John Kennedy Speech: "Music file-sharers face biggest round of legal actions yet

Amsterdam, 12 April 2005

Good morning. My name is John Kennedy, I am Chairman and CEO of IFPI, and I am happy to be in Amsterdam with my Dutch colleagues this morning. I am also delighted to be standing alongside my colleagues from Brein, Buma/Stemra, representing authors and composers and singer/songwriter Kasper van Kooten.

Today we are announcing a very big escalation of our international enforcement campaign against illegal music file-sharing. The biggest single wave of legal actions internationally, involving over 950 individuals in 11 countries.

Our targets in these actions are major uploaders of music - people who are taking music for free much as a shoplifter seized a CD off the shelf, and then making it available on the internet to potentially millions of others. This is straightforward copyright theft, it is illegal, it is damaging investment in music and the music industry across the world. And the people doing it are not music fans. They are large-volume serial uploaders. Most of the individuals fined have been dealing with thousands of files, equivalent to the theft of hundreds of CD albums.

Aims: deterrence, changing attitudes and giving a breathing space to legal online services

Why are we taking these actions? In short, because we want to deter people who are, or who would become, illegal file sharers.

We also want to change consumer attitudes in favour of downloading the legal music way and - therefore give a critical breathing space to the legitimate online music business that is now offering consumers the chance to buy music legally online instead of taking it for free.

Why is illegal file-sharing a problem? To answer that, you need to look at what the music industry does. We research, we develop, we market, we sell and we reinvest a huge amount of our sales proceeds. The benefits of that reinvestment go to many - record companies, new artists, established artists, music retailers, music distributors, radio stations, film companies, advertisers, TV companies, telecom companies and the public - not to mention the government's public finances. This is the virtuous cycle of investment that depends on the simple idea that music is properly licensed and paid for. This virtuous cycle of investment is at the heart of our business model, and what we are acting to protect.

I have said this is an anniversary - one year of lawsuits, which were taken to stop the theft of music - is not a particularly joyous anniversary to be celebrating. No one in the music business takes pleasure in enforcing the law against thousands of individuals. We entered the music business to make, promote and market great music, not to be litigators. But, as we have proved in the last year, we absolutely prepared to go ahead and protect ourselves, our artists and our repertoire.

And when you look at the impact the campaign has had over the last year, there are good reasons to be optimistic. People across Europe can be in no doubt that uploading copyrighted music on to file-sharing networks is against the law, affects jobs, investment in music and livelihoods, and carries the risk of financial penalties.

We have spent two years raising public awareness of this. We have been responsible and transparent litigators - some might say the nicest litigators in the world. We have made many announcements, set up public information websites, we have worked with artists and set up education campaigns aimed at schools and colleges. And for nearly two years we have been using instant messages to get the warning straight to file-sharers - we sent more than 12 million instant messages in 12 countries.

As a result, our surveys across Europe confirm that seven out of ten people are aware that file-sharing without the copyright holder's permission is illegal. Ignorance really is no longer an excuse.

Who are the file-sharers?

Today we are also showing some facts and figures about the people who have been sued. Around the world, they come from all walks of life. We didn't choose them - they chose themselves by the extent of their uploading. It doesn't give me any pleasure to say that some offenders have had to pay substantial damages. However they ignored all the warnings, and have regretted it since. I hope that people are learning from the experiences of those who decided not to buy their music legally.

Who are these people? Well, they are a very wide mix of ordinary people. There are professionals - a teacher, a doctor, a judge, a cook, a nurse. There are students, there are unemployed people. There are parents, IT workers, factory workers. A car salesman, a company director. And even a local councillor.

They are predominantly, but by no means exclusively, men in their 20s and 30s.

What music are they uploading? Well, in short, it's the top chart music that everyone else wants. For anyone who thinks illegal file-sharing is driven by the lack of availability of special minority-interest repertoire that people can't get the legal way - it's a total myth.

Many cases have been settled so far in Europe, and those people have paid on average about 3,000 euros in settlements. Enough to make a difference. Enough, we think, to make other people think twice about the legal risks they face in becoming large-volume uploaders.

The impact of the campaign

There can be no doubt the campaign is having an impact. No-one would be foolish enough to say we will eradicate it - but we are containing it. Here is some key evidence.

The trends in the number of infringing music files on the internet - from 1.1 billion in July 2003 to 870 million, January 2005

The latest survey of 10,000 individuals in German survey shows illegal music downloads fell to 382 million in 2004, down from 602 million in 2003 (March 2005).

Finally, as I said, a critical objective of this campaign is to win a crucial breathing space for the legal online services. These are now taking off across Europe, offering a fantastic consumer opportunity. In the last year, people have begun to explore and enjoy the legal online music market in earnest.

In 2004 there over 200 million tracks legally downloaded, up tenfold on 2003. There are 230 legal music sites worldwide and 150 in Europe. This figure rose fourfold in 2004.

Over one million tracks are available on legal sites.

And that is the message I would like to end on today. The legitimate music business has taken off. One million tracks available at around 99 cents each. It's a fantastic consumer offering at great value. There is no excuse to for the theft of music.

People should download music legally, go to the legal sites and pay the artists, publishers, composers and producers. And if they do not - as today's announcement shows, you will face the risk of legal action and financial penalties.

Thank you for listening - that is the international context of this action and now I know you will be interested to hear from my Dutch colleagues on the events being announced today here in the Netherlands.