Pirate CD producers in Eastern Europe could bring the European recording industry to its knees, reports Stuart Miller from London
THE European recording industry has launched a frontal assault on the large- scale illegal production of pirate compact discs in Eastern Europe, which is costing companies and their artists billions of dollars in lost revenue every year.
Industry representatives have called on the European Commission to force the Bulgarian authorities to close five CD plants which are producing so many pirate copies from the biggest-selling acts that the legitimate music markets have been destabilised.
They say the Bulgarian government is fully aware of the activities of these plants, and may even be actively involved. Two of the plants are built on state-owned land and come under the auspices of the Ministry of Culture.
Experts estimate the economic damage to the European recording industry at more than $150-million and are demanding that Bulgaria be denied entry into the European Union until the plants are closed.
Nicholas Garnett, director general of the International Federation of the Phonographic Industry (IFPI), said: “The sheer size of Bulgaria’s illegal CD industry, which is quite disproportionate to the size of the country, has created one of the most serious international piracy problems for the recording industry.”
Despite the Bulgarian government’s claims to be tackling the problem, the use of the latest tracking technology, called the Source Identification Code, reveals that virtually all Bulgaria’s CD production is illegal, with at least 12-million fakes a year swamping Europe’s $24-billion record market, the largest in the world.
The enormous scale of the Bulgarian operation illustrates the vast profits that can be made from pirate CDs.
The advent of digital technology and the low-cost distribution opportunities offered by the Internet have led to a dramatic rise in global profits from piracy, from $1,4- billion in 1991 to $2,14-billion in 1995, the last year for which figures are available. The industry says seizures indicate that the pirates’ market has increased further.
China is historically the worst offender, with hundreds of clandestine plants, many of which are controlled by the military and regional officials. The Czech Republic and Israel are also home to multi-million dollar pirating industries.
The industry is dominated by organised criminal gangs attempting to launder money or raise large sums of cash quickly. The discs are usually transported by lorry on long spindles carrying thousands of unboxed discs, before being packaged on arrival in the country where they will be sold. Pirate CD shipments have been discovered alongside drugs, armaments and counterfeit cash at European borders.
In the past, the market was hindered by poor quality, but pirate CD plants now use the latest pressing technology to manufacture near-perfect fakes. The largest Bulgarian plant, Dzu-Dmon at Stara Zagora, uses equipment adapted from when it was a military computer research centre during the Soviet era.
“The quality of these recordings is high, thanks to digital technology, but consumers should be concerned because piracy on this scale could threaten future output of their favourite artistes,” said Moore. “Buyers of the illicit CDs are more likely to notice flaws in the packaging than the musical reproduction.”