Music industry calls for measures to curb piracy on digital media

Date: 02/11/1995

THE music industry is set to ask the European Commission to take urgent steps to stamp out piracy on the information superhighway.

In its response to a discussion paper on the subject due to be lodged in Brussels today (2 November), the International Federation of the Phonographic Industry (IFPI) will tell the Commission that the current system of legal protection needs to be radically overhauled to take account of new digital media.

“The existing copyright regime, based on the physical retail and reproduction of records, could well become woefully inadequate to protect investments by record producers in on-line markets,” say music industry representatives.

If not properly regulated, digital diffusion of music, the method by which records are posted electronically to a consumer's personal computer, could bring about the demise of the 26.5-billion-ecu a year music industry, they argue.

With 30 million users now connected to the Internet, traditional retail markets for physical compact discs are likely to be eroded over the next decade. While the information superhighway promises greater access to music for customers, it also provides unprecedented opportunities for pirates.

“The potential for piracy is far greater on a poorly-regulated information highway, where transmissions from one country could be downloaded and copied in another country for the price of a single telephone call,” says IFPI.

“Without adequate intellectual property protection for rights holders, piracy on electronic networks could proliferate out of control, with catastrophic commercial and economic consequences.”

Copyright revenue, the industry's bread and butter, will have to be fiercely guarded in the digital age, according to IFPI.

It wants the Commission to grant record companies the exclusive right to control all use of musical works on the information highway. That would allow them to prevent pirates from selling music to Internet users on 'digital juke-boxes' without their consent.

The industry says it could build special technology into computers which would force customers to pay up before downloading music.

IFPI will also ask the Commission to ban private copying of records which it says can no longer be seen as 'innocuous'.

Last year, 23&percent; of all retail units were pirate copies which cost the industry 606 million ecu in lost revenue, according to estimates from the industry.

In most parts of the EU, copying by consumers in the privacy of their own homes is allowed and record companies are compensated by fixed levies on blank tapes. But that, the IFPI says, will have to change in a digital era, when it will be possible to make perfect copies of musical works on a mass scale.

Artists have struggled for years to block the sale of bootleg records, which they say eats into their profits. Phil Collins fought and won a landmark case in the European Court of Justice in 1993 which banned sales of an illegal record called Live and Alive in Germany. But despite that ruling, the bootleg problem has persisted and is likely to get worse as digital technology becomes more widely used.

Representatives from the big six record groups which dominate the global market (BMG, EMI Music, MCA, Polygram, Sony Music and Warner Music) will travel to Brussels next week to plead their case in person before the Commission.

The music industry currently invests 303 million ecu in the European economy, employs 250,000 people and saw retail sales grow by 14&percent; in the first half of 1995.

The European Commission launched a wide-ranging debate on the future of copyright law in July. Responses were supposed to be submitted by the end of October, but most interested parties say they will be unable to reply to the Green Paper before mid-December.