By DANIEL WOOLLS, Associated Press Writer Thu Jun 23, 4:42 PM ET
MADRID, Spain - One out of every three music discs sold in the world last year was pirated, with fake recordings outselling legal ones in 31 countries, an industry group said Thursday. ADVERTISEMENT
The bootleg industry is growing in Latin America, India, the Middle East and eastern Europe, although around the world some countries are cracking down on copyright theft by shutting down illegal recording facilities, the International Federation of Phonographic Industries said in its annual report.
Though a record number of bootleg discs were seized last year, pirated recordings still racked up $4.6 billion in sales, the group said.
The report did not address Internet piracy other than to say it is growing, especially in Asia. The IFPI has never attempted to quantify these industry losses because "it is just too complicated," said IFPI market research director Keith Jopling. However, last year London-based Informa Media Group estimated them at $2.1 billion a year.
The IFPI, also based in London, said it was releasing the report in Madrid because Spain is Europe's worst culprit when it comes to pirating music. In Spain, street vendors selling bootleg CDs and DVDs are common sights.
The federation named Spain and nine other countries as priorities: Brazil, China, India, Indonesia, Mexico, Pakistan, Paraguay, Russia and Ukraine.
"The music industry fights piracy because if it did not, the music industry would quite simply not exist," IFPI Chairman John Kennedy wrote in the report.
The report called intellectual property "a jewel worth protecting," saying copyright industries account for 5 percent of gross domestic product in the U.S. and Europe. Piracy jeopardizes jobs, economic growth and innovation and saps tax revenue, the group said.
"It is no longer acceptable for governments and individuals to turn a blind eye or to regard piracy as merely a small irritation to society," Kennedy added.
The IFPI calculated the $4.6 billion piracy sales figure through on-the-ground investigators who determined how much counterfeit discs go for in different countries ? as little as $1 in China, or $5 in western Europe ? and tries to estimate how many discs are available, Jopling said.
The latter is done by consumer surveys, hiring people to actually try to count the number of discs that come out of major pirating outfits and monitoring the number of blank optical discs produced by factories.
"There is no hard and fast way of doing it," Jopling said from London.
The value of the global market for pirated music is equal to the legitimate markets in Britain, the Netherlands and Spain combined, the report said.
Globally, it said 1.2 billion pirated music discs were sold in 2004, 34 percent of all sales.
Musical piracy grew 2 percent in 2004, the smallest increase in five years. But the number of pirated discs is still double that sold in 2000, the report said.
In Latin America, the market for legally recorded music is two-fifths of what it was in 1997. In Paraguay, for instance, 99 percent of CDs sold are bootleg, the study said.
In Asia, excluding Japan, the legal market is half what it was in 1997. China is by far the world's largest bootleg market, with an 85 percent bootleg rate, the IFPI added.