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Sunday, October 20, 2002
International Recording Industry discusses anti-piracy actions with Taiwan government

The international recording industry today voiced its total support for the campaign by Taiwan's artists and record companies to rescue the country's music industry from surging music piracy. Joining an alliance of local artists and record companies, visiting record company heads said Taiwan's music industry is in crisis and will go the same way as its decimated film industry if present levels of piracy are not rapidly brought under control.

The delegation, organised by the recording industry's international trade organisation IFPI and its affiliated group IFPI Taiwan, spoke at a press conference in Taipei alongside many leading Taiwan recording artists including A-mei, Lee Hom Wang and eVonne.

Once the epitomy of the economic success of the Asian music industry in the 1990s, Taiwan is now facing a piracy rate that has doubled to 50% (worth US$50 million) over the last two years. Over the same period Taiwan's legitimate music market has fallen from US$306 million in 1999 to US$170 million in 2001. Recorded sales dropped a further 13.4% in the first six months of 2002.

In 1999, Taiwan was the second largest music market in Asia, after Japan. Now it ranks only fourth in Asia, after Japan, South Korea and India. The rise in piracy has affected above all the local artists who account for more than half of music sales in Taiwan. Employment by the country's record companies, numbering approximately 100, has fallen by around 30% since 1999.

Piracy is also undermining the country's status as the world's creative centre of Chinese-language music. Taiwan is the source of 80% of sales of Mandarin music worldwide.

Organised crime plays a key role in the music pirate trade in Taiwan. Sophisticated syndicates manage the illegal business, both domestically and for export. Illegal firearms and ammunition have frequently been found in raids by police.

Exported shipments of tens of millions of pirate CDs and blank CD-R discs destined for pirate use, manufactured by Taiwanese disc plants, have been regularly seized, particularly in Latin America.

Internet piracy is also a growing problem. According to a survey by IpsosReid, Taiwan has the second highest rate of free music downloading, after Canada.

Taiwan's critical piracy problem was highlighted by a delegation of international recording industry heads in meetings with the local industry, with government and with the media in a visit to Taipei on October 15-17.

The delegation acknowledged the increased efforts of the Taiwan government to tackle music piracy. However, even more urgent anti-piracy measures are needed, in particular to tighten up enforcement, mobilise prosecutors and judges and strengthen legislative weaknesses. Despite the increased number of police actions the piracy problem has actually worsened.

Taiwan's artistic community mounted an unprecedented campaign against piracy earlier this year, culminating in the high-profile "4.04" rally in April. In response Premier Yu pledged a tough response. Government measures since then have included the formation of a 100-strong Intellectual Property Task force specialising in copyright piracy.

Lachie Rutherford, President of Warner Music Asia and Chairman of IFPI Asia Pacific Regional, said: "This is a critical moment in the fight against piracy in Taiwan. This country has been the major provider of Chinese repertoire in Asia, but now its music industry is dying in front of our eyes. Taiwan faces the prospect of having no presence in the regional music industry within two years if the present trend is allowed to continue."

Jay Berman, Chairman and CEO, IFPI said: "We recognise that the Taiwan government has taken steps since April this year to address the high level of piracy. However, despite those measures, the situation is the same as it was six months ago, and more needs to be done. The new IP task force has to be on a permanent basis, and its enforcement powers need strengthening; the new Optical Disc legislation needs to be extended and properly enforced; and prosecutors and judges need to attack piracy as the serious organised crime that it is - that means sending pirates to jail."

The recording industry is specifically calling for:

* The new Intellectual Property Rights special task force needs to be fully legally established and given proper rights to inspect plants, seize product and make arrests
* The Optical Disc Regulation introduced in 2001 has major faults which have to be addressed - for example it does not cover the manufacture of equipment, masters or stampers
* Amendments are needed to the copyright law to make piracy a 'public' crime and to avoid the decriminalisation of piracy under a certain commercial threshold
* Changes to the copyright law are needed to protect music on the internet
* Effective enforcement is needed - in particular an aggressive approach in prosecuting, convicting and sentencing pirates in the courts
* Record producers have to be granted rights over public performances as is common internationally

Taiwan Music Market: Key Facts

* Approximately half of all recordings sold in Taiwan are pirate. The piracy rate stands at 48%, up from 25% in 1999. Pirate sales are worth US$50 million annually.
* Taiwan's legitimate music market fell from US$306 million in 1999 to US$170 million in 2001. Taiwan is now the fourth music market in Asia after Japan, South Korea and India.
* The music market fell 22.9% in 2001 and a further 13.4% in the first six months of 2002.
* Taiwan's once-successful film industry went into decline in 1994 and collapsed in 1997 because of spiralling levels of piracy. The film industry, now dominated by international repertoire, lost US$35 million due to a piracy rate of 40%.
* The film industry estimates that US$250 million worth of orders have been lost to Taiwan's optical disc plants this year due to piracy.
* Piracy is hitting local artists in particular. Domestic repertoire as a proportion of the market fell from 66% in 2000 to 50% in 2001.
* Taiwan has about 100 record companies, which employ 30% fewer jobs than two years ago because of piracy.
* Overcapacity is an important factor in Taiwan's manufacturing of pirate discs for both the market and for export. The country has 53 known CD plants with a production capacity of CDs, VCDs and DVDs of more than 2.6 billion units per annum - second only to Hong Kong in South East Asia.
* On April 4 2002 around 7,000 people from across the music industry, including some 100 leading artists, participated on the anti-piracy march in Taipei to launch the present music industry campaign against piracy.

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