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Jay Berman Comments On Record Industry Actions & Record Industry Steps Up Action Against Illegal Music File-Sharing

LONDON (CelebrityAccess MediaWire) — Jay Berman, chairman/CEO of the IFPI, gave the following speech on the record industry stepping up its action against illegal music file sharing.

"Today I am here as the head of IFPI, representing the international recording industry, to explain the international developments that are taking place alongside this announcement in the UK."

"Legal action against illegal file-sharing in Britain is just one part of an on-going international campaign. This started in the US in September 2003 and to date has extended to six countries in Europe. Today marks another important stepping up of this campaign, and there will be more cases announced in more countries in the coming months."

"Today in all six countries – Austria, Denmark, France, Germany, Italy and the UK – we are announcing a total of 456 legal actions. Three of them – Austria, France and the UK – are using the legal route against illegal file-sharers for the first time. Many thousands more cases are in progress in the US."

"Though the legal processes differ in the different territories, the objectives and messages are the same everywhere."

"After spending more than a year raising awareness that file-sharing other people's copyrighted music is illegal, and sending tens of millions of instant messages, we are now prepared to do more than talk about the law but to enforce it. In continental Europe and in the US, as in the UK, this strategy is one of last resort. In an ideal world, persuasion would substitute for litigation. But this is not an ideal world and these actions have been forced upon us by a hard core of very large and damaging uploaders of music who have simply refused to heed to the warnings."

"Let me clarify the legal issues. Some commentators have suggested there are grey areas in the law internationally – that is absolutely wrong. Copyright laws in virtually every country of the world are clear on this issue. WIPO Treaties signed in 1996 by over 100 countries confirm it – making available other people's copyrighted music without permission is illegal."

"And it is illegal for a very good reason, which is that copyright laws are there to protect the choice of the creator and the copyright holder over how to distribute their music."

"We are taking these actions for the sake of the health of the business, too, and for the hundreds of thousands of jobs that it provides. If anyone doubts that illegal file-sharing is having an effect on our markets, look at Germany – an industry decimated and a market halved in size over the last 6 years – or look at the US$6 billion that have been wiped off the world market in the last five years."

"Litigation is not a strategy in isolation – growing legitimate services and tireless copyright education programmes are vital too – and it is certainly not being taken lightly. But there is no doubt that it is having an impact. Look at the evidence."

"First of all, there has been a massive public awakening over the issue. One year ago, most people didn't know or weren't sure where they stood in terms of illegal file-sharing – many people didn't know what it was, let alone that it was illegal. Today, thanks to ongoing actions that have taken place internationally in recent months and the debate that ensued with them, most people do know that unauthorised file-sharing is illegal."

"Publicity around the lawsuits in different countries has undoubtedly helped in this awareness-raising process. In the US, in Germany and Denmark, major file-sharers who have been targeted with litigation have had to pay compensation. These are major uploaders, people who are illegally making available, potentially to an audience of millions, of hundreds of music tracks."

"Second, the supply of illegal music on the internet is being contained – user numbers on the largest network, Kazaa, are down 40% today on the level they were at in June 2003. New services that are evolving in place of Kazaa – such as EDonkey and WinMx – are not going be a hiding place for hard core illegal file-sharers. That is because we are increasingly focussing our attention on a number of different services, and not just KaZaA."

"You will see countless claims by third party analysts on whether the level of illegal file-sharing activity is going up or going down. They use different measuring methods and they have different clients to please. Our view is to reserve judgement until there is true statistical evidence, and that will not be for some time yet. What we do know is that the number of illegal music files on the internet has fallen significantly since the start of the international litigation strategy – a fall of nearly 40% from 1.1 billion to 800 million between June 2003 and June 2004. The level of file-sharing is being affected by the legal actions. We believe we are succeeding in changing people's attitudes."

"Third, we have helped create the environment for an explosion of legal sites where consumers can buy music online. And the UK is where that explosion is happening right now. The legal sites are secure, they are better than the unauthorised alternatives. Unlike the unauthorised peer to peer services they do not open up your computer to the rest of the internet world, exposing you to spam, adware, spyware and porn."

"There is no excuse to be an illegal-file sharer. Education campaigns have been waged all around Europe – led by our own pro-music educational campaign. The issue has hardly been out of the daily papers. To date 39 million instant messages have been sent to potential offenders around the world. Our survey in June in four European countries – UK, France, Denmark and Germany – found that seven out of 10 people are aware of the illegality of unauthorised file-sharing. That level has almost certainly risen dramatically over the last year to eighteen months since the litigation strategy began. We also know that public awareness of the illegality of unauthorised file-sharing rose from a mere 35% to 65% between April 2003 and the same month of this year. We can be totally confident that we have succeeded in awakening European public opinion in the same way as we have in the United States."

"The numbers of legal music sites are growing – there are now 100 in Europe, up from 20 one year ago. 4 million people are now paying for music online in Europe. Eighteen months ago there were none. Apple ITunes has passed the 5 million legal downloads mark in Europe, but it is only one of 10 services in Europe that are cross-border online retailers. Record companies have made the vast bulk of their catalogue across Europe available for consumers to buy. They have delivered on a promise repeatedly made in the last few years: to make it easier for people to buy music than to share it illegally."

"Education, warning, availability of legal services and legal action where necessary, are the necessary ingredient of an industry response. Together they can provide the basis for a successful future."

Record Industry Steps Up Action Against Illegal Music File-Sharing

(CelebrityAccess MediaWire) — The music industry has made a major escalation of its campaign against illegal file-sharing, unveiling 459 legal actions against music "uploaders" and for the first time targeting Europe's two largest music markets, the UK and France.

Announcing the actions on behalf of the recording industry worldwide, IFPI warned that the rolling campaign will be further stepped up and extended into new countries in the coming months. It called on music fans to buy their music online legitimately, rather than risk the legal consequences of illegal file-sharing. There are now over 100 legal online music sites in Europe offering a total of over one million music tracks.

The October 7 action is the largest single wave of lawsuits to be announced outside the USA since the industry in Europe started bringing litigation against illegal file-sharing in March 2004. It brings the total number of cases so far launched in Europe to more than 650 in six countries.

Besides the UK and France, new actions are being brought in Italy, Denmark and Germany, and the campaign is also extending for the first time to Austria.

The cases, a combination of criminal and civil suits, are aimed at "uploaders" – people charged with putting hundreds of copyrighted songs on to internet file-sharing networks and offering them to thousands or millions of people world-wide without permission from the copyright owners. The defendants are likely to face compensation payments averaging several thousand euros.

In countries where cases have already been settled, identified uploaders are already paying compensation. As a result of actions brought in March, so far more than 80 people in Germany and Denmark have handed over individual payments of up to 13,000 euros.

Uploaders on all major unauthorized file-sharing services are covered by the October 7 actions. The largest such service is KaZaA, which, since the start of industry litigation, has already seen its user numbers fall. There are 2.4 million simultaneous users on KaZaA, 20% less than there were in January.

Others targeted in the present actions include users of the EDonkey/eMule, Gnutella, WinMx, OpenNap and DirectConnect services. This is a warning that no illegal uploaders are immune from legal action, whichever service they are using.

The lawsuits are brought by IFPI-affiliated industry associations on behalf of record companies in each of the six countries. Individuals are charged with acting illegally by making copyrighted music available on the internet without the permission of the copyright holder. This is against the law throughout Europe and internationally.

A total of 100 cases are being launched in Austria, 174 in Denmark, 50 in France, 100 in Germany, 7 in Italy and 28 in the UK. In March a first wave of 247 cases was launched in Europe and Canada. In the US over 5,700 actions have been brought in the last year.

IFPI Chairman and CEO Jay Berman said: "We are taking this action as a last resort and we are doing it after a very long public awareness campaign. We have spent more than a year discussing the damage illegal file-sharing is doing to the music industry, including countless warnings of the legal consequences. We have been to the networks to ask them to stop the illegal activity taking place on their services, and we have gone straight to the illegal file-sharers with millions of instant messages."

"Now, finally, we are at the point where the law has to be enforced. There is quite simply no longer any excuse for illegally file-sharing. People who love music should buy it online and not swap files illegally. If they do continue to engage in illegal music file-sharing they are in effect engaged in copyright theft, and may therefore have to face the legal consequences".

Breakdown of the cases:

* United Kingdom: The UK record industry confirmed that is it launching a rolling program of legal actions against major alleged illegal file-sharers for the first time. The BPI is launching court cases against 28 individuals. The BPI alleges that they were engaged in copying and making available large numbers of music tracks on the internet in breach of copyright. They will face civil action for an injunction and damages.

* France: Criminal complaints and civil court cases are being filed against 50 major uploaders of music in France as the first legal actions in an ongoing campaign to combat illegal file sharing. French anti-piracy organization SCPP is pursuing court proceedings that allow fines and other criminal sanctions, or civil remedies including termination of the internet account of an infringer.

* Austria: IFPI Austria will be filing 100 criminal and civil cases against people found to have been offering large numbers of music files on peer-to-peer file sharing services without authorization. Austrian proceedings permit a range of remedies and penalties, including criminal raids and fines, as well as civil compensation and injunctions.

* Denmark: IFPI Denmark is sending civil demand letters to approximately 174 more alleged illegal music file-sharers, bringing the total number of such legal claims launched in Denmark to nearly 300. So far 67 individuals in Denmark (representing approximately 40% of those targeted in the previous wave) have already either paid or agreed to pay compensation averaging a few thousand euros each – one as high as €13,000.

* Germany: IFPI Germany has filed 100 additional criminal complaints against individuals alleged to be engaged in illegal file sharing of music. This brings to 168 the number of such cases launched. To date, 10 of the earlier defendants have been raided, 5 have had criminal judgments or fines imposed on them, and 16 have made civil settlement payments from 2.000 to 10.000 euros (averaging 4,000 Euros).

* Italy: Police have raided seven more individuals on suspicion of copyright infringement in connection with large-scale file sharing of music, with more actions expected in the coming weeks. This follows similar criminal cases brought against 30 individuals in March, which are still pending before the courts. Individuals found guilty are subject to fines expected in the range of 5,000 to 25,000 Euros with additional civil compensation possible.

* United States: Since September 2003, the US recording industry has brought copyright infringement lawsuits against over 5,700 alleged illegal file sharers. There have been hundreds of settlements to date, averaging several thousand US dollars each.

IFPI is also publishing a number of Fact Sheets on the impact of illegal file-sharing on music sales; the impact of the industry's litigation programme to date; the advance of the legitimate online music market; and the information campaigns conducted by the recording industry.

Highlights include:

*FPI has compiled a comprehensive collection of third party research which proves overwhelmingly that illegal file-sharing has contributed to the decline in global music sales – down US$6 billion in the last five years. All reputable peer-commended studies conclude that illegal song-swapping depresses music sales.

*In the last year record companies have made a vast bulk of their repertoire available online, and there are now over 100 legal music online sites in Europe compared to only 20 one year ago. Between 450,000 and 1 million songs are available in different European countries, and 4 million Europeans have already paid for online music. –Bob Grossweiner and Jane Cohen