One-third of discs are pirated

Official sources concluded that fake records outsell legal ones in 31 countries.

One of every three musical discs sold in the world last year was pirated, with sales totaling US$4.6 billion (euro3.8 billion), an industry group said on Thursday. In a record 31 countries, fake recordings now outsell legal ones, the International Federation of Phonographic Industries said in its annual report.

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The bootleg industry is growing Latin America, India, the Middle East and eastern Europe, it said, although around the world some countries are cracking down on copyright theft by shutting down illegal recording facilities. A record number of them, with annual capacity for 380 million discs, were knocked out of action last year, the study 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 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 US$2.1 billion a year.

Official sources concluded that fake recordings outsell legal ones in 31 countries. India has been identified as one of the big markets for pirated discs.

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, bootleggers selling pirated CDs and DVDs are common sights on the street.

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.

It called intellectual property "a jewel worth protecting," saying copyright industries account for 5 percent of GDP of the U.S. and European economies. Piracy jeopardizes jobs, economic growth and innovation and it 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," he added.

The IFPI calculated the US$4.6 billion piracy sales figure by determining through on-the-ground investigators how much counterfeit discs go for in different countries _ as little as a dollar in China, or US$5 in western Europe _ and trying to estimate how many of these discs are available, Jopling said.

The latter is done by consumer surveys, hiring people to actually try to count the number of discs coming 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 world pirate market for music is equal to the legitimate markets of 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 pirate market, with an 85 percent bootleg rate, the IFPI added.