Speech by Jay Berman

October 7 press conference

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.