Industry targets foreign downloads

Oakland Tribune, Jan 26, 2004 by Cecile Daurat, Bloomberg News

A music group including companies such as Universal Music Group and EMI Group Plc said it will take legal action against unauthorized people downloading songs from the Web outside of the U.S. as part of a plan to combat online piracy.

Lawsuits against U.S. individuals, started in September last year, helped curb the number of unauthorized music files available online to 900 million this month, from an estimated 1.1 billion in April last year, the International Federation of the Phonographic Industry said in its Online Music Report 2004.

"The U.S. will not remain an isolated incident," IFPI Chairman Jay Berman said at a press conference at the group's headquarters in London. "There is a new sense of fighting back in the industry."

EMI, Universal Music and rivals including the record units of Sony Corp. and Bertelsmann AG have blamed free downloading and file- swapping for a four-year slump in the $28 billion industry.

Still, the majors, also including Warner Music, have only in the past year stepped up plans to make more songs legally available for a fee.

The Recording Industry Association of America, the U.S. industry group, yesterday said it sued 532 people it claimed are illegally posting music on the Internet for free downloads, in the latest round of U.S. lawsuits targeting consumers.

The record industry, however, last month suffered a setback in its legal fight against piracy.

A Washington court held that a 1998 copyright law doesn't authorize record companies to force Verizon Communications Inc. to name subscribers who may have shared songs.

Legal actions have been taken outside of the U.S., including a pending case against a Spanish Web site and criminal complaints against 100 users in South Korea, IFPI said.

"Litigation is the option of the last resort," said IFPI lawyer Allen Dixon. "But we won't be shy about suing," he said, declining to elaborate.

The number of songs available legally, albeit rising, still pales compared with the files on free swapping Web services such as Kazaa.

The number of legitimate tracks rose to 300,000 in Europe at the end of last year from 220,000 three months earlier, the IFPI report said. U.S. consumers had access to a catalogue of about 400,000 to 500,000 tracks at the end of 2003, it said.

The bright spot of 2003 was the U.S. success of iTunes, Apple's digital music software that lets Macintosh and Windows users download and organize music files, IFPI said. ITunes music store has more than 500,000 songs for sale and accounts for 70 percent of legal downloads of music from the Internet, Apple Chief executive Officer Steve Jobs said this month.

ITune was a "wake-up call to everybody in the music industry," said Ted Cohen, a vice president at EMI in charge of digital development. It was the evidence that "online music could be a viable market."

The legitimate online music industry will be boosted this year as companies such as Amazon.com Inc., Microsoft Corp.'s MSN and Wal- Mart Stores Inc. start their own services, Cohen said.