NOTES FROM THE NET

Aug 1, 2002 12:00 PM, COMPILED BY SARAH BENZULY

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The Web is greater than the sum of its parts: The International Federation of the Phonographic Industry (IFPI) released a study on June 11, that stated that bootlegged music sales increased by almost 50% worldwide last year. The IFPI targeted out “pirates” who used the CD-R format to release 1.9 billion illegally duplicated units in 2001, an estimated $4.3 billion value. According to Jay Berman, IFPI chairman and chief executive, most pirates are involved in sophisticated, international networks that feed off of the lax copyright laws found overseas, especially in countries like Russia, China and Brazil. This is where the WIPO (World Intellectual Property Organization) enters the international scene. Signed on May 20, 2002, the World Phonograms and Performances Treaty (WPPT) bars the unauthorized delivery of recorded or live musical performances on the Web. Grouped with its sister treaty, the WIPO Copyright Treaty (WCT), which protects the copyrights of authors and publishers, the WPPT will bring “international copyright in-line with the digital age,” a spokesman for WIPO said in a statement. As of press time, 35 and 34 countries have signed the WCT and WPPT, respectively.

Calling the kettle black: But the CD-R format that pirates use to create the revenue loss is the same technology that is driving legitimate sales by consumers, according to a study released by market research company Ipsos-Reid. The study found that 80% of music downloaders said that their music-buying behavior remained the same or increased, despite their use of CD-Rs. This is similar to research provided by Jupiter Media Matrix, which concluded that people who use file-sharing networks were more likely to spend money on music. Can you see the labels prick up their ears? Beginning this summer, Universal plans to distribute tens of thousands of digital singles for 99 cents and albums for $9.99 through Liquid Audio (which was recently bought out by Alliance Entertainment) to online retailers such as Amazon.com, Best Buy and Sam Goody. And this same CD-R technology that the labels are seemingly fighting against will soon find its way onto the labels' online music services. Universal's upgraded service will also let buyers burn the music files onto CDs. Sony's service also plans to allow CD burning in the near future.






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