Bootlegger's paradise - Connection - Brief Article

Latin Trade, Nov, 2002 by Michelle Guevara

Pirated compact discs are a trademark of busy intersections in Latin America. Now street hawkers face a new competitor, the rewritable compact disc, one the music industry says costs them billions.

* The price of so-called CD-R drives needed to record music onto the durable, ubiquitous discs plunged, while supply from Asia skyrocketed. "There is such a high overproduction of CD-R drives now, and they end up in Latin America," says Gartner analyst Mary Craig.

* Piracy has soared, costing record companies close to US$2 billion in lost sales, says the International Federation of the Phonographic Industry (IFPI). Brazil, once the sixth largest market for music in the world, has dropped to twelfth place, selling 60% less than five years ago, the group says.

* Ninety-five percent of music sold in Peru is on bootlegged discs. Major international record companies have already shut down operations in the region due to huge profit declines. "BMG doesn't have operations in Peru anymore. EMI doesn't either. Sony, Warner and Universal are in dire straits," says Raul Vazquez, regional director in Latin America for the IFPI.

* As record companies run away from Latin America, investment in the industry is vanishing, leaving Latin Americans--ironically--to rely on bootleg copies from the street corner.