NMPA_International_Survey_12th_Edition

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<strong>NMPA</strong> INTERNATIONAL SURVEY TWELTH EDITION INTERNATIONAL YEAR IN REVIEW 2002 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- <strong>NMPA</strong> INTERNATIONAL SURVEY TWELTH EDITION INTERNATIONAL YEAR IN REVIEW 2002 27
Page 1: 12th e d i t i o n NATIONAL MUSIC P
Page 4 and 5: Preface The National Music Publishe
Page 6 and 7: Executive Summary This is the NMPA
Page 8 and 9: Following a solid 14% growth in rev
Page 10 and 11: Table 6 Master Survey Data 2001 INT
Page 12 and 13: Table 7 Flat Exchange Rates 2001 IN
Page 14 and 15: Chart 4 22 Other Countries Ireland
Page 16 and 17: REPRODUCTION-BASED INCOME In 2001,
Page 18 and 19: NMPA INTERNATIONAL SURVEY TWELTH ED
Page 20 and 21: International Year in Review:2002 C
Page 26 and 27: LATIN AMERICA NMPA INTERNATIONAL SU
Page 42 and 43: APPENDIX A NMPA INTERNATIONAL SURVE
Page 44 and 45: APPENDIX B International Involvemen
Page 46 and 47: APPENDIX C U.K., JAPAN, GERMANY, FR
Page 48 and 49: APPENDIX C NMPA INTERNATIONAL SURVE
Page 50 and 51: APPENDIX C The Main Organizations o
Page 52 and 53: APPENDIX C The Main Organizations o
Page 58 and 59: APPENDIX C ITALY UPDATE NMPA INTERN
Page 60 and 61: APPENDIX C SPAIN UPDATE NMPA INTERN
Page 62 and 63: APPENDIX D GLOSSARY OF TERMS INTERN
Page 64 and 65: NMPA: A Brief History As technology
Page 66: n m pa NATIONAL MUSIC PUBLISHERS’

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