Worldwide illegal market garnered $4.5 bil in 1998

LONDON — Sales of pirated music CDs grew 20% worldwide in 1998, the result of rampant illegal manufacturing and a sophisticated smuggling network between Southeast Asia and Latin America.

The new statistics from the IFPI, the global record industry org, paint a bleak picture, despite seizures by authorities of 60 million illegal CDs in 1998, double that of 1997.

The IFPI estimates that 2 billion pirate units were sold, 1.6 billion cassettes and 400 million CDs in a worldwide pirate music market estimated at $4.5 billion for 1998. Illegal recordings outnumbered legitimate music sales in 20 countries, up from 14 the previous year.

Biggest markets China, Russia

Those markets with domestic piracy levels higher than 50% now include Estonia, Latvia, Hong Kong, Malaysia, Ukraine, Israel, the Palestine Authority and Nigeria. The biggest markets above 50% remain Russia and China. In 1998 pirated recordings represented about one-third of worldwide unit sales.

The $4.5 billion total is actually lower than 1997’s $5 billion estimate, indicating that the pirates, like the legit record companies, suffered from the slowdown in the world market.

Problem may worsen

Containing music piracy, IFPI chairman Jay Berman said, requires “stronger laws and effective enforcement … no government can afford to stand by and let piracy stunt its economy, rob its culture and damage its international reputation.” Berman admitted, however, that the problem could become even more acute this year.

One recent success in the campaign against piracy was a clamp-down in Bulgaria, the key offender in the manufacture and international distribution of fake product in recent years. But Eastern European pirate exporters — typically linked to organized crime — have shifted operations to the Ukraine, now considered the major European problem territory.

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