IFPI's Jay Berman sets out industry's global internet strategy for 2004.
Jay Berman, IFPI chairman & CEO: keynote for IFPI Network
IFPI and its National Groups have spent the last year waging an intensive public information campaign on the issue of online music - both legal and illegal. Our educational tools range from music coalition websites to PR initiatives, projects at schools and colleges - and ultimately, to lawsuits against major infringing uploaders. Our campaign will only intensify in 2004 - and the need to communicate our message effectively has never been more important.
Every campaign has its key messages. Let me suggest what ours should be.
Key Message One: Making available copyrighted music without permission on the internet - that means the bulk of all file- sharing - is illegal in practically every country of the world. Those who ignore this legal reality may have to face the consequences. Whether there is a profit motive or not is totally irrelevant. The publicists of unauthorised file-sharing will suggest this is a grey area. It is not a grey area. It is clear under international law, including WTO rules and the WIPO Treaties. Lawsuits on a large scale have so far been restricted to the US; this 'fightback' will almost inevitably have to take place internationally as well.
Key Message Two: There is a legitimate online alternative for consumers. The success of Apple iTunes in the USA, now joined by Rhapsody, Napster and others, is pointing the way for the rest of the world. In Europe, services, like Tiscali, MSN and Wanadoo, and traditional retailers such as FNAC, Karstadt and Virgin are offering an online catalogue of more than 300,000 tracks. There are some 30 sites in Europe where consumers can buy downloads, 'tethered downloads' or subscription services. Companies like Wippit and Playlouder show the emergence of legitimate peer-to-peer services.
IFPI is at the vanguard of this development. The groundbreaking international webcasting agreement finalised in November will create a licensing one-stop shop that has been warmly received by webcasters and collecting societies. For the first time in Europe, a small but highly competitive legitimate online music sector is evolving. It is documented on the pages of our www.pro-music.org website, and it is fast-growing. I confidently expect Apple iTunes, Amazon, Napster and others to launch their own services in Europe in the first half of 2004. There are also technical platforms at national level, such as Phonoline in Germany - offering huge new online catalogues of local repertoire. More encouraging still, surveys are clear that consumers are prepared to pay for music online. Numerous surveys indicate that one third of all internet users will pay for music.
Key Message Three: Internet piracy means lost livelihoods and lost jobs, not just in record companies but across the entire music community. For those who think the 10.9% first half sales fall in 2003 does not speak for itself, look at the other evidence. Artist rosters have been cut, thousands of jobs have been lost, from retailers to sound engineers, from truck drivers to music journalists. Surveys in five major markets - USA, Canada, Germany, Japan and the UK - show that internet copying and file-sharing is reducing CD sales significantly more than it is promoting them.
Key Message Four: Our industry is fighting back - by making a vast music catalogue available online, by a swathe of educational projects and, where necessary, by resorting to the law. In 2003 we have made huge progress in raising awareness of the issues surrounding online music.
In the USA the music industry was forced to resort to hundreds of lawsuits against major uploaders - a move which has doubled the level of consumer awareness of the illegality of unauthorised file-sharing. Internationally, the education campaign is just as proactive. The pro-music website, launched in May 2003, has brought together a diverse coalition of music sector interests; we have issued thousands of copyright brochures to colleges and companies in over 20 countries; we have sent mass quantities of instant messages to infringing uploaders in several countries to warn them of the illegality of their actions. These four messages - despite the evident problems we have in our music markets today - add up, in my view, to a positive picture. We will never eliminate piracy altogether. Rather we must reduce online piracy to levels where legitimate online services have the space to develop on their own.
This migration from pirate to legitimate music on the internet is now happening. IFPI and our National Groups are playing an integral part in making
that happen and we will step up our efforts in 2004.