Recording industry leaders urge action to protect Italian music from piracy epidemic

Rome, 8 October, 2002

Recording industry leaders today called for urgent action against an epidemic of music piracy in Italy that is threatening the future success of Italian music at home and abroad. Heads of European recording companies visiting Rome urged better judicial enforcement and improved laws to help combat piracy that now accounts for 27% of the national music market. In southern Italy, piracy rates are estimated to be as high as 50%.

Italy has one of the strongest national music repertoires in Europe. Recordings by Italian artists accounted for 48% of the market in the first six months of this year. Italian music has been successfully exported across Europe and around the world. But the national industry is now facing one of the highest piracy rates in Western Europe.

Jay Berman, chairman and CEO of IFPI, representing the recording industry worldwide, said: "Italy has a rich and vibrant musical culture, but the value of this music is being undermined by piracy on a massive scale. Despite increased efforts by the Italian police to tackle this problem, the fact remains that pirate CDs are still sold everywhere in the streets. Even when prosecutions do reach the courts, pirates often get off much too lightly. We therefore urge the Government to work closely with the industry to effectively enforce laws to punish these pirates whose criminal activities are damaging the entire music business."

The pirate music market was valued at €121 million last year, which puts Italy in sixth place worldwide in terms of piracy. The Italian treasury also suffers millions of Euros in lost tax revenues due to piracy.

Emmanuel de Buretel, President and CEO, EMI Recorded Music Europe, said: "Piracy is not just affecting international artists. The rate of piracy for new releases by the most popular Italian artists is as high as 50 per cent. If piracy continues on this massive scale, it is clear that there will be an affect on local repertoire and in nurturing new talent."

The main form of piracy in Italy is the burning of music on to CD-Recordables (CD-R). Large illegal burning centers are active all over Italy, especially in the south of the country. Networks of street vendors then distribute the pirate product.

The first six months of 2002 saw a clear increase in the number of anti-piracy actions carried out by Italian police. There has been an increase of 200% in the number of police raids, arrests, seized CDs and CD-burners compared to the previous year.

In the biggest CD-R case carried out in Italy this year, police raided a burning facility located in an underground armoured vault near Naples in March. Some 130 CD burners and 106,000 CD-Rs were seized. Two people were charged with copyright law infringement.

There is clear evidence of the involvement of organised crime groups in the copying and distribution of counterfeit CDs. Often profits from music piracy is used to fund other illegal activities such as the drugs trade, money laundering and other serious criminal activity.

Italy introduced an anti-piracy law in 2000 and is now in the process of implementing the EU Copyright Directive. Alberto Pojaghi, President of Federazione Industria Musicale Italiana (FIMI), commented: "Enforcement activities have increased since the adoption of the anti-piracy law, but there is still a lack of awareness about the damage done by piracy among the judiciary. So we are asking the Government to increase their efforts to obtain prosecutions against pirates. Since Internet piracy is also on the increase in Italy, we urge the Government to adopt the EU Copyright Directive without any delay."

For further information please contact:
Francine Cunningham, IFPI on Tel: +32 478 261995 (Enquiries in English);
or Elena Strada, FIMI Tel: +39 02 795 879 (Enquiries in Italian)

ITALY - KEY FACTS

Market situation
The recorded music market was valued at €586.3 million in 2001, a decline of 8.6% from the results in 2000. There was a corresponding decrease in total units sales from 50.5 million in 2000 to 45.8 million in 2001. Newly released figures show that the Italian market was valued at €259.8 million in the first six months of this year. This represents a decline of 9.5% in value and a decrease of 6.7% in units compared to the same period in 2001.

Italian repertoire
Recordings by Italian artists accounted for 48% of the market in the first six months of this year.

Commercial Piracy
Piracy increased to 27% of the Italian music market in 2001. In southern Italy piracy rates are as high as 50%. The pirate market was estimated to be worth €121 million in 2001. Sales of pirate CDs grew 23% in 2001 while sales of pirate cassettes fell sharply.

Composition of the Pirate Market
Mass-scale burning of music onto CD-Recordables (CD-R) has become by far the dominant form of piracy in Italy. Large illegal burning centres are active all over Italy, especially in the south. CD-R burning accounts for 82% of the pirate market.

Anti-piracy actions
There was an average 200% increase in the number of police raids, arrested persons, seized CDs and seized CD burners. From August 2001 to July 2002, 1.6 million burned CDs and 737 CD burners were seized.

Consumption of pirate CDs
According to a recent study by market research group AC Nielsen, 11.5 million Italians (30% of the population) have acquired at least one burned CD. Some 4.7 million people (12% of 14-64 year-olds) "regularly" buy counterfeit CDs. Pirate CD estimates suggest that each of these buyers purchases 3.4 pirate CDs per year.