Russian and international record companies unite to develop market and fight piracy
Moscow, May 15, 2002
The heads of the Russian and international music industry this week came together in Moscow to support a new organisation that will develop the legitimate music market and fight the country's rampant levels of copyright piracy.
The National Federation of Phonogram Producers (NFPP) represents 70% of the music industry in Russia and unites the major Russian and international record companies for the first time.
NFPP is backed by IFPI, the international trade body of the recording industry, which comprises some 1500 member record companies in over 70 countries worldwide. IFPI's European Board members held the first joint meeting with NFPP members on May 14.
The chief priorities of NFPP are: developing the Russian music market and the industry's infrastructure; fighting piracy alongside other music rights holders; and lobbying the Russian Government for effective copyright legislation and professional anti-piracy enforcement.
This includes measures to control pirate production by Russia's rapidly-growing CD manufacturing industry. Russian plant capacity for production of all discs - including music, film and business and leisure software - now totals an estimated 200 million discs, four times the country's legitimate demand.
NFPP and IFPI will also work on anti-piracy information campaigns aimed at the Government and the public. A question-and-answer document, 'Developing a Legitimate Music Market in Russia' was jointly issued by the organisations today.
NFPP's launch comes amid strong growth in the Russian music market (up 17% in 2001) and heightened international interest in working with the local industry in the fight against piracy, particularly in the light of Russia's planned accession to the World Trade Organisation (WTO).
Russia has a vibrant domestic record industry, a music market of US$223 million (ranked 22 globally) and a growing number of internationally successful artists. All of the major international record companies have subsidiaries or offices in Russia and are aggressively marketing local repertoire. There are independent projections that Russian music demand has the potential to double in size by 2010. But market development has been stunted by poor copyright laws, inadequate anti-piracy enforcement, and undeveloped systems for revenue-collection.
According to a global piracy survey shortly to be released by IFPI, Russia's music pirate market is worth US$240 million and is second in size only to China. This equates to huge losses for local artists, songwriters and record producers. Russian piracy is also a huge industry of illegal tax evasion that robs the government of tens of millions of dollars of tax revenues each year.
Yuri Slyusar, Chairman of the Council of Directors of NFPP and General Director of the Russian independent company Monolith, says: "The creation of NFPP is a great achievement for the Russian record industry. It gives all record companies in Russia, national and international, a much stronger voice than we have ever had before in developing a successful legitimate Russian music industry and in fighting the problem of piracy. We must win that fight with the support of the Government, or else piracy will silence our artists and destroy our recording industry."
Jay Berman, Chairman and CEO of IFPI, says: "NFPP for the first time gives Russia's record industry a united front to promote its legitimate music industry. This music market has huge potential, but only tackling Russia's chronic levels of piracy will release that potential. The international industry will work to achieve this with both NFPP and with the Russian Government. The critical priorities for the Russian music industry are stronger anti-piracy enforcement, modern copyright laws and proper regulation of its CD plants."
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