Music Piracy a £2.5bn Business

One in three music discs sold worldwide is an illegal copy, creating a €3.8bn (£2.5bn) music pirate market.

Despite the huge scale of the problem, some governments have taken encouraging steps to address music piracy in the last 18 months, according to the recording industry Commercial Piracy Report 2005, which is published by UK based industry association IFPI.

A total of 1.2bn pirate music discs were sold in 2004, which is 34 per cent of all discs sold worldwide. But growth in disc piracy has slowed to its lowest level in five years, partly thanks to stepped up enforcement efforts in countries including Mexico, Brazil, Hong Kong, Paraguay and Spain.

Industry and government enforcement efforts are also reaping results. The past year saw record levels of pirate production taken out of action, while seizures of commercial CD burning equipment in 2004 were twice the levels of 2003.

Sales of pirate music exceed the legitimate market in a record 31 countries in 2004 - including, for the first time, Chile, Czech Republic, Greece, India and Turkey.

IFPI considers Spain Europe's most serious piracy problem country where rampant street CD piracy has shrunk the legitimate market by one third in the last three years.

Spain is one of ten top priority countries named by the IFPI report, where piracy levels are at unacceptable levels and where additional government action is urgently needed. They are: Brazil, China, India, Indonesia, Mexico, Pakistan, Paraguay, Russia, Spain and Ukraine.

It also highlights four other countries - Bulgaria, Canada, Korea and Taiwan where piracy, both physical and on the internet, is a special focus for the international recording industry.

Industry anti-piracy efforts, backed by forensics and working closely with agencies such as Interpol, helped in the decommissioning of CD plant lines with the capacity to supply 380 million discs, or half the entire disc market for music in the US. There were also record seizures of CD burners, which doubled in 2004 to 28,350.

The report says that, for all the importance of the internet to the music business, fighting piracy of physical formats - largely discs produced in vast quantities either in high-speed burning laboratories or in traditional CD plants - is as great a priority as ever for the recording industry.

China, the world's largest pirate market, worth €340.7m, has seen a slight fall in the piracy level.

Russia is the world's second largest pirate market, with capacity far exceeding local demand. IFPI forensics has identified Russian-made pirate disc exports in over 27 countries.

Spain was one of the world's top legitimate markets, which has shrunk by a third in the past five years. CD-R street piracy is rampant. The government has stepped up enforcement in 2004 and proposed a comprehensive programme of anti-piracy actions.

Three years after trade sanctions were imposed by the US government, and despite encouraging signs from the Yushenko administration, Ukraine maintains a high level of piracy.

Music disc piracy rose two per cent to 1.2bn discs in 2004, the lowest level of growth in five years but nearly twice the number of pirated discs in 2000.

Sales of all pirate recordings fell slightly to 1.5bn units, as cassette piracy fell by 28 per cent to 390m units in 2004.

The value of the world music pirate market was largely flat at €3.8bn in 2004 (€3.7bn in 2003).

Pirate sales outnumber legitimate sales in 31 countries.

Pirate operations are getting smaller but more numerous as disc piracy shifts increasingly to smaller-scale high-speed CD-R burning labs.

CD-R piracy, predominant in Latin America, Southern Europe and India, rose six per cent in 2004.