 2001-2002, to raise the 

tariffs on CD-Rs, MiniDiscs and blank cassettes to, 

respectively, 21 cents, 77 cents and 29 cents.As a result, 

the CPCC collected C$23.2 million in 2001—a 450% 

increase over the C$5 million collected for distribution 

in 2000. 

Publishers was founded in 1935 to 

act on behalf of its associate member 

societies. 

SDRM authorizes mechanical 

reproduction of members’ works on 

audio or video recordings, by radio 

or television, sets the conditions for 

such licensing,and collects and distributes 

those corresponding rights. 

CANADA UPDATE 

SDRM is administered by a 

Board of Directors comprised of 

nineteen members appointed by 

the associate members of a period 

of one year. 

SDRM can be contacted via 

SACEM. 

The Society of Composers, Authors and Music 

Publishers of Canada (SOCAN) has asked the CCB to 

approve a rate of 2.1% applicable to commercial TV 

stations’advertising revenues,a move that would return 

the royalty paid to composers,authors and music publishers 

for the use of their work to a rate that was in 

place for over 15 years before a 1998 Copyright Board 

decision.That ruling lowered the rate to 1.8%.SOCAN is 

also seeking the removal of the “modified blanket 

license” approved by the CCB in 1997, which allows 

broadcasters to reduce the tariff rate by negotiating 

and obtaining performing rights directly from music 

creators. 

Furthermore, SOCAN is seeking changes in Tariff 

17.A to reflect the increased audiences and revenues 

enjoyed by Canadian and U.S. specialty services, 

requesting a move from the current 15.5 cents per subscriber 

to 18.6 cents in 2001, 23 cents in 2002 and 42 

cents in 2003.Tariff 17.A currently requires the specialty 

services to pay SOCAN a rate of 1.8% of the affiliation 

payments they pay to the cable, satellite or digital services 

distributing their programming.SOCAN is seeking a 

new rate of 2.4%. 

Canadian Recording Industry Association (CRIA) 

has been negotiating an On-line Licensing Agreement 

for competing U.S.-based digital-music services 

Pressplay and Musicnet,alongside the songwriters and 

publishers represented by the Canadian Music 

Reproduction Rights Agency (CMRRA). A deal would 

allow for the launching of the two digital subscription 

services in Canada, possibly by spring 2003. 

Independent labels have expressed concern that they 

would have difficulty competing with the major-affiliated 

online services. 

CRIA has also launched a national campaign to 

educate consumers about the negative effects that CD 

burning and unlicensed downloading of music have 

on the music business. The campaign, “The Value of 

Music,”includes a widespread media initiative,including 

the launching of a website. CRIA has committed $1.2 

million for its campaign and has lobbied several other 

music industry organizations for their financial support. 

The unlicensed downloading of music is not 

viewed in the same strict copyright law terms as it is in 

the U.S. An exemption in the Copyright Act of Canada 

legalizes home taping for personal use, with the proviso 

that it is illegal for a person to load a CD-R with MP3 

52

APPENDIX 

C 

or sound recording files,or to make straight disc-to-disc 

copies, and sell them. 

However, in May 2002, Canada’s Federal Court of 

Appeal in Ottawa ruled that Internet service providers 

generally act as “common carriers,” but if they act as 

more than “passive providers” (by storing or “caching” 

music on their servers),they can be held responsible for 

paying music-copyright royalties.The ruling overturned 

a 1999 decision by the federal government's Canadian 

Copyright Board in which the Internet was deemed a 

means of communication for purposes of Canadian 

copyright law only if the server is located in Canada. 

Meanwhile, the Canadian government’s Copyright 

Board has ruled on royalties to be collected from commercial 

radio stations for making temporary or 

“ephemeral”copies of programs of music for later use. 

The payments, to be collected by the Canadian 

Musical Reproduction Rights Agency (CMRRA) and 

the Society For Reproduction Rights of Authors, 

Composers, and Publishers (SODRAC), are retroactive 

to January 2001. Under the two-tier tariff structure, a 

low-use station (defined as one that airs music for less 

than 20% of its total broadcast time) will pay 0.12% of 

its first C$625,000 in gross income each year, 0.23% of 

Canadian Music Publishers’ 

Association (CMPA) 

OFFICERS: 

Executive Director: 

David A. Basskin 

Founded in 1949, CMPA is a 

trade association composed of all 

the multinational, as well as many 

of the independent, music publishers 

in Canada. Membership is 

divided into two categories: active 

membership and associate membership, 

intended for those whose 

music publishing activity is infrequent. 

CMPA’s ten-member Executive 

Committee is elected annually by 

all the association’s members, with 

all votes receiving equal weight. 

For most of the past twenty 

years, CMPA’s activities have been 

limited largely to lobbying the 

Canadian government for improvements 

to copyright legislation. 

These efforts have resulted in the 

“Phase I” package of amendments 

to the Copyright Act of 1988 and 

“Phase II”in 1997. 

The Phase I package eliminated 

the sixty-four-year-old two cent 

statutory mechanical license, 

allowing for direct negotiation of 

the rates, terms and conditions of 

mechanical licensing between 

CMRRA and the record industry. 

The Phase II package included the 

creation of a levy on the sale of 

blank recording media, which will 

start to generate income for music 

publishers,authors,performers and 

record producers this year. 

Presently the CMPA is working 

to encourage the government to 

pass legislation implementing the 

1996 WIPO treaties, which Canada 

signed in 1997. CMPA is also closely 

involved in other policy areas 

affecting publishers, including 

trade law, electronic commerce 

and broadcasting regulation. 

CMPA’s Executive Committee 

has also formed a subcommittee to 

focus on the development of conferences, 

training programs and 

better communications between 

the association, its members and 

prospective members,government, 

industry and the public at large. 

its next C$625,000 in gross income, and 0.35% of any 

additional income in the year. Any other station will 

make similar payments of 0.27%, 0.53%, and 0.8%. The 

ruling stems from a revision to Canada’s Copyright Act 

in 1997 that allows for such royalties. 

The Canadian Association of Broadcasters (CAB) 

has expressed its disappointment with the ruling, estimating 

the annual impact on its sector to be about 

C$6.5 million ($4.4 million). CAB had been seeking an 

exemption to ephemeral rights, and said it might 

appeal the decision. 

The Canadian government has also not yet ratified 

the two World Intellectual Property Organization 

(WIPO) treaties, the Performances and Phonogram 

Treaty and the Copyright Treaty. CRIA maintains that 

such failure to ratify the treaties, which were signed in 

1997, weakens Canada’s domestic music industry. 

Also, Jody Scotchmer has been named the first 

executive director of the Canadian Songwriters Hall of 

Fame in Toronto. The Hall of Fame was launched in 

1999 by the Canadian Music Publishers Assn. and the 

Songwriters Assn. of Canada. 

The Main Organizations of the Canadian Music Industry Are: 

CMPA 

56 Wellesley Street West 

Suite 320 

Toronto, ON Canada 

M5S 2S3 

Tel: 416-926-1966 

Fax: 416-926-7521 

Email: inquiries@cmrra.ca 

Canadian Musical 

Reproduction Rights Agency 

Ltd. (CMRRA) 

OFFICERS: 

President: 

David A. Basskin 

Vice President: 

Fred Merritt 

The Canadian Musical Reproduction 

Rights Agency Ltd.(CMRRA) is a 

non-profit music licensing agency 

representing the vast majority of 

music copyright owners in Canada. 

Founded in 1975 by a group of 

Canadian music publishers, the 

CMRRA was involved with the fight 


53

APPENDIX 

C 


to eliminate the sixty-four-year-old 

compulsory license from Canada’s 

copyright laws in 1988, and has 

since negotiated with the record 

industry to strengthen its publishers’ 

rights and greatly increase 

mechanical and synchronization 

licensing revenue. 

CMRRA is funded by commission 

on the proceeds of its licensing. 

Membership is open to any 

music publisher or copyright 

owner with respect to the 

Canadian use of the reproduction 

right in its music. 

CMRRA is a subsidiary of CMPA, 

and the shares in CMRRA are held 

in trust for the members of CMPA 

by a trustee. CMRRA’s Board of 

Directors is elected every two years 

by CMPA members, with active 

CMPA members’ votes receiving 

four times the weight of associate 

members’ votes. 

CMRRA’s address, telephone 

and fax are the same as that of the 

CMPA.The organization’s website is 

www.cmrra.ca. 

56 Wellesley St. W. #320 

Toronto, Ontario CANADA 

M5S 2S3 

Tel: 416-926-1966 

Fax: 416-926-7521 

Society of Composers, 

Authors and Music 

Publishers of 

Canada/Société canadienne 

des auteurs, compositeurs et 

éditeurs de musique 

(SOCAN) 

OFFICERS: 

CEO: 

André LeBel 

President: 

Gilles Valiquette 

SOCAN is a performing rights 

society representing Canadian 

composers, lyricists, songwriters 

and music publishers. It licenses 

the public performance and communication 

of the world’s repertoire 

of copyright musical works in 

Canada. Royalties collected are 

distributed to members and international 

affiliated societies. It also 

distributes the royalties received 

from affiliated international societies 

for the public performance of 

Canadian musical works around 

the world. 

SOCAN was formed in 1990 

when two previous Canadian 

performing rights societies—Composers, 

Authors and Publishers 

Association of Canada (CAPAC) 

and the Performing Rights 

Organization of Canada (PROCAN), 

merged their operations to form a 

single entity. 

Prior to 1990 both CAPAC and 

PROCAN had separate offices in 

Vancouver and Montreal.These were 

merged into new SOCAN locations 

in 1990. Offices are also located in 

Edmonton, Alberta and Dartmouth, 

Nova Scotia. In March1991, the 

Toronto staff moved into the new 

Head Office in Don Mills,Ontario. 

The society is governed by a 

board whose eighteen members— 

nine composers/lyricists/songwriters 

and nine music publishers— 

are elected every three years. 

SOCAN sponsors annual awards 

presentations for English and 

French language Canadian composers, 

lyricists, songwriters and 

music publishers and also offers 

seminars and workshops across the 

country. 

The SOCAN Foundation sponsors 

the Gordon F. Henderson/SOCAN 

Copyright Competition, designed 

to encourage Canadian law students 

to study copyright law as it 

affects music, both in a national 

and international context. The 

Society also sponsors the SOCAN 

Awards for Young Composers,open 

to Canadian classical music composers 

under thirty years of age. 

SOCAN publishes a bi-monthly 

magazine, Words & Music/Paroles 

& Musique. 

SOCAN 

41 Valleybrook Dr 

Toronto, Ontario 

M3B 2S6 

Tel: 416-445-8700, 1-800-55 SOCAN 

Fax: 416-445-7108 

Website: www.socan.ca 

54

APPENDIX 

C 

Societe du Droit de 

Reproduction des Auteurs, 

Compositeurs et Editeurs au 

Canada (SODRAC) 

OFFICERS: 

Chairman: 

Paul Baillargeon 

General Manager: 

Alain Lauzon 

SODRAC collects reproduction 

rights for authors, composers and 

music publishers. In addition to 

issuing mechanical licenses for 

recordings, SODRAC also negotiates 

collective and individual 

licenses with different users of 

musical works. 

SODRAC grants a blanket 

license for broadcast mechanicals 

in return for a lump-sum payment 

it then redistributes to its members. 

Individual licenses are granted for 

the use of a work in films and television 

after consultation with the 

rights holders. SODRAC also 

administers the right of remuneration 

for eligible authors for private 

copying. 

SODRAC was founded in 1985 

by SPACQ (Société professionnelle 

des auteurs et des compositeurs 

du Québec), PROCAN (Performing 

Rights Organisation of Canada) 

and the French collective society 

SACEM (Société des auteurs, compositeurs 

et éditeurs de musique). 

Over 4,000 Canadian members 

and the repertoire of sixty-five 

countries are represented by 

SODRAC. 

SODRAC is a member of CISAC 

and BIEM. 

SODRAC 

759 Victoria Square 

Suite 420 

Montréal, Québec H2Y 2J7 

Tel: 514-845-3268 

Fax: 514-845-3401 

Website: www.sodrac.com 

E-mail: sodrac@sodrac.com 

Canadian Recording Industry 

Association (CRIA) 

OFFICERS: 

President: 

Brian Robertson 

CRIA is a non-profit trade organization 

founded in 1964 to represent 

the interests of Canadian companies 

that create, manufacture and 

market sound recordings. 

Membership is comprised of 

the major record companies, leading 

independent labels, and all 

manufacturers of compact discs 

and tapes. Together they represent 

over 95% of the sound recordings 

manufactured and sold in Canada. 

CRIA is governed by a Board of 

Directors elected annually by the 

membership from among the chief 

executive officers of member companies. 

The Board establishes policies 

and elects the officers of the 

Association. 

A number of CRIA's activities 

are administered by committees, 

comprised of specialists drawn 

from member companies,with outside 

specialists consulted where 

warranted. These committees 

include anti-piracy; manufacturing; 

marketing;copyright;retailer liaison; 

statistics; and e-commerce/Internet. 

CRIA 

890 Yonge Street, Ste 1200 

Toronto, ON M4W 3P4 

Tel: 416-967-7272 

Fax: 416-967-9415 

Website: www.cria.ca 

E-mail: info@cria.ca 

Songwriters Association of 

Canada (SAC) 

OFFICERS: 

President: 

Stan Meissner 

Vice Presidents: 

Rik Emmett, Blair Packham 

Established in 1983, the 

Songwriters Association of Canada 

(S.A.C.) is the only Canadian 

national arts service organization 

representing both professional and 

aspiring songwriters. The group’s 

mission is to protect and develop 

the creative and business environments 

for songwriters both within 

Canada and around the world. 

The S.A.C. is led by active professional 

and amateur songwriters, 

with an aim toward providing a 

unified voice in addressing concerns 

over copyright legislation 

and other rulings that affect the 

work of creators. 

To its members, the S.A.C. offers 

the country’s most thorough song 

registry service, The Song 

Depository; numerous showcases 

and educational workshops and 

services; and a quarterly publication, 

Songwriters Magazine. 

S.A.C. 

31 Madison Avenue, Suite 202 

Toronto, Ontario 

CANADA M5R 2S2 

Tel: (416) 961-1588; (800) 215-4814 

Fax: (416) 961-2040 

Website: www.songwriters.ca 

E-mail: sac@songwriters.ca 


55

APPENDIX 

C 

ITALY UPDATE 


The Italian music market had another down year 

in 2002. According to IFPI figures, the market lost 

7.8% in units to 48.7 million,with a corresponding 

loss in value of 8.6% to i586.3 million ($551.8 million). 

Italy’s anti-piracy body, FPM, released its annual 

report on January 15, 2003, finding that some 1,500 

arrests for copyright infringement took place in 2002, 

up 194% from the previous year. In addition,anti-piracy 

operations undertaken by law-enforcement agencies 

increased by 124%, and the number of illegal CDs 

seized was up by 74% to more than 2 million. The activity 

follows the late 2000 passage of stricter copyright 

infringement legislation. 

According to industry estimates,piracy accounts for 

23% of the Italian market, with FPM claiming a rate of 

over 50% in the southern part of the country. The high 

cost of CDs continues to be an issue, with the industry 

still hoping the Italian parliament will reduce the 20% 

VAT on recordings. 

As part of an initiative to cut CD prices, Universal 

Music Italy reduced the price of a large number of its 

titles to between i5-15 ($4.93-14.78). The initiative, 

which ran through November 2002, was designed to 

reap sales of 2 million copies on more than 600 local 

and international titles in the Universal catalog. 

Italian concert revenues grew 40% in 2002 to i102 

million euros ($110.34 million), according to 

Assomusica,an organization representing an estimated 

80% of the country’s live music producers and organizers. 

Much of the increase was due to the musical 

“Notre Dame de Paris,” which alone sold over 700,000 

tickets. Assomusica said that absent “Notre Dame,” the 

final 2002 figure would have represented about a 10% 

increase over 2001. 

Assomusica has joined with the Italian music industry 

to campaign for the government to acknowledge 

music as a “cultural activity.” Such a classification would 

bring with it fiscal benefits; for example, live music’s 

lack of cultural status means that concert promoters 

must pay a 10% fee to collecting society SIAE, along 

with an additional 10% sales tax on every ticket sold. 

Assomusica has submitted proposals to the Italian government 

with regard to the country's long-awaited 

Music Bill,which contains a number of initiatives aimed 

at assisting and regulating the Italian music business. 

The Italian parliament is considering legislation 

that would introduce airplay quotas of 50% for domestic 

music. Three lobbying groups—RNA, representing 

the national radio networks, and FRT and Aeranti- 

Corallo, which represent local stations—made a joint 

presentation in January 2002 to the parliament’s 

Culture Committee arguing against such a measure, 

saying that 15% of the country’s radio stations already 

play Italian music exclusively, while its national networks 

play an average of 37.7% Italian music.FIMI says 

the record industry would accept a 40% quota, but 

maintains that it should apply to new domestic artists. 

The proposed quota is part of various proposals 

connected to Italy’s long-delayed Music Bill. Other proposals 

currently under examination by the Culture 

Committee include tax incentives and the establishment 

of an export office, patterned after the one in 

France. 

The Main Organizations of the Italian Music Industry Are: 

FEDERAZIONE INDUSTRIA 

MUSICALE ITALIANA (FIMI) 

OFFICERS: 

GENERAL MANAGER: 

Enzo Mazza 

PRESIDENT: 

Alberto Pojaghi 

Founded in June 1992 with the 

aim of protecting and promoting 

the music industry’s collective 

interests, both at the national and 

international levels, FIMI is the official 

recording industry association 

of Italy. 

FIMI has established three permanent 

operating units to better 

serve its members: public affairs, 

communications and public relations. 

In addition, to better fight 

piracy,the organization has formed 

a centralized unit, the Federation 

Against Music Piracy (FPM), with 

its own head office and staff. 

Currently, 105 Italian companies, 

including both major and 

independent record companies 

accounting for about 90% of the 

Italian market, are members of 

FIMI, which is associated with the 

International Federation of the 

Phonographic Industry (IFPI). 

FIMI 

Largo Augusto, 3 

20122 Milan ITALY 

Tel: 39 2 795 879 

Fax: 39 2 799 673 

Website: www.fimi.it 

E-mail: info@fimi.it 

56

APPENDIX 

C 

SOCIETA ITALIANA DEGLI 

AUTORI ED EDITORI (SIAE) 

OFFICERS: 

Commissioner: 

Mauro Masi 

SIAE is the Italian society for 

authors and publishers. Its origins 

date back to 1882, when it was 

formed in Milan by a group including 

composer Giuseppe Verdi. In 

1926 it relocated to Rome; during 

the same year it joined the 

Confédération Internationale des 

Sociétés d’Auteurs et Compositeurs 

(CISAC). 

At present SIAE is linked to more 

than 100 societies throughout the 

world and extends its protection to 

foreign authors’ works entrusted to 

these societies, provided that these 

are protected in Italy according to 

the rules provided for by the Italian 

law or by the international conventions 

to which Italy is a party: 

the Berne Convention of 1886 and 

the Universal Copyright Convention 

of 1952. (Berne Convention dated 9 

September 1886 and Universal 

Copyright Convention dated 6 

October 1952). 

SIAE 

Viale della Letteratura 30 c.a.p. 

00144 Rome ITALY 

Tel.: 39-06-5990-1 

Fax: 39-06-59.64.70.52 

Website: www.siae.it 

ASSOCIAZIONE DEI FONO- 

GRAFICI ITALIANI (AFI) 

OFFICERS: 

President: 

Franco Bixio 

Vice-Presidents: 

Bruno Barbone, Roberto Dane, 

Sergio Pisano 

A.F.I. is a free syndicate of producers 

of sound and video music 

media (records, music cassettes, 

compact discs, videoclips and any 

other medium suitable for the 

recording of sound and/or images). 

A.F.I. is an apolitical, non-profit 

association whose purpose is to 

promote the collective interests of 

the music industry. 

The organization was established 

in 1933. On November 14th 

of the same year, the “International 

Federation of the Record Industry” 

was founded in Rome and, at the 

same time,several national groups, 

including the Italian one, were set 

up. The IFRI disappeared during 

the war years and was re-established 

through the initiative of 

seven companies on October 1st, 

1948,under the name Associazione 

dei Fonografici Italiani. 

A.F.I. membership has since 

grown to 226 companies, representing 

all the branches of the Italian 

music industry. All members of the 

association have equal rights, 

according to the provisions of 

Confindustria (the Italian Industrial 

Confederation), which recognizes 

A.F.I. as the only association representing 

the record industry. 

A.F.I. is responsible for negotiations 

with SIAE for the agreements 

regulating the exploitation of musical 

productions, for the purpose of 

recording them on phonographic 

media. These functions are performed 

within the framework of 

the international agreements with 

BIEM. The association also assists 

SIAE in its anti-piracy activities. 

A.F.I. 

Via Vittor Pisani 10 


Tel: 39 2 669 6263 

Fax: 39 2 670 5059 

Website: www.afi.mi.it 

E-mail: afi@afi.mi.it 

EDITORI MUSICALI 

ASSOCIATI (EMA) 

OFFICERS: 

President: 

Adriano Solaro 

EMA is a member company of 

the International Confederation 

of Music Publishers. 

EMA 

Piazza del Liberty 2 


Tel.: 39 2 79 64 73 

Fax: 39 2 00 25 30 

ASSOCIAZIONE ITALIANA 

DEGLI EDITORI DI MUSICA 

(AIDEM) 

OFFICERS: 

President: 

Maurizio Corecha 

AIDEM is a trade association 

that acts on behalf of the music 

publishing industry. 

AIDEM 

Piazza Verbano 22 

00199, Rome ITALY 

Tel.: 39 6 908-3396 

Fax: 39 6 908-3398 


57

APPENDIX 

C 

SPAIN UPDATE 


Sales in Spain were slightly up in 2002, according to 

IFPI,which reported a 1.6% increase in units to 80.5 

million and a corresponding rise in value of 0.9% to 

i685.1 million ($644.8 million). Authors and publishers 

society SGAE reported its smallest percentage rise in 

revenue for a decade during 2002, with collected royalties 

increasing by a mere 2% to i255.4 million ($273.3 

million).Revenue from international rights fell by 15.2% 

in 2002 to i23.8 million ($25.4 million),while the group 

pointed out that the average increase in rights collection 

during the past five years is still 12%. 

Authors’ royalties collected from live concerts in 

Spain increased by 25.5% to i13.1 million ($14 million). 

And for the first time,SGAE published its revenue generated 

from Internet downloads and ring tones; the two 

areas generated a total of i1.18 million ($1.26 million), 

up 62% on the previously unpublished amount in 2001. 

Meanwhile, the group has attacked a new intellectual-property 

law being drawn up by Spain's culture 

ministry, maintaining that the legislation would cost its 

members up to i10.4 billion ($11.5 billion),along with 

25,000 jobs and the closure of 4,000 small and medium 

companies. SGAE further said the proposed law could 

lead to the group’s canceling its annual Premios de la 

Musica awards ceremony, closing its seven international 

offices, and ending both its system of scholarships 

and its music dictionary publishing operations and 

other cultural studies. 

The new law would in effect cancel the existing 

royalty on blank CDs and cassettes and exempt bars 

and hotels from paying the public entertainment tax. 

The draft bill, purportedly aimed at bringing Spain 

in line with the European Directive on authors’ rights, 

seeks to create an Intellectual Property Committee that 

among other things would set the amount businesses 

pay for authors’ rights.The bill has also brought strong 

opposition from artists’ association AIE, music publishers’ 

body AEDEM, music authors and composers 

association ACAM, professional music publishers 

organization OPEM,and symphonic music publishers 

association AEEMS. 

Under pressure from the music industry and others, 

the Spanish government has promised tough new antipiracy 

measures. The promise came from Justice minister 

Jose Maria Michavila during a “Fraud Against Intellectual 

Property” seminar held in Madrid on November 20-21, 

2002,organized by SGAE.The society presented a survey 

during the seminar claiming that nearly 23% of all CDs 

bought in Spain are pirated (not including domestic 

downloading), and that 62% of people who buy illegal 

CDs never buy legal sound-carriers. 

Michavila told the seminar that, effective April 28, 

2003,a modification of Article 282 of Spain’s criminal justice 

law doing away with the need for a prior complaint 

to be lodged before acting against street sellers would be 

enforced,and that the penal code would be changed to 

include “aggravating circumstances,” such as the use of 

minors or membership of a criminal organization. 

SGAE maintains that 40 music-related businesses 

closed in Spain in 2002 because of piracy, adding that 

copyright generates i1 billion ($1 billion) a year in 

Spain, of which SGAE administers 25% in terms of 

authors’ rights.SGAE’s survey estimates that 20.7 million 

illegal CDs—or 22.9% of all CDS—are sold in Spain per 

year.According to the group, 23 million blank CDs were 

shipped in Spain in 1998,with that number escalating to 

138 million in 2001, with most of those used in street 

piracy or home downloading.The report also found that 

Spanish-language CDs account for 69.1% of all illegal 

sales, while English-language repertoire accounts for 

28.6%. In the legal sales market, 56.3% of repertoire is in 

Spanish,32.4% in English,and 11.3% is instrumental. 

The rampant piracy problem has had noticeable 

effects on the Spanish music industry landscape. 

Labels’ organization AFYVE canceled its annual 

Premios Amigo awards event to protest the high level 

of piracy, and roughly 85% of Spain’s music radio stations 

played no music for one hour on June 11,2002 as 

part of an anti-piracy “Day Without Music” protest 

organized by AFYVE.AFYVE, SGAE, and artists association 

AIE have been joined by retail associations and 

other industry bodies in “Mesa Antipiratería,” a committee 

to fight Europe’s worst piracy situation. 

At its May 7, 2002 general assembly, SGAE’s 64,000 

members voted 80%-20% to finance a three-year, $5.8 

million anti-piracy plan by paying an additional 0.51% 

from rights due to them in 2002—rising to 0.72% in 

2003 and 2004—above the 15.43% they were paying 

toward SGAE administration costs. The 30-point SGAE 

plan includes funding public-awareness advertising; 

lobbying for legislative changes to allow fast-track 

court cases and heavier penalties; and commissioning 

academic studies to examine the damage that piracy 

does to the cultural sector. 

Meanwhile,members of the Spanish music industry 

have grown increasingly critical of the government’s 

lack of commitment to helping sell domestic music 

abroad. While such countries as France, Belgium and 

Holland maintain official cultural export offices, Spain 

has lagged behind. 

On February 25, 2003, the Director General of the 

World Intellectual Property Organization (WIPO), Dr. 

Kamil Idris, and the Spanish Vice-Minister for 

Education, Culture and Sport, Mariano Zab’a Lasala, 

signed a memorandum of understanding (MOU) 

agreeing on the growing economic and cultural importance 

of copyright and related rights industries and 

stressing the need to generate greater public awareness 

of and respect for copyright and related rights. 

The MOU, which covers training, public outreach 

and information exchange, adopts a broad approach 

to copyright by stressing the importance of the development 

and management of cultural industries as well 

as public education and outreach and further provides 

a framework within which to promote copyright and 

related rights.It also seeks to support efforts to develop 

the copyright and related rights industries of Latin 

American and the Caribbean countries. 

58

APPENDIX 

C 

The Main Organizations of the Spanish Music Industry Are: 

Sociedad General de Autores 

y Editores (SGAE) 

OFFICER: 

President: 

Teddy Bautista 

SGAE is a copyright management 

society comprised of nearly 

68,000 music, audiovisual and dramatic 

creators. Its main mission is 

the protection of its members 

rights for the use of their works 

throughout the world. These uses 

include mechanical reproduction, 

public performance, synchronization 

and many other forms of musical 

distribution.This process culminates 

in the collection and subsequent 

royalty distribution to its 

members. 

The organization operates 

Fundación Autor as a promotional 

foundation which covers music, 

theater, dance and audiovisual 

media, as well as the annual Rock 

en N concert tour and a biannual 

Latin jazz competition. SGAE also 

operates the non-profit Sello Autor 

and Factoría Autor record labels as 

a means of exposing talent to 

wider audiences, and has published 

several music reference 

books. 

SGAE 

Fernando VI, 4 

Apartado 484 

28004 Madrid, SPAIN 

Tel: 34 91 349 95 50 

Fax: 34 91 310 21 20 

Website: www.sgae.es 

E-mail: sgae@sgae.es 

Asociacion Fonografica y 

Videografica Espanola 

(AFYVE) 

OFFICER: 

President: 

Carlos Grande 

AFYVE is Spain’s record label 

association, with 62 member companies, 

which account for about 

1,800 label imprints that represent 

over 90% of the Spanish music market. 

AFYVE 

Calle Pintor Juan Gris, 4 

2nd Planta 


Tel: 34 91 555 8196 

Fax: 34 91 555 9592 

E-mail: cgrande@mail.alhsys.es 

Artistas Interpretes o 

Ejecutantes (AIE) 

OFFICER: 

President: 

Luis Cobos 

AIE is Spain’s artists’ association, 

and has been instrumental in 

promoting artists of all genres and 

in the fight against piracy. 

AIE 

Principe de Vergara 9 

2nd Planta 


Tel: 34 91 781 9855 

Fax: 34 91 781 9555 

Website: www.aie.es 

E-mail: aie@aie.es 


59

APPENDIX 

D 

GLOSSARY OF TERMS 

INTERNET AUDIO TECHNOLOGIES 

NMPA INTERNATIONAL SURVEY TWELTH EDITION APPENDIX D: GLOSSARY OF TERMS 

BROADBAND 

High-speed access to the Internet. Broadband connectivity 

is increasing at exponential rates for both business 

and residential users. Some examples of broadband 

access include cable modems, direct service lines 

(DSL), and T1/T3. 

DOWNLOADING 

The physical copying of a file onto a user’s hard 

drive/PC from either an Internet server or another 

person’s computer. 

ENCODING 

The conversion of a sound recording into a digital file 

format. 

LIMITED DOWNLOAD 

A digital transmission of a time-limited or other use-limited 

download of a sound recording of a single musical 

work to a local storage device (e.g.,the hard drive of the 

user's computer or a portable device),using technology 

designed to cause the downloaded file to be available 

for listening only either (1) during a limited time or (2) 

for a limited number of times. 

LOCKER SERVICE 

An application in which a user stores digital music in a 

password-protected virtual locker,rather than on a computer 

hard drive. The user can then access this locker 

from any computer with an Internet connection. 

MP3 

Short for (Motion Pictures Experts Group) MPEG version 

1 layer 3, MP3 is the most commonly available 

audio file format available on the Internet. MP3 technology 

achieves compression ratios of 10:1 to 12:1. 

Typically,one minute of music is equal to one megabyte 

for stereo files. 

60

APPENDIX 

D 

ON-DEMAND STREAM 

An on-demand,real-time digital transmission of a sound 

recording of a single musical work to allow a user to listen 

to a particular sound recording chosen by the user 

at a time chosen by the user, using streaming technology,which 

may include but is not limited to Real Audio or 

Windows Media Audio. 

PEER-TO-PEER 

Also referred to as file sharing, peer-to-peer is a newly 

popular type of application in which,rather than accessing 

files from a central server, users access a common 

network hub and open up portions of their own computer’s 

hard drive to the public for downloading. Well 

known peer-to-peer services include Napster, Gnutella, 

and Freenet. 

PLAYLIST 

Incorporated into most software playback devices, 

playlists let you create,save,and load groups of songs to 

play in the order you choose. Making a playlist is like 

making a digital mix tape. 

PLUG-IN 

A plug-in is an external tool that, when added onto a 

software playback device, gives the application additional 

features and functionality. 

REAL AUDIO 

Developed by Real Networks, a file compressed using 

Real Media Audio technology and is almost half the size 

of an MP3 of the same song. Files can be streamed and 

downloaded using Real Networks Technology. 

RIPPER 

An application that copies music from a compact disc 

onto a computer’s hard drive. Once ripped, the audio 

file can be converted into other formats, uploaded to 

web servers,and/or burned onto another compact disc. 

RIPPING 

The process of copying sound recordings from a compact 

disc onto a computer’s hard drive. 

STREAMING 

The digital transmission of a sound recording of a musical 

work via the Internet to a user’s PC using streaming 

technology,which may include but is not limited to Real 

Audio® or Windows Media Audio. 

WAV 

The Microsoft Windows standard audio file format. 

Converting audio to WAV format does not compress the 

signal,therefore the file size remains as large as the original, 

typically about 10 megabytes per minute of music 

(for stereo files). 

WEBCASTING 

One of the fast growing areas on the Internet, webcasting 

generally refers to the streaming of audio on the 

Internet, and is sometimes called Internet radio. 

Webcasters may be Internet-only services that transmit 

several different genre-based channels,retransmitters of 

traditional AM/FM broadcasts,or services that syndicate 

music programming as background music on Web sites. 

WINDOWS MEDIA AUDIO 

Developed by Microsoft®, a file compressed using 

Windows Media Audio is almost half the size of an MP3 

of the same song,and sounds just as good or better.Files 

can be streamed using the Advanced Streaming Format 

(ASF),and through the Windows Media Rights Manager, 

sites can require payment or registration to enable a 

download. 

NMPA INTERNATIONAL SURVEY TWELTH EDITION APPENDIX D: GLOSSARY OF TERMS 

61

NMPA: A Brief History 

As technology changed the industry, from the introduction of radio in the 1920s to cylinder recordings, 

CDs, digital media and now online distribution, NMPA has worked to interpret and improve copyright 

law, educate the industry and the public about licensing, and safeguard its members’ rights. 

From the mid-1950s, when the need for legislative revisions became apparent, NMPA cooperated with 

other industry groups to study, debate and make recommendations on copyright issues. NMPA played an 

instrumental role in drafting the copyright revision bill introduced in Congress in 1964,and which finally led 

to the Copyright Act of 1976. 

NMPA led the successful legislative battle for the Audio Home Recording Act (AHRA) enacted in 1992. 

That same year, NMPA helped achieve Automatic Copyright Renewal, another hard-fought victory.Additional 

legislative achievements followed over the next several years including: Digital Performance Right in Sound 

Recordings Act in 1995,LaCienega legislation in 1997,and the “No Electronic Theft”Act,which was also enacted 

NMPA INTERNATIONAL SURVEY TWELTH EDITION NMPA: A BRIEF HISTORY 

in 1997.The LaCienega legislation was enacted in order to remedy a Ninth Circuit court decision in the ZZ Top v. 

LaCienega case,which threatened the integrity of all pre-1978 copyrights. 

In 1998 NMPA successfully fought new challenges to copyright protection by working for passage of the 

Digital Millennium Copyright Act. That same year the Association also achieved passage of the Copyright 

Term Extension Act.This Act extended the term of copyright to Life-Plus-Seventy (from Life-Plus-Fifty) in order 

to bring U.S. copyright law into line with that of the European Union and many other nations. 

NMPA also frequently supports important industry cases by filing amicus (“friend of the court”) briefs. In 

addition,the Association is often asked to testify at Congressional hearings concerning copyright matters,and 

is regularly asked to assist in the establishment and enforcement of copyright laws throughout the world. 

As NMPA heads towards its eighty-seventh year, the Association vows to continue its legislative and legal 

activities on behalf of all its members. No matter what new technology is developed to capture and disseminate 

music, NMPA will be there to make sure that music copyrights are adequately protected, and that 

songwriters and music publishers are fairly compensated for the use of their music. 

In the May 4,1917 issue of Variety,a full-page advertisement appeared officially announcing the formation 

of the Music Publishers’ Protective Association, the name by which the Association was known until 1966, 

when it was changed to the National Music Publishers’Association (NMPA).The Association has worked ever 

since to protect copyrights and to improve the legal framework for music publishing. 

62

PREPARED AND EDITED BY 

NMPA PUBLIC RELATIONS DEPARTMENT 

WRITTEN BY 

KEVIN ZIMMERMAN 

FINANCIAL DATA PREPARED AND COMPILED BY 

NJK TAX & ACCOUNTING SERVICES 

njktax@optonline.net 

DESIGNED BY 

TINA MALONIS DESIGN, NEW YORK 

www.malonisdesign.com 

PRINTED BY 

SPECTRUM GRAPHIX, MILFORD, CT

n m pa 

NATIONAL 

MUSIC PUBLISHERS’ ASSOCIATION, INC. 

475 PARK AVENUE SOUTH, 29TH FLOOR, NEW YORK, NY 10016 

646-742-1651 FAX 646-742-1779 WWW.NMPA.ORG 

© 2003 NATIONAL MUSIC PUBLISHERS’ ASSOCIATION, INC

NMPA_International_Survey_12th_Edition

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