A "music for free" mentality is challenging the future of the European recording industry

Brussels, 10 July 2002

The talent and diversity of European artists is the driving force behind one of the most dynamic industries in Europe. The European recording industry is valued at 12.1 billion Euros and European artists feature on one third of all the records sold worldwide.

Europe's recording industry, however, is facing one of the greatest challenges in its history. A "Music for Free" mentality is undermining the success of the European recording sector and having a serious impact on music sales across the continent. Music is being taken without the permission of artists. This situation is damaging the interests of songwriters, performers, record producers and everyone whose livelihood depends on music.

Jay Berman, Chairman and CEO of IFPI, the organisation representing major and independent record labels, said: " 'Music for Free' may sound attractive, but when it is taken without the permission of artists it comes at a high price for the entire music business and society in general. 'Music for Free' means less new music, fewer new artists, less choice, thousands less jobs and a poorer European culture. This is a critical issue in which European governments have an important role to play in terms of legislation and creating public awareness of the problem. The future success of the European music industry is at stake."

French composer and musician, Jean Michel Jarre, joined record industry heads in Brussels today to urge greater public awareness of the damage done by the prevailing "Music for Free" mentality. They spoke out as artists and music industry leaders from across Europe gathered in Brussels for the 4th IFPI Platinum Europe Awards celebrating the achievement of artists who have sold one million or more albums in Europe.

Jarre will tonight host the Platinum ceremony, in which European Commission Vice-President Neil Kinnock will present special awards to the Italian opera star Luciano Pavarotti, as well as the Irish musician and campaigner Sir Bob Geldof. Others artists who will be present to receive Awards include Hélène Segara and Henri Salvador (France); Westernhagen (Germany); Axelle Red (Belgium); and Estopa (Spain); Bomfunk MC's (Finland); and Blue (UK).

Jarre said: "I am a great believer in the value of music and the vital role it has to play in European culture. The talent and creativity of our artists is celebrated all over the world. But this success should not be taken for granted. If music is to continue to support the livelihoods of artists, it cannot be taken without the permission of artists." He added: "Governments can help support European music by promoting public awareness that when people take music that doesn't belong to them they undermine the future of those very artists whose work you enjoy. The EU could also show its support for the recording industry by lowering the high rate of VAT on CDs. Music should be treated the same way as other cultural goods that benefit from low VAT rates."

The proliferation of unauthorised music files on the Internet and mass scale CD burning are having a negative impact on the European music market.

There are more unauthorised music files available on the Internet now than at the height of Napster's illegal service. A recent survey by market research firm Jupiter suggests that unauthorised file distribution in Europe has grown sharply. In total, 3.1 million more people were using peer-to-peer networks in March 2002 than in February 2001 when Napster was at its peak.

CD burning has also badly hit the European music sector. In Germany, the number of blank CDs used to burn music was estimated at 182 million in 2001, compared to 185 million CD album sales, according to a survey from March 2002 by market research firm Gfk. In Spain, 71 million albums were sold in 2001 compared to an estimated 52 million blank CDs used to burn music, according to a survey by Millward Brown/Alef.

On a global scale, IFPI's sales figures for 2001 showed a 5% fall in the value of the recorded music worldwide and a corresponding fall in CD album sales. These declines were steeper in some European countries last year including Germany (down 9%), Austria (down 10%), Demark (down 19%) and Belgium (down 10%). These markets experienced similar falls in the first quarter of this year.

John Kennedy, President and Chief Operating Office of Universal Music International, said: "So much time, creative effort and financial investment goes into making great music, promoting it in Europe and exporting it successfully abroad. All of this risks being lost unless EU governments support us in helping to create a public awareness that taking music without permission is wrong. We are also asking the EU to promote European music by ending the current unfair discrimination between CDs and other cultural products that benefit from a reduced rates of VAT."

He added: "Platinum Europe celebrates the talent and diversity of artists in Europe. But if the prevailing 'Music for Free' mentality is left unchecked, record companies will no longer be able to invest up to 15% of their revenues in discovering and nurturing the Platinum artists of the future."

For further information please contact:
Francine Cunningham, IFPI European Regional Office, Tel: +32 (0)2 511 92 08
or Fiona Harley, IFPI Communications, Tel: +44 20 7878 7900