International heads of recorded music industry raise crisis of recorded music market in Germany with Chancellor Angela Merkel

Berlin, 9th May 2007

Heads of the international recording industry called for urgent government action to tackle the crisis facing the German market, during a meeting with German Chancellor Angela Merkel in Berlin last night. The recording industry leaders urged the Chancellor to ensure that the industry has the proper tools to combat piracy, to engage Internet Service Providers in the fight against copyright infringement online and to control the epidemic of CD-R copying.

The heads of major and independent record companies spoke of the alarming downturn in the German music market, which has dropped 50% since 2000. Widespread CD-R copying and the high level of online copyright infringements constitute a huge drain on both the German music market and the wider economy. John Kennedy, Chairman & CEO, IFPI, said: “The international recording industry has now taken its concerns about the state of the German music market to the highest political level in Europe. We left the meeting appreciative of the fact that the Chancellor understood the nature of the problems we are facing and is willing to play a role in seeking a solution to them. If the German government acts now, we are confident that the German music industry could reverse the decline and be viable again in three to five years.”

The recording industry called on Chancellor Merkel, who is also President of the European Council and the G8, to use her position to strengthen awareness of the value of intellectual property to the economy. Specifically they called for the German government to:

• Introduce an obligation on ISPs to terminate service to subscribers abusing the service to make infringing content available
• Permit CD burning only from own legally purchased original and prohibiting copying by third parties
• Improve the German draft law implementing the EU Enforcement Directive to ensure proper tools to fight piracy
• Ensure that the EU plays an active role in the WTO case against China on Intellectual Property enforcement and market access
• Urge the Czech government to clean up the huge pirate markets on the Czech-German border
• Support an improvement in the length of the EU term of protection on sound recordings to match the level of protection provided in the U.S.

The recording industry delegation included: Lucian Grainge, Chairman & CEO, Universal Music Group International; Michael Haentjes, CEO, "edel" Music AG; Jean-Francois Cecillon, Chairman & CEO, EMI Music International; Rolf Schmidt-Holtz, CEO, Sony BMG Music Entertainment; Tim Bowen, COO, Sony BMG Music Entertainment; Paul Birch, Managing Director, Revolver Records; Patrick Vien, Chairman & CEO, Warner Music International; and John Kennedy, Chairman & CEO, IFPI. Multi-Platinum winning artist Udo Jürgens also participated in the meeting and called on the Chancellor to support the campaign to improve the length of term of protection on sound recordings in Europe.

NOTES TO EDITORS

The German music market

• 374 million illegal files downloaded from the Internet in 2006
• For every legal download there are 14 illegal downloads
• 149.5 million legitimate CDs were sold in 2006
• 486 millions CD/DVD copies burned
• For every legitimate CD sold - more than 3 are burned with music
• Industry lost an estimated €1.24 billion due to burning in 2006
• Physical piracy on Czech/German Border is huge drain on the German industry, estimated to be €30-40 million annually

About IFPI

IFPI is the organisation that promotes the interests of the international recording industry worldwide. Its membership comprises some 1,400 major and independent companies in more than 70 countries. It also has affiliated industry national groups in 48 countries.