'VICTIMLESS CRIME' A THREAT TO THE ENTERTAINMENT INDUSTRY

FANS who tried to illegally download Madonna's American Life album from the internet earlier this year were in for a shock.

Each track was blank – save for the material Girl shouting. "What the f**** do you think you're doing?"

It was a crude indication of the unprecedented security surrounding the album's release – and an effective way for the singer to highlight an issue that not only threatens her career, but the entertainment industry across the globe.

Halfway across the globe, the Madonna album was almost certainly among the latest music releases illegally copied by two part-time staffers at a Hyde Part, Johannesburg record store, and then sold to their student friends.

According to the store's manager, the staffers refused to believe they were guilty of any wrongdoing – much less part of a global criminal racket that last year was estimated to be worth nearly $5-billion.

Music piracy has grown to such an extent that, according to the International Federation of the Phonographic Industry, one in every three compact discs sold around t he world last year - about 1.1 billion units - were pirated for commercial reasons.

If cassettes were included in their figures the federation added, then two out of every five recordings sold last year were illegal. While the cassette market may be shrinking in some parts of the world, it remains a viable format in Southern Africa, particularly in rural areas.

At a recent raid at a Highlands North, Johannesburg home, police discovered pirated cassettes with an estimated street value of about R3.5-million, says Gallo MD Charles Kuhn.

Police raids in September at flea markets across Gauteng also resulted in the confiscation of counterfeit DVDs, CD-ROMs and Sony PlayStation games valued at almost R3-million. But music piracy remains a key threat to local culture and the entertainment industry in Southern Africa.

Kuhn, who grows weary at suggestions that piracy is a victimless crime, points to the fact that, apart from damaging sales of legitimate music, the practice actively retards and undermines investment in local talent.

Pirates add no value to the industry. "They put nothing in the industry. No development of artists, no recording and production costs, no marketing, no promotion. Their profit margins are huge. Meanwhile, they're killing the domestic market.

"People think the industry's profits are huge. But they're not. Very few artists... go on to sell CDs in any significant quantity. Perhaps only one in 20 recording acts can ever be thought of a successful. Those are the risks the industry takes."

Underlying the alarming growth of piracy is the global overcapacity to manufacture what are known as "optical discs" - discs which can carry all media, including music, film and computer software. In other words, the supply of discs is far outstripping legitimate demand.

According to federation figures. Taiwan, for example, has a legitimate demand for about 230 million discs last year. Yet it has the capacity to produce almost 8 billion a year.

It is one of 10 markets identified by the federation as being of priority in its fight against counterfeit goods. Another is Paraguay, which has one of the highest levels of piracy in the world (almost 99%) and is a notorious entry point for illegal goods into the Americas. The others are Brazil, Mexico, Poland, Spain, Thailand, China, Russia and the Ukraine.

In most of these countries, piracy has all but wiped out local recording industries. This was the case with Malawi and Tanzania, which, for some years now, have had no music industries to speak of due to illegal taping.

The same almost happened in Zimbabwe, but one local cassette local cassette manufacturer took the pirates on-and won. Gramma Records deputy chairman Julian Howard says, "We lowered our prices to meet that of the pirates. They lowered theirs, we lowered ours. But even so, you can't fight them like that."

With the help of police and his anti-piracy team. Howard tracked down vendors who were selling pirated cassettes - and employed them. "We got them to sell our stuff. Within a year or so, we more than doubled our sales."

According to Kuhn, however, the SA industry's fight centres on education about piracy and how to enforce legislation concerning counterfeit goods.