The global entertainment and media industries generated revenues of $1.23 trillion in 2003, and that figure is expected to grow to $1.67 trillion by 2008, according to a new study issued by PriceWater






Breaking News

Study: Global Entertainment Biz To Hit $1.67 Trillion In 2008

By Ed Christman

NEW YORK -- The global entertainment and media industries generated revenues of $1.23 trillion in 2003, and that figure is expected to grow to $1.67 trillion by 2008, according to a new study issued by PriceWaterhouseCooper.

The "Global Entertainment and Media Outlook" study covers the music, movie, TV, radio, book, sports, videogame, theme park, newspaper and magazine sectors.

Both new and next-generation technologies will drive growth, helping the global market in these industries to achieve a 6.3% compound annual growth rate, or CAGR, through 2008.

The study found that the global music industry had revenues of $30.5 billion last year, and predicts that to grow by a 2% CAGR to $33.5 billion by 2008.

U.S. music sales, which were $11.9 billion in 2003, are growing at a 3% CAGR to reach $14 billion in 2008, the study says. This is still less than the $14.6 billion the study measured for the U.S. in 1999.

Europe, the Middle East and Africa (EMEA) had combined music revenue of $11.9 billion in 2003 and will have a slow CAGR of 1.8% to reach $13.1 billion in 2008. Latin America had music sales of $711 million in 2003 and is expected to shrink 4.8% to $555 million by 2008. Canada is expected to generate a 1.6% CAGR through 2008 to reach $711 million.

By 2008, digital distribution will account for 12.5% of the global music market, or $4.2 billion in revenues, according to the projections by PriceWaterhouseCooper.

Helping to drive digital sales, broadband penetration will increase from the current 82 million households worldwide to 320 million by the end of 2008.

In a breakdown by region, the study expects U.S. broadband penetration to grow from 21.6 million in 2003 to 54 million by 2008; EMEA will grow from 18.3 million to 81.4 million; the Asia Pacific region from 37.6 million to 169.3 million; and Latin America and Canada combined from 4.5 million to 14.2 million.

The study projects that the videogame business, which stood at $22 billion at the end of 2003, will surpass the music industry by 2006, when it will reach $36 billion -- on its way to $55.6 billion in 2008. The videogame business will grow at a 20.1% CAGR, compared with music's meager 2% pace.

Meanwhile, the study estimates that at the end of 2003, there were 1.18 billion global wireless telephone subscribers. It expects that number to reach 2 billion by the end of 2008.

By region, the study says, the U.S. had 148 million wireless subscribers at the end of 2003 and will grow to 197 million by 2008; EMEA had 385 million and will grow to 470 million; Asia Pacific had 510 million and will more than double to 1.1 billion; and Latin America and Canada had 117 million and will grow to 220 million.

Moving over to the movie business, the study tracks revenues of $75.3 billion in 2003 and expects the industry to reach $108 million by 2008.

Of the 2003 total, the U.S. portion is $34.3 billion, expected to grow to $46.6 billion by 2008. Of the $34.3 billion, video sell-through is the largest component, with revenues of $15 billion, while rental and box office each account for $9.5 billion. Sell-through in the U.S. is expected to grow to $24.5 billion by 2008, box office will grow to $12.5 billion, and rental is expected to shrink to $7.7 billion.

In EMEA, the movie business generated $22.6 billion last year. Of that, sell-through accounted for $12.8 billion; rental, $3.2 billion; and box office, $6.6 billion. By 2008, the study predicts, the total EMEA movie market will be $36.9 billion.

In the Asia Pacific, the study counted $13.3 billion in film industry revenue in 2003, of which box office was about $4.2 billion; sell-through, $3.4 billion; and rental, $5.5 billion. By 2008, the total is expected to be $17.3 billion.

In Canada and Latin America, the movie business garnered $4.7 billion in 2003; expectations are that it will grow to $6.5 billion by 2008.

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Clear Channel Sued For Contract Breach Regarding Howard Stern Show

By Bill Holland

Howard SternWASHINGTON -- Infinity Broadcasting East and the talent agency representing Howard Stern and his radio show have filed a lawsuit seeking more than $10 million from Clear Channel Communications Inc. (CCC).

The complaint was filed June 30 in U.S. District Court for the Southern District of New York by One Twelve Inc., which provides Stern's services, and Infinity, the Federal Communications Commission licensee of WXRK, the New York radio station where the show is produced. New York-based One Twelve is an offshoot of the Don Buchwald & Associates talent agency.

The two companies charge that CCC, the nation's largest radio-station owner, broke contracts they had to air the Stern program in six cities and therefore violated license agreements.

One Twelve and Infinity accuse CCC of failing to notify them that the show was being dropped, which the plaintiffs say was required under the terms of the contracts. They also say they are owed license fees.

The complaint also takes a swing at CCC chairman/CEO Lowry Mays for allegedly violating the company's licensing terms in order to pacify and win favor with federal lawmakers.

"On February 25, 2004," says the complaint, "one day before its CEO was to testify before Congress regarding proposed legislation that would have increased penalties for 'indecent' broadcasts, Clear Channel, without any prior notice to or consultation with Licensors, publicly announced that it would exercise a right it did not have under the License agreements: indefinitely to 'suspend' broadcasts of the Programs."

The terms are contained in six license agreements for the stations, dated between May 2001 and September 2002.

The action came the same day Infinity Broadcasting East parent company Infinity Broadcasting Inc. announced that it would be adding the Stern show at nine affiliate stations.

CCC, facing complaints from federal regulators for indecent programming of on-air talent, dropped Stern in February from stations in Florida, California, Pennsylvania, New York and Kentucky.

"Howard Stern is the only one who has broken the law," Andy Levin, CCC executive VP/chief legal officer says in a statement. "His contract explicitly requires his show comply with all FCC rules and regulations. On several occasions, it clearly did not. Clear Channel Radio had both a legal right and an obligation to stop broadcasting it."

Last month, CCC admitted to airing indecent material and agreed to pay a record $1.75 million penalty to settle all existing complaints. The company also agreed to take steps to prevent further incidents of indecency.

In the lawsuit, the plaintiffs call for damages "in an amount to be determined, but not less than $10 million; attorneys' fees and expenses; a declaration that "Plaintiffs' terminations of the License Agreements are valid, that all rights thereunder have reverted to Plaintiffs"; fulfillment by CCC of its "post-termination obligations"; and "further relief as the Court deems just and proper."

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Survey: Most Adults Oppose Lawsuits Vs. Downloaders

By Chris Morris

LOS ANGELES -- A survey of 1,000 U.S. consumers has found that a majority of adults are opposed to suing people who illegally download music from the Internet.

Since September 2003, the RIAA has filed suit against more than 3,400 people the trade group identified as illegal downloaders. Nearly 500 new actions were filed in June. At least 600 of the suits have been settled; none of the cases has gone to trial.

The new poll, conducted by the legal Web site FindLaw found that 56% of the respondents opposed the lawsuits, 37% supported legal action against downloaders, and 7% had no opinion.

Young adults were highly opposed to the suits: 66% of 18- to 34-year-olds polled were against taking the issue to court.

Sharon SandeenBut upper-demo consumers also took a dim view of the action: 59% of those aged 35-54 and 41% of those 55 and older also took a dim view of the suits.

Law professors interviewed by FindLaw saw nothing wrong with taking illegal downloaders to court.

Sharon Sandeen, professor of intellectual-property law at the Hamline University School of Law in St. Paul, Minn., told FindLaw, "(T)he individuals who complain about the lawsuits should ask themselves, 'Would I rather live in a world with freely distributed but less music, or pay for the music I enjoy so that there will be more of it?' "

Sandeen added, "Public opposition to the lawsuits may be due, in part, to what some people consider hard-handed tactics by the RIAA."

Marci HamiltonMarci Hamilton, professor at Yeshiva University's Benjamin N. Cardozo School of Law in New York, said, "In many ways, downloading is like shoplifting: an exciting and slightly risky diversion, a seemingly petty vice in an otherwise law-abiding life. But like shoplifting, illegal music downloading violates the law and exacts a cost on society."

The national survey used a representative sample of 1,000 adults nationwide, with a margin of error of plus or minus three percentage points, and was conducted by Ipsos Public Affairs.

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Great White Leader Sues Ex-Publicist For Libel

By Ray Waddell

Jack RussellNASHVILLE -- Jack Russell, leader of Great White, has filed a multimillion-dollar libel suit against Charrie Foglio, a former publicist for the band.

Causes of action in the suit -- which was filed June 30 in Los Angeles Superior Court -- are slander, invasion of privacy (false light) and a preliminary and permanent injunction.

The suit contends that Foglio falsely told the press and others that Russell and his manager, Obi Steinman, were stealing money from the Station Family Fund, a charity for the victims of the 2003 fire at the Station Club in West Warwick, R.I. The fire, which occurred during a performance by Great White, killed 100 people and injured about 200.

The lawsuit, filed by longtime Russell attorney Ed McPherson of McPherson & Kalmansohn in L.A., says Foglio was fired in July 2003 because she made false statements to the press about Great White in order to advance her career.

The suit claims that after she was fired, Foglio threatened Russell and Steinman, saying that if they did not pay her a severance package, she would contact the press or a Rhode Island grand jury that was investigating the fire and tell them Russell and Steinman were embezzling money from the Station Family Fund.

When Russell and Steinman refused, the suit claims, Foglio followed through on her threats. A Station Family Fund investigation later proved the charges false, the suit says.

"Jack Russell voluntarily gave up profits the band and he might have made last year on a 41-city tour because he genuinely wanted to help these victims and their families," McPherson tells ELW.

"For someone to say after the fact that he somehow wanted to steal from these people or hurt them is deplorable," McPherson continues. "It shows malicious intent toward Jack and his manager, and it's completely untrue, and that's why we felt compelled to file this action this morning."

Russell seeks compensatory damages of at least $10 million and unspecified punitive damages.

Foglio could not be reached for comment.

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African Lawyers Sue Disney Over 'Lion Sleeps Tonight'

JOHANNESBURG (Reuters) --South African lawyers are suing U.S. entertainment giant Walt Disney Co. for infringement of copyright on "The Lion Sleeps Tonight," the most popular song to emerge from Africa, the lawyers said July 2.

If Disney loses, South African proceeds from its trademarks -- which include Mickey Mouse and Donald Duck -- could be seized by the courts, lawyers representing relatives of the song's composer said.

The lilting song, originally called "Mbube," was featured in Disney's popular "Lion King" movies.

The song has earned an estimated $15 million in royalties since it was written by Zulu migrant worker Solomon Linda in 1939. However, Linda's impoverished family has received only about $15,000, the lawyers said.

Linda sold the worldwide copyright for "Mbube" to a local firm, but under British laws in effect at the time, those rights should have reverted to his heirs 25 years after his death in 1962, copyright lawyer Owen Dean says.

This means Linda's surviving three daughters and 10 grandchildren would be entitled to a share of royalties from the song, which has been recorded by at least 150 musicians.

"We are claiming 10 million rand ($1.6 million) in damages from Disney at the moment," Dean says. "The court attached use of Disney trademarks in South Africa to the case last week. We believe our legal position is very sound."

Disney executives in South Africa were not immediately available for comment.

The case could have widespread implications for other South African musicians, authors and artists who may have sold their rights without being aware of their entitlements. "The family is entitled to royalties. There has also been a misappropriation of South African culture -- the song is thought to be American," Dean said.

The "Mbube" song was adapted by U.S. folk singer Pete Seeger, who called it "Wimoweh," as he misheard its Zulu lyrics. U.S. songwriter George David Weiss rewrote the song as "The Lion Sleeps Tonight."

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Film Workers Urge U.S. Action on Foreign Subsidies

WASHINGTON (Reuters) -- U.S. cinematographers and other film-industry workers have asked the Bush administration to take action against Canadian, Australian and other government filmmaking subsidies that they say have lured away tens of thousands of jobs.

"We have been harmed by runaway production of films, videos and television shows that are being made in foreign countries because of ... unfair trade practices," the Film and Television Action Committee (FTAC) said in comments filed last week with the Commerce Department's Unfair Trade Practices Task Force.

The Bush administration created the task force as part of an initiative aimed at helping the U.S. manufacturing sector, which has lost nearly 3 million jobs since 2000. The panel is supposed to actively root out "unfair" foreign trade practices to keep jobs in the United States.

"We are asking that the Unfair Trade Practices Task Force address these (foreign film) subsidies as one of its first priorities," FTAC said. "The elaborate subsidy programs of Canada and other countries constitute extensive unfair trade practices that have damaged domestic interests in the amount of billions of dollars."

FTAC is supported by the Screen Actors Guild, various technical film workers' unions and "tens of thousands of rank-and-file entertainment workers" according to its Web site. Unions representing cinematographers and other theatrical workers also asked separately for the Bush administration to crack down on "runaway" film production.

The groups charged the Canadian federal and provincial governments with offering a wide array of subsidies to encourage film and television production in Canada. They also accused Australia of offering "lavish" tax breaks and other incentives to entice movie production.

The success of those countries has encouraged many European countries, as well as Brazil, Iceland, New Zealand and South Africa, to offer similar incentives, FTAC said.

The Unfair Trade Practices Task Forces also heard from an assortment of other U.S. industries -- ranging from potatoes to steel -- demanding action. Many of those complaints were directed at China, which ran a record $124 billion trade surplus with the United States in 2003.

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Stanley M. Gortikov Dead At 85

By Bill Holland

Stanley M. GortikovWASHINGTON -- Stanley M. Gortikov, a former Capitol Records executive who served as president of the RIAA from 1972-87, died June 24 at his home in Brentwood, Calif., of natural causes. He was 85.

As a Capitol exec in 1964, Gortikov was part of the team that spearheaded efforts to market the Beatles; later, as president of the label, he is credited with keeping a good company relationship with the Beatles after they formed Apple Corps in 1969.

At the RIAA, Gortikov guided the industry through a hail of criticism from parenting groups and federal lawmakers over records with explicit and violent lyrics. The debate over lyrics and artistic freedom resulted in the now-famous hearing in 1985 before the Senate Subcommittee on Communications. Gortikov argued at the hearing that suggestions for a rating system were unworkable, and that the great majority of the industry's releases promoted positive values.

Recording artists invited to the hearing, notably the late Frank Zappa, called any rating system tantamount to artistic censorship. In November of that year, after consulting with member companies, Gortikov's RIAA agreed to print warning labels on the covers of records with possibly objectionable lyrics.

Gortikov moved the trade group headquarters from New York to Washington, D.C., in 1986 to increase its presence with the nation's policymakers.

Hilary Rosen"He was a real gentleman in every sense of the word," says Hilary Rosen, who headed the RIAA from 1998-2003. "Looking back on it now, the truth is the parental advisory (sticker) has helped the industry to respond subsequently to attacks on content."

She adds, "Stanley loved the record business and really built the RIAA into an institution that the companies could rely on."

Gortikov will also be remembered for his efforts to ensure that lawmakers writing the 1976 Copyright Renewal Act gave new protections for sound recordings. He was also outspoken in efforts to increase the number of black executives in the music industry and led the RIAA's early outreach to law enforcement to crack down on counterfeiting and piracy.

Services will be private. The family requests that contributions be made to Human Rights Watch.

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Washington Report

Canadian ISPs Win Court Ruling Over Royalties

By Larry LeBlanc

Canadian FlagTORONTO -- Internet service providers may not have to pay royalties to the music industry for files downloaded by their customers, the Supreme Court of Canada ruled June 30.

In a 9-0 decision, the court ruled that companies providing access to the Web are merely "intermediaries" in the downloading process and therefore may not be bound by Canadian copyright law.

The court decreed that as a general rule, the Canadian Copyright Act does not impose legal liabilities on ISPs, as long as they act as bona-fide intermediaries, and have no input in determining Web content.

The decision indicates that rights holders can sue specific Web sites that distribute their music without authorization. This might apply even to sites in foreign territories that cater to Canadian users. ISPs could become liable if they are formally notified that a specific Web site is violating the law, and if they refuse to block access to it.

Paul SpurgeonPaul Spurgeon, general counsel of the Society of Composers, Authors and Music Publishers of Canada (SOCAN), says, "The Supreme Court has clearly stated that a Web site communicating from another territory into Canada is a communication in both that country and in Canada. This paves the way for us to go to the Copyright Board, albeit only for Web sites and ISPs that are more than mere conduits. ISP liability could be triggered if technology or knowledge allows them to know more."

"It confirms that Internet transmission from outside of the country are covered by Canadian copyright law regardless of the origin of the transmissions," adds Brian Robertson, president of the Canadian Recording Industry Assn. (CRIA). "If it is an illegal signal, it is also subject to civil or even criminal law."

The case had been closely watched internationally because of its possible impact on the recording and computer sectors.

Allen DixonAllen Dixon, general counsel of the London-based IFPI, welcomed the decision. "The ruling in Canada is an important confirmation that infringing services cannot circumvent national laws by transmitting copyrighted files from outside that country. This rule, as it is implemented in other countries, will help prevent piracy havens from being established on the Internet," he says.

SOCAN had attempted to force ISPs to pay a tariff for downloaded music -- significant because the services are easier to track down and sue than are individual download sites or consumers.

The Supreme Court action was brought by the Canadian Assn. of Internet Providers, whose members include subsidiaries of Bell, Sprint, AOL, MCI, IBM and Yahoo!. They argued that artists should seek royalties directly from Web sites that offer copyrighted works, rather than from companies that only provide access to the Web.

The action followed a landmark 2002 ruling by Canada's Federal Court of Appeal, stating that if ISPs act as more than "passive providers" -- for example, by storing or "cacheing" music on their servers -- they were responsible for royalties. That decision had supported the licensing of Internet music transmissions in each country to which they are transmitted, regardless of where the music originates.

In 1995, SOCAN filed a tariff for licensing of performing rights on the Internet with the Copyright Board, in effect addressing the question of liability for music on the Internet for the first time in Canada.

In its Phase I Tariff 22 Jurisdicial Issues decision in 1999, the Copyright Board agreed with SOCAN that Internet transmissions are communications in the same way as radio, TV, or cable broadcasting, and that the same standards of copyright are applicable. However, the Copyright Board also ruled that in order to occur in Canada, a communication must originate from a server located in the country.

SOCAN appealed this decision to the Federal Court of Appeal.

Significantly, in the June 30 decision, the Supreme Court of Canada swiped at the inadequacies of Canadian copyright, suggesting that the federal government update laws to deal with copyright protection in the digital age. Justice Ian Binnie wrote that the United States, Australia and the European Union have updated their copyright rules to deal specifically with Internet issues.

For the past few years, Canada's music industry has been pressuring the government to update its copyright laws and to ratify two World Intellectual Property Organization (WIPO) treaties that were signed in 1997 but have not yet become law: the Performances and Phonogram Treaty and the Copyright Treaty.

The Federal Court ruled March 31 against a motion by the CRIA that would have allowed the industry association to begin suing individuals who make music available on-line. The court ruled that the ISPs Bell/Sympatico, Rogers Communications Inc., Shaw Communications Inc. and Telus Corp. could not be forced to reveal to the CRIA the names and addresses of 29 people who allegedly had shared a "high volume" of songs via the Internet.

Konrad von FinckensteinIn his ruling, Justice Konrad von Finckenstein said the CRIA did not prove there was copyright infringement by the alleged music uploaders. Von Finckenstein further ruled that downloading or uploading unauthorized files does not constitute copyright infringement under current Canadian law.

The CRIA has appealed von Finckenstein's decision. An appeal is expected to be heard in the fall.



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International Section

Australia Ups Support For Personal Copying

By Christie Eliezer

SYDNEY -- The Australian music industry and Parliament are increasing their support for proposed changes to the copyright law that would introduce a levy on blank recording media.

Phil TrippA campaign to amend Australia's Copyright Act (1968) to allow music copying for personal use was initiated in mid-June by Phil Tripp, managing director of Sydney-based events company Immedia and publisher of the Australasian Music Industry Directory.

Under current law, Australians who make personal copies of recorded media are in breach of the Copyright Act. Penalties range from $500 Australian ($350) to $5,000 Australian ($3,500).

Tripp proposes allowing music buyers to copy their purchases onto recordable discs, tapes or digital music players, all of which would carry a levy.

Tripp claims to be acting as a private individual who believes that the law on private copying is wrong and that consumers' rights are being ignored. He dismisses record-industry assertions that legalization of copying will lead to lost sales.

"That has not been the case in overseas countries where such a levy was introduced," he says. "If anything, a levy puts a value on music as far as customers are concerned."

A levy system similar to that proposed by Tripp exists in Canada. It is administered by the Canadian Private Copying Collective, which collected about $20 million (U.S.) during 2003.

The Australian government is already considering modifying aspects of the Copyright Act to put it in line with a planned Free Trade Agreement (FTA) with the United States. The FTA is expected to go into effect by the end of 2004.

A June 25 FTA report by the Parliament's Joint Standing Committee on Treaties recommended that the government consider applying the blank-media levy and making other provisions for personal copying.

Tripp says the size of a levy would be determined by the government's Copyright Tribunal. Monies would be collected and distributed back to artists, songwriters, labels and publishers through the Australasian Performing Right Assn. (APRA). That body is supporting Tripp's stance.

Brett CottleAPRA CEO Brett Cottle says a levy is a sensible move. "Technical solutions will not stop copying because they can be hacked, and they alienate the very people we want back into buying music," he says.

In November 2003, APRA and its film-industry equivalent, Screenrights, proposed plans to the government for a levy similar to that suggested by Tripp. The proposal was rejected because it lacked universal support.

Labels body the Australian Record Industry Assn. (ARIA) is against legalizing copying. "Copyright holders have the right to control how their copyright is used," insists ARIA CEO Stephen Peach. He claims that any retreat from that policy would "confuse consumers."

In 1984, ARIA's own proposal to introduce a blank-tape levy was rejected by the Australian High Court as unconstitutional, after tape manufacturers and equipment companies challenged the plan in court.

APRA's Cottle acknowledges that peculiarities in the Australian Constitution pose "quite serious drafting and practical problems in enacting a (levy) system." Those problems do not exist in countries like Finland, Germany and Canada, where levy systems have been introduced, he adds.

Tripp initiated preliminary discussions in May with government intellectual property advisers in the Attorney General's Department and the Department of Communications, Information Technology & the Arts. The Attorney General's Department provides support to the government in maintaining and improving Australia's legal system.

Tripp then sought support for a legal change from 25 music-industry associations. These included labels' body Australian Independent Record (AIR), the Australian Music Retailers Assn. (AMRA), the Music Managers Forum, the Country Music Assn. of Australia and the Folk Alliance of Australia.

AIR and AMRA say they will discuss Tripp's proposal at the board level; other bodies confirm that they are considering it. All would be expected to make individual representations to the government on how their members would benefit from the change.

The Australian Consumers Assn. is backing Tripp's campaign. "The FTA coming before Parliament seeks to adopt the draconian U.S. line on copyright without attending to crucial aspects of consumer protection," says senior policy officer Charles Britton.

"The U.S. has a constitutional guarantee of free speech," he points out, "(but) we do not. The U.S. has fair-use provisions that provide some level of protection for consumers in home copying. We do not."

Britton says the Copyright Act must be changed with the advent of the FTA in order to strengthen consumer' rights.

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French Music Biz Begins Suing P2P Users

By James Martin

PARIS -- The French music industry has filed its first legal procedures against individual peer-to-peer users.

Labels' collecting society the SCPP on July 28 filed 20 anonymous charges based on the Internet addresses of alleged music pirates. The filings are similar to the RIAA's "John Doe" process in the United States, implemented when the names of the accused are not known. To date, the RIAA has filed more than 3,000 suits against individual file sharers.

The French industry's actions follow the mid-May passage of the European directive on e-commerce. The industry had waited for the legislation to pass in order to have a legal backdrop for its lawsuit.

"What we are after is fines and community service-type condemnations," says SCPP director general Marc Guez. "We want this action to be dissuasive, not repressive."

SCPP's past actions against peer-to-peer services has mainly resulted in suspended prison sentences.

"Once people have been punished for using P2P, they'll go to iTunes and other services and acquire music legally. That's what happened in the U.S.," says Guez. He adds, "We won't wait for the results of these lawsuits before filing new ones."

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German Mechanicals Dispute Heads To Arbitration

By Wolfgang Spahr

Reinhold KreileHAMBURG -- The ongoing dispute between German authors rights society GEMA and the local IFPI affiliate over the latter's plan to cut the mechanical rate is set to go before arbitration.

GEMA chairman Reinhold Kreile confirms that oral proceedings are due to commence before the German Patent and Brand Office on July 28.

Speaking before GEMA's annual general meeting June 30 in Berlin, Kreile told more than 800 members that the society would stand firm in its opposition to the IFPI's proposed royalty cut. According to Kreile, GEMA has the support of BIEM, the trade body representing European societies that collect mechanical rights.

"The willingness to negotiate cannot be imposed from above and certainly not by dictating the terms on a one-sided basis, as IFPI seems to think," Kreile said. "Authors' rights to reasonable remuneration will not yield to force."

The German chapter of the IFPI in January applied for the mechanical royalty rate to be slashed to 5.6% from 9.009% of the PPD (published price to dealers). Approval hinges on an arbitration tribunal decision that could take up to five years.

Kreile says he rejected an IFPI proposal for a "triple-eight agreement," which would provide for royalties of 8% for all types of utilization.

"In the interests of their composers, lyricists and publishers, GEMA will not be succumbing to the dubious charm of this offer, as it also entails a massive reduction to the tune of over 100 million euros ($121 million) in the remuneration previously paid," he said. Kreile added that it was unwise of the recorded music industry to attempt to restructure the market at the expense of authors.

"The structural crisis afflicting the record market for which the industry does not have any clear solution is of great concern to authors and their publishers who are unable to influence this situation," said Kreile.

Gerd Gebhardt, chairman of the German IFPI, would not comment on the negotiations other than to say, "It's an ongoing procedure."

GEMA recently reported total revenues of 813.61 million euros ($989.76 million) for 2003, up from 812.51 million euros ($988.42 million) in 2002.

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Dublin Seminar Tackles Global Piracy

By Emmanuel Legrand

LONDON -- With international pirates becoming increasingly sophisticated, law enforcement agencies, governments and intellectual-property rights owners must step up their efforts and their cooperation to successfully combat the global piracy problem.

This was the message from the World Anti-Piracy Enforcement Conference, held June 29-July 1 in Dublin.

Iain GrantOrganized by the IFPI and hosted by Irish recording-industry association IRMA, the seminar drew more than 150 law-enforcement officers, anti-piracy investigators, record-company executives and others in the IP community.

Citing a statistic that two out of every five physical recordings is an illegal copy, Iain Grant, head of the IFPI's enforcement department, tells ELW, "The music industry is under severe attack."

The IFPI estimates the value of the pirate music market in 2003 at $4.6 billion.

"Pirates have become more global and growing in sophistication," says Grant. "But we too are getting more sophisticated in our efforts to crack down on piracy. We're getting more seizures, more cases (to court). But we need more from governments, more from law enforcement."

Rick DobbisIn his opening remarks at the conference, Sony Music International president Rick Dobbis called for sustained lobbying of governments that fail to enforce IP rights. He also highlighted the need for strong cooperation with allied industries.

The conference featured guest speakers John Newton, crime intelligence officer from Interpol, and Maciej Lubik, World Customs Organisation regional intelligence liaison officer for Central and Eastern Europe.

Keynote speakers included Pat Brehony, detective superintendent of the Irish police service's National Bureau of Criminal Investigation, and Army General Anatoly S. Koulikov, deputy chairman of the law enforcement committee of Russia's State Dumas. (Russia, one of IFPI's priority countries, has Europe's highest domestic piracy level.)

There were also representatives from sister organizations such as the Motion Picture Assn. of America, and members of the computer software and videogame industries.

"We all have a stronger sense that we need to work together to enforce the protection of intellectual-property rights," says Grant. "There are more synergies between organizations, companies, governments and enforcement agencies."

He adds, "If we are looking now at where we were five years ago, one thing that has been pivotal has been the recognition by governments and law-enforcement agencies that organized crime is at the back of music piracy."

To back this claim, IFPI presented during the seminar a report on recent cases that show the extent of organized crime in piracy.

Among the examples were:

1) the arrest of 21 people in Italy allegedly running a major piracy network that involved the importation of blank CD-Rs from Southeast Asia

2) the discovery of a clandestine plant in Russia capable of producing 18 million DVDs a year

3) a trail of corruption over the illicit importation of more than 1 million blank discs in Paraguay that led to the resignation of the Minister of the Interior and heads of police and customs

and 4) the dismantling in the Philippines of a major CD-R piracy ring based in nine separate locations that was estimated to be supplying more than 50% of the pirated music in Manila.

The IFPI -- through its central office in London, regional offices and national affiliates -- has a global anti-piracy team of more than 200 investigators and analysts. Most are former law-enforcement personnel.

Grant says the IFPI's forensic scheme put in place several years ago is now a key tool in identifying the manufacturing source of pirate CDs and factories. Together with law enforcement and customs, the industry aids in the seizure of about 50 million discs annually.

"We've clearly seen the benefits of our forensic program," says Grant.

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German Label Execs Sentenced In Copyright-Infringement Case

By Emmanuel Legrand

Cesaria EvoraLONDON -- A court in Grasse, France, has sentenced the chief executive and the sales manager of a German company who in June were found guilty of distributing without authorization material by Cape Verde music artist Cesaria Evora.

The court ruled that the company, Berlin-based Ricord, did not own the rights to the CDs. Evora is signed to Paris-based indie label Lusafrica, which is licensed to BMG for the world.

The case was brought to court by French collecting society SCPP, after Ricord was found selling allegedly pirate material at the Midem music-industry trade fair in 1999.

The chief executive of Ricord, Ulrich Blobel, was sentenced to a six-month jail term and fined 20,000 euros ($24,340) for selling counterfeit products. The jail sentence is not suspended because Blobel was previously convicted for similar offenses in France.

In addition, the court ordered Blobel to pay SCPP 32,000 euros ($38,944) in damages.

The sales manager of Ricord was fined 5,000 euros ($6,085), with no prison sentence.

Blobel says he plans to appeal.

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Composer Wins British Court Case Against Hyperion

By Roger Pearson

LONDON -- A composer who claimed that four of his arrangements were released on CD without his approval and without naming him as the author last week won a High Court claim for damages.

The judgment was in respect to three of the compositions.

Baroque music expert Dr. Lionel Sawkins of Beckenham, England, is known for his adaptations of works by French composer Michel-Richard De Lalande (1657-1726).

Sawkins sued British classical label Hyperion Records Ltd. in May, claiming it had breached his copyright by releasing a CD containing four De Lalande arrangements recorded in October 2001 (ELW, May 17).

The works in question were "Te Deum Laudamus," "Venite Exultemus," "Panis Angelicus" and "La Grande Piece Royale."

The judge, Mr. Justice Patten has ruled that in respect to three of the works, it was only Dr Sawkins' efforts in transposing the source material and, where necessary, correcting it, that rendered them playable.

He said: "These re-created passages are sufficient in themselves to create a separate copyright in favor of Dr. Sawkins in his edition of that work."

However, with respect to "Panis Angelicus," which is from the grand motet "Sacris Solemniis," he ruled that the scale of Sawkins' editorial interventions was not sufficient to create a new copyright.

During the legal procedures, Sawkins claimed that in 2001, he discussed with choir/orchestra Ex Cathedra Ltd. plans for them to hold concerts in Birmingham and London using his scores, with a recording to be released on CD by Hyperion.

However, he claimed that Hyperion never agreed to his contract terms relating to t he use of his works, and that the agreement was never signed.

Nevertheless, he said that in October 2001, Hyperion released worldwide recordings of the four pieces as part of the CD "Music for the Sun King."

Damages will be assessed at a future hearing. The plaintiff is seeking damages of 15,000 pounds-50, 000 pounds ($27,300-$91,000), plus interest, an injunction barring further sale of the CD and an order that all existing copies be handed over to him or destroyed.

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Dream Makers & Deal Breakers

This Week's Dream Makers & Deal Breakers:

Daryl FriedmanThe Recording Academy has promoted Daryl Friedman to VP of advocacy and government relations.

Friedman, who has been executive director of the Academy's Washington, D.C., chapter since its inception in 1997, oversees legislative issues to support the organization's artist members. He is an advisor to the U.S. House of Representatives Recording Arts and Sciences Caucus, and works with the Academy's other chapters on educational initiatives. He also oversees the Grammy Cultural Policy Initiative, working to advance the rights of the music community.

Friedman serves on the boards of SoundExchange and the National Music Museum and Center.

Before joining the Academy, he directed external affairs for the Wolf Trap National Park for the Performing Arts.

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Case Analysis

Recent Cases & Filings:

Case: Universal-PolyGram International Publishing Inc., et al., vs. EMI April Music Inc.

Issue: Publisher Universal-PolyGram alleges that EMI, as a successor-in-interest in various agreements, has wrongfully retained royalties derived from the score of the 1984 film "The Terminator."

Cite: California Superior Court, County of Los Angeles (case no. BC317761).

Filing attorneys: Paul M. Zieff and Mark A. Kahn, Rogers Joseph O'Donnell & Phillips

Paul M. ZieffMark A. Kahn


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Commentary

Beltway Awash With Asinine Acronyms

By Bill Holland

Since the New Deal of the '30s, federal policymakers and their staffs have had a thing for legislation acronyms -- from the WPA to the DMCA.

These days, this shorthand is often useful and necessary in a town dotted with buildings housing the DOJ, FCC and HUD. But sometimes things go wrong.

By way of history, consider that the now-disgraced Copyright Arbitration Royalty Panel, created by Congress in 1993, was shortened to CARP.

It's bad enough that the panel was given the name of a bottom-feeding fish, but that's nothing compared to what might have been its acronym.

The original full title of the part-time panel was the better-parsing Copyright Royalty Arbitration Panel. As it turns out, that hushed-up original acronym was apparently all too accurate.

Now, along comes a bill (introduced June 22) to snag peer-to-peer companies that prey on young "consumers" by inducing them to violate copyright law.

Orrin HatchThe staffers in the offices of Sens. Orrin Hatch, R-Utah, and Patrick Leahy, D-Vt., the co-authors of the bill, wanted to call the measure the Induce Act.

Hatch's introductory comments on the floor of the Senate were serious, referencing literature and film.

"Artists realize that adults who corrupt or exploit the innocence of children are the worst type of villains. In 'Oliver Twist,' Fagin and Bill Sikes profited by inducing children to steal.

"In the film 'Chitty Chitty Bang Bang,' the leering Child-Catcher lured children into danger with false promises of free lollipops.

"Tragically, some corporations now seem to think that they can legally profit by inducing children to steal -- that they can legally lure children and others with false promises of 'free music.' "

So far, so good.

Then, however, a draft of the bill was circulated to Senate offices and the press with the Demosthenic title "the Inducement Devolves into Unlawful Child Exploitation Act of 2004."

Insiders say the labored mouthful immediately caused guffaws in government-relations offices all over Washington, and on the Internet as well. Opponents to the measure's serious content had a field day laughing down the title, especially the use of the seldom-employed word "devolves."

Some weighed in that the anonymous "namers" had not only come up with a nearly unpronouncable title, but one that carried an acronym that didn't even play by the rules of employing the first letter of each word.

"The subject is serious, whatever you think of it," chuckled one lobbyist, "but that goofy title might as well have honked like a duck."

On June 22, mysteriously, the bill no longer carried the mouthful title, but the trimmed-down full name "Inducing Infringement of Copyrights Act of 2004."

IICA. Pure poetry.

Bill Holland



Bill Holland is Billboard's Washington, D.C., bureau chief.








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