Industry Report Warns Of Deeper Piracy Woes

The worldwide recording industry lost an estimated $1.1 billion in 1989 to piracy as sales of bootleg product reached 477 million units, according to a report by the Intl. Federation of the Phonographic Industry. Overall counterfeit losses have increased 10% since the last report in 1987.

IFPI says that while the piracy problem in Southeast Asia has improved slightly, the situation in Africa is a growing cause for concern. It also points to an alarming increase in compact disk piracy in Europe – a development that could have a major impact on record-industry profitability.

IFPI reports that piracy rates in Africa have reached a “crisis point” of 60%. It asserts, “Unless fundamental changes in the legal environment are enacted, the local music industry is in danger of imminent collapse.”

Report also notes that piracy in Eastern Europe is a “burgeoning problem.”

On a brighter note, IFPI says that following the introduction of new copyright laws in Singapore, piracy there has dropped from a 1984 high of 85% to just 5%. However, IFPI declares the situation in Southeast Asia is still “critical,” with India, Thailand and South Korea the main source of black market goods. The pirate market in Southeast Asia accounts for $322 million in losses per year to the recording industry.

In Europe, losses caused by piracy have stabilized at about $150 million a year. However, IFPI is concerned that pirates in Europe have entered into compact disk technology.

A spokesman for IFPI said that some CD manufacturers with spare capacity – especially in the Far East and Eastern Europe – are actually producing pirated disks. He added that simpler technology continues to make it easier for rogue manufacturers.

In the U.S., piracy is costing diskeries $418 million a year (single largest loss in dollar terms to the international recording industry); piracy has tripled in Latin America in the past two years to $96 million.

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