RIAA on Twitter

Gold & Platinum News

RIAA Releases Yearend Anti-Piracy Statistics

CD And Internet Piracy Take Center Stage

Washington, DC - The Recording Industry Association of America’s yearend anti-piracy statistics (PDF format) reveal an increase in the number of counterfeit and pirate CDs and CD-recordables confiscated in 1998. Utilizing education, enforcement and legislation, the trade group tackled all forms of music piracy. Over the course of the year, the RIAA launched an educational campaign to combat Internet piracy at college campuses, provided CD plants with tools to spot suspect orders and helped to pass a bill in California that is certain to curtail piracy.

“We’ve had tremendous success this year with our anti-piracy initiatives,” said Frank Creighton, senior vice president and director of anti-piracy. “Between the many CD plants around the country adopting better business practices to the scores of universities signing up for our copyright education program – we’re making strides on all fronts.”

Combating Internet Piracy

Last year, the RIAA’s Internet Enforcement team sent thousands of educational or warning letters addressing music sites offering hundreds of thousands of sound recordings that were violating artist and record company rights. This represents an increase of more than 400% over last year’s efforts. The majority of these sites were immediately shut down.

The RIAA’s Soundbyting Campaign, which was launched in April in conjunction with 10 schools to educate students and university administrators about the importance of respecting copyrighted works in cyberspace, is now in full swing at more than 200 colleges. The campaign hosts an informational website (www.soundbyting.com), that includes a student curriculum and educational materials for students, administrators and faculty. In 1997, 60% of all Internet-related educational or warning letters were directed to universities. In 1998, that ratio dropped to 40% primarily as a result of the Soundbyting Campaign.

While the most common way to address unauthorized music files on the Internet is through the cease and desist program, important legal precedents were set for online enforcement. In January 1998, the RIAA settled lawsuits against three Internet music pirates that violated Federal copyright laws by reproducing and distributing copyrighted sound recordings without authorization. The association received injunctions to stop their illegal activity, but decided not to collect monetary damages so long as the defendants never resumed their illegal activity. In May 1998, the association sued two more music sites that were illegally distributing full-length songs for download. This time, in addition to permanent injunctions, the RIAA received some monetary damages from the defendants who were also required to perform community service.

CD Plant Education Program

In June, the RIAA stepped up its CD Plant Education Program by launching its Anti-Piracy Good Business Practices. These voluntary guidelines suggest practical business solutions for CD plants to follow, such as know your customer and the product. “Implementation of the RIAA’s recommended Good Business Practices at many CD plants has allowed us to work with these facilities to ensure that only legitimate orders are accepted,” said Creighton.

338,458 counterfeit/pirate CDs were confiscated in 1998, representing a 163% increase over last year’s figures.

As a result of the CD Plant Good Business Practices guidelines, the RIAA received numerous tips from CD replicators regarding suspect orders. This information prevented close to 1.5 million CDs (not broken out in chart) from being manufactured or distributed in the U.S. in 1998.

Evidence collected over the years, primarily through criminal investigations, culminated in more than $20 million in settlements against domestic CD replicators and their customers on behalf of RIAA member record companies. This represents approximately a 250% increase over 1997 and the largest yearend tally ever in RIAA history.

In September, the RIAA helped to pass the California Optical Disc Identifier legislation, intended to reduce piracy, by requiring optical disc manufacturers to identify product with the manufacturer’s name and state. Optical discs include CDs, CD-Rs, DVDs and other materials used as masters to make copies.

Battling CD-R Piracy

The RIAA began reporting statistics on counterfeit, pirate and bootleg CD-R seizures in 1997. The number has skyrocketed from 442 confiscated CD-Rs in 1997 to 103,971 in 1998. According to Creighton, the proliferation of unauthorized CD-Rs in the pirate marketplace is fueled by inexpensive CD-R hardware and blank discs. Unauthorized CD-Rs are turning up on street corners, flea markets, retail locations, and even for sale via the Net. “However, we’re applying the successful investigative tactics and enforcement efforts used to combat cassette piracy in the ‘80s and early ‘90s, to that of CD-Rs,” said Creighton.

The bulk of unauthorized CD-Rs were confiscated at the end of the year in southern California. The Anaheim Police Department, with assistance from the RIAA, raided three locations, one of which was a factory distributing unauthorized CD-Rs to just about every state in the country.

Dubbed Operation Copycat I and II, a total of 20 locations were raided and more than 50 individuals arrested as a result of two joint investigations by the RIAA and the Motion Picture Association of America. This investigation closed down the biggest CD reproduction lab uncovered to date. It was capable of producing music CD-Rs that would have cost the recording industry more than $10 million a year in displaced sales. Large quantities of blank CD-Rs, insert cards, computer equipment and printers were recovered in the raids.

Due to the “burn-on-demand” nature of CD-R piracy, CD-R pirates tend to have less inventory than CD or cassette pirates. The RIAA began targeting operations that produce a handful of unauthorized CD-Rs, by sending them educational or warning letters. These non-Internet companies included retailers, CD plants and brokers. Nearly 700 letters were sent to retail locations by yearend 1998.

Other Facts And Figures

In August 1998, the RIAA opened a Latin music office in Miami, Florida. One of the objectives of RIAA Miami and its staff is to promote an effective relationship with Federal and local law enforcement to facilitate anti-piracy investigations in Southern Florida. In 1998, 50% of all product seized was of Latin repertoire. In December, Miami law enforcement, with assistance from the RIAA, confiscated approximately 70,000 counterfeit Brazilian CDs en route to Paraguay.

When it came to DJs this year, the RIAA made its point -- DJs are not exempt from copyright laws. The association’s continuing enforcement efforts in this arena resulted in settlement agreements with several major DJ companies. The Pros Entertainment Services Inc., ETV Networks and Promo Only agreed to stop causing the manufacture of unauthorized CD compilations, including those they had previously caused to be manufactured that contained hundreds of infringing sound recordings.

Another testament to the growing popularity of CD-Rs among music pirates is the jump in bootleg CD-Rs from 1997 (355) to 1998 (2,450). However, bootleg seizures in all other formats have remained steady over the last few years.

The RIAA is a trade association whose members create, manufacture and/or distribute approximately 90% of all legitimate sound recordings produced and sold in the United States. The Anti-Piracy division of the RIAA investigates the illegal production and distribution of sound recordings that cost the music industry hundreds of millions of dollars a year domestically. Consumers, retailers and replicators can report suspected music piracy to the RIAA by dialing a toll-free hotline, 1.800.BAD.BEAT, or sending email to badbeat@riaa.com.

#####

The Recording Industry Association of America (RIAA) is the trade organization that supports and promotes the creative and financial vitality of the major music companies. Its members are the music labels that comprise the most vibrant record industry in the world. RIAA® members create, manufacture and/or distribute approximately 85% of all legitimate recorded music produced and sold in the United States.

In support of this mission, the RIAA works to protect the intellectual property and First Amendment rights of artists and music labels; conduct consumer, industry and technical research; and monitor and review state and federal laws, regulations and policies. The RIAA® also certifies Gold®, Platinum®, Multi- Platinum™ and Diamond sales awards as well as Los Premios De Oro y Platino™, an award celebrating Latin music sales.

Contact:
Jonathan Lamy
Cara Duckworth
Liz Kennedy
202/775-0101