DAILY NEWS Jul 28, 2006 10:12 AM - 0 comments

Canada Top of the Pops for Music Piracy, Industry Says

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Canada is not just in the Top Ten; it's among the Top Three countries worldwide where increased enforcement and legislation is needed to combat illegal or unauthorized music downloading and distribution.

The music industry is stepping-up the fight against pre-release piracy; seizing record amounts of pirate discs and equipment; and pointing to a list of top 10 "priority countries" whose governments most need to act to combat digital and physical piracy.

Despite these efforts, music piracy remains an acute problem that harms the whole music community. That's according to industry trade organizations representing the international and US recording industries.

As part of their efforts, the IFPI and RIAA have announced that.major record companies have reached a global out-of-court settlement of international litigation against the operators of the Kazaa peer-to-peer network.

The settlement applies to Kazaa's operations worldwide and concludes the ongoing legal proceedings brought by the record companies against the service's operators in Australia and the United States.

John Kennedy, IFPI Chairman and CEO, described "a list of top 10 priority countries where actions - not lip-service - are most pressingly needed. Some of these governments have made progress in 2005", he said, but much more is needed, he said, citing a series of points in support of his position:

o More than one in three CDs sold worldwide is a fake
o Record seizures of discs and equipment
o Canada, Italy, Greece among top 10 "priority countries for action"
o Public education and action against pre-release piracy stepped-up
o 20 billion illegal downloads estimated globally in 2005

IFPI names 10 priority countries where enforcement efforts by governments most need to be stepped up; Canada is among its Top Three:

Brazil - One billion tracks were downloaded or swapped illegally on the internet in Brazil last year, while the physical piracy rate was 40 per cent. It is hardly surprising against such a backdrop that the music industry has lost 60,000 jobs in the country since 1997. There are signs though that the newly-formed National Anti-Piracy Council is starting to make an impact.

Canada - Outdated copyright laws have helped digital piracy flourish, with over one billion songs being downloaded illegally in 2005. The previous government failed to fulfil its long-standing pledge to ratify the 1996 WIPO Treaties. Annual retail sales of music fell by 42 per cent 1999-2005 and 20 per cent of music industry jobs have been lost. It is hoped the new government will take intellectual property more seriously.

China - The largest producer of pirate discs in the world with a physical piracy rate of over 85 per cent. The country also has 64 million broadband lines which is facilitating a rapid growth in digital piracy in a culture where paying little or nothing for music is ingrained. The government has made positive noises about protecting intellectual property but they need to be translated into hard action.

Greece, Indonesia, Italy and South Korea are also named.

IFPI is stepping up its battle in particular against pre-release piracy. Anti-piracy teams tracked the evolution of Placebo's new album Meds on the world's pirate distribution networks from the moment of its first leak no fewer than 10 weeks before official release. A large number of "notice and take-down" warning letters were sent to websites hosting the illegal files.

Tackling digital piracy is a key part of developing the legal digital music sector, which now consists of more than 360 sites offering over three million tracks for download. Revenues from digital music sales totaled US$1.1 billion in 2005 and saw continued strong growth in the first quarter of 2006, with the number of legal downloads in the US and UK - two of the largest digital markets - rising sharply.

IFPI is calling on governments to act on enforcement and education. Many countries need to update their intellectual property rights law and others need to ensure that the rules on their statute books are applied effectively. Training judges, prosecutors and law enforcement officers will help in this bid to combat copyright crime.

Under the terms of the announced P-toP settlement, Kazaa has agreed to pay a substantial sum in compensation to the record companies that took the legal action to stop copyright infringement on the Kazaa network. Kazaa will also introduce filtering technologies ensuring that its users can no longer distribute copyright-infringing files.

Kennedy said: "Kazaa was an international engine of copyright theft which damaged the whole music sector and hampered our industry's efforts to grow a legitimate digital business. It has paid a heavy price for its past activities. At the same time Kazaa will now be making a transition to a legal model and converting a powerful distribution technology to legitimate use.

"This is the best possible outcome for the music industry and consumers. Our industry will have a new business partner and consumers will experience new ways of enjoying music online, with more choice. This is a win-win scenario."

Recording Industry Association of America (RIAA) Chairman and CEO, Mitch Bainwol said in a release: "This is welcome news for the music community and the legal online music marketplace. Steadily but surely, we are passing another important marker on the remarkable journey that is the continuing transformation and development of the digital marketplace. The winners are fans, artists and labels and everyone else involved in making music, and our partners in the technology community.

"A little more than a year ago, the U.S. Supreme Court struck a wise balance between protecting innovation and the rights of creators," added Bainwol. "This meaningful decision has helped bring legal and moral clarity to the marketplace. Services based on theft are going legit or going under, and a legal marketplace is showing real promise. That's encouraging news for the industry's ability to invest in new music."

The settlement follows a landmark ruling in the Federal Court of Australia last year which found the Kazaa operators guilty of authorising widespread copyright infringement and litigation in the US by record companies, music publishers and motion picture studios against Kazaa, Grokster and Streamcast for copyright infringement.

The case against Grokster and Streamcast ultimately reached the U.S. Supreme Court, which in June 2005 unanimously ruled that individuals or companies that promote copyright theft by users of their service can be held responsible. Grokster settled the case with the record labels and motion picture studios in November last year.

Kazaa is one of the world's most popular peer-to-peer networks for the illegal trading of music and movies, and at its peak had 4.2 million simultaneous users worldwide. In May 2003 Sharman Networks declared Kazaa the most downloaded software ever, at 239 million downloads.

IFPI is the organisation that promotes the interests of the international recording industry worldwide. Its membership comprises some 1400 major and independent companies in more than 70 countries. It also has affiliated industry national groups in 48 countries. IFPI's mission is to fight music piracy; promote fair market access and good copyright laws; help develop the legal conditions and the technologies for the recording industry to prosper in the digital era; and to promote the value of music.

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