Lisbon - Latest steps to tackle music piracy.

John Kennedy, CEO and Chairman IFPI

4th April, Portugal, Lisbon

Good morning.

My name is John Kennedy and I am the chairman and chief executive of IFPI. We are an international association that represents the interests of the recording industry worldwide and works with our affiliated national groups in 46 countries, such as the AFP here in Portugal.

Our mission is to help the music industry, a 25 billion euro industry, pursue the core activities of its business - investing in artists; promoting and marketing great music; and creating as many ways, in as many formats as possible, for consumers to legally enjoy the music we produce.

I am delighted to have this opportunity to be here in Lisbon today to explain the latest steps of our campaign to help tackle the most serious problem affecting the recording industry across the world-music piracy.

The illegal downloading and copying of copyrighted music strikes at the fundamental economic model of the industry. If artists cannot be paid for the music they produce then ultimately they will stop making music.

This grim truth is better realised here in Portugal than in many other countries. Domestic artists have always primarily sold to a local audience. Large swathes of this audience are now obtaining their music illegally-threatening the very survival of an independent music industry here in Portugal. It is that serious.

Can you imagine the eclipse of Portuguese music? Of a tradition that helped in the resistance to the fascist regimes of the past, with artists such as Zeca Afonso and Manuel Freire facing arrest or exile for singing of freedom? Of a tradition that has its roots in the dignified sadness of the Fado?

More prosaically, but just as importantly, an industry that provides jobs for thousands of ordinary people, from sound technicians to make-up artists.

Yet sales of CDs in Portugal have fallen by 40 per cent in five years. They have nearly halved. To be sure, some of this is a consequence of people switching from physical formats to legally obtaining music on their mobile phone or computer. Yet much more of this loss can be accounted for by people obtaining their music illegally.

For music is more prevalent today than ever. Sit on a bus or a train and you'll see people listening to their headphones. Walk through town, particularly a college town, and you'll see the same sight. More people listening to music. Less people buying music.

That is why today the Portuguese recording industry is fighting back and is for the first time announcing legal actions against large-scale illegal file-sharing. This is a significant escalation of our enforcement actions against people who are uploading and swapping copyrighted music on p2p networks.

Today Portugal becomes the latest of 18 countries where such individuals will face often large financial penalties. A sustained and effective public information campaign has done its job in warning people of the consequences of this activity. But unfortunately in Portugal it has not resulted in a significant fall in the level of illegal file-sharing.

So we are taking the campaign to the next phase. The message is that, from Portugal to Argentina and from Mexico to Germany, there are no havens for the theft of music on the Internet.

Today we are announcing nearly 2,000 new actions in ten countries around the world. These actions are taken under the legal systems of each different country - sometimes they are civil actions, sometimes criminal cases.

We are targeting the large-scale uploaders, people who are uploading hundreds or even thousands of music tracks on the p2p networks. These people will now face large fines and damages claims. In the cases we have brought so far the average payment has totalled around 2,600 euros - hopefully enough to make them learn their lesson and deter others.

We are also warning parents again that they are responsible for what happens on the family computer. We have run campaigns before to educate parents about the rights and wrongs of downloading music on the Internet, knowing that it is critically important for them to help their children understand complex notions of intellectual property and why it needs respecting.

Yet still we have to bring legal action against parents whose children are using the family computer to access illegal material.

It is only common sense to check what your children are accessing on the computer. Using these file-sharing networks is like letting strangers into your house. Yes, your children could be getting you into legal trouble by accessing illegal music. They could be getting into deeper dangers. So, for your children's sake and yours, get involved with what they are doing and keep unwanted influences out.

The legal actions we are announcing today are the latest stage in a campaign that began two years ago. I still get asked whether the industry is misguided in taking action against its own customers.

The simple truth though is that these people aren't our customers. Research from independent organisations such as Jupiter show that people who illegally file-share music cut back or cut out their legal purchase of music-something that, as was mentioned earlier, is happening here in Portugal at a drastic rate. In essence, there is no difference between somebody illegally file-sharing and someone who steals CDs from their local music store.

What kind of people are they? From the evidence of our past legal actions they could be almost anyone. Apart from the aforementioned parents, we have brought legal actions against a Finnish carpenter, a British postman, a French chef, a Czech IT manager and a retired German couple. Across Europe we've caught car salesmen, factory workers, company directors, students, teachers and nurses. Legal action has even been brought against a local councillor in Britain and a judge in Germany.

I don't want to sound as though legal action is the only club in our armoury though. We are also undertaking major education campaigns. We have worked with the charity Childnet to produce a guide for parents to help them understand what is legal and what is not when it comes to digital music.

That guide has been translated into many languages, including Portuguese, and is available to download on the pro-music.org website.

Our Digital File Check software helps consumers to delete or block any or all of the file-sharing programmes it finds on their computer to prevent them from becoming conscious or unconscious illegal file-sharers. It can be downloaded for free from IFPI's website.

In addition to these services, we have sent instant messages directly to file-sharers - more than 50 million globally over the last two years.

A combination of education and legal action is getting the message through to people. All our research shows that seven out of 10 people know that file-sharing without permission of the copyright holder is illegal in virtually every country of the world.

Of course, our strategy is not ultimately aimed at stopping people getting music. On the contrary, the message to consumers everywhere is - get music online, it is available in a wide variety of ways and at tremendous value. Today, over two million tracks are available online on more than two hundred sites across Europe.

As I have said before: a personal work of art for life that can be yours for the cost of a daily newspaper, a can of cola, a tin of beans, a loaf of bread or less than half the price of a cup of coffee or glass of beer.

The music industry is rapidly responding to consumer demand for music online. With more than one-in-ten Portuguese homes now connected to broadband, the legitimate market here has a platform for growth.

If the broadband market becomes anything like as widespread as the mobile phone network here in Portugal then we could be looking at broadband in virtually every household within a few years.

Around a fifth of the music available on the current digital music services in Portugal is local repertoire. There is the opportunity to give artists a whole new platform to reach their audience.

Yet these local artists are the ones most threatened by piracy. If you are a music producer here in Portugal you have two choices. If you want to distribute work from international artists you must pay their royalties. If you want to work with local talent you must invest time in developing them - you have to spend while taking a greater risk on whether you'll see a return.

If any song you release is immediately pirated on the Internet, directly hitting your sales - where would you cut back? The answer is on the most expensive and risky investments. That is why local artists are particularly at risk from music piracy.

That is why it is important for Portuguese consumers to support their creative sector, the artists they love, by buying their music legally.

Attitudes towards Internet piracy are changing fast. In the two biggest music markets in Europe - Germany and the UK - more people regularly buy digital music than steal it through p2p networks.

A third of illegal file-sharers across Europe are cutting back or giving up their activities - scared of the legal consequences and the computer viruses that p2p networks are prone to.

Of course, there is a very long way to go, piracy is still rife in many markets and its impact on sales is still hurting the music industry, from world-famous artists to unknown sound technicians.

So the battle is on to save the Portuguese music industry. It's a fight that I hope people across the country will join. It is not acceptable to steal music. If you know that your friends, your colleagues or your relatives are doing it point out to them that what they are doing is harming the artists they claim to love.

Tell them that Portugal is not immune from international copyright laws and if they continue to undertake such illegal activities they could find themselves in court.

Tell them to buy their music legitimately, digital or hard copy, so that music industry can continue to provide them with pleasure for many years to come. Portuguese music has a great past - if we can ensure that it has a fair chance then it will have a great future too.

Thank you for listening.