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Music chiefs warned of piracy threat


Music chiefs warned of piracy threatCANNES, France -- The music industry is losing up to $5 billion a year through pirated music a year, according to the industry's chief watchdog.

He warned record companies that 500 million fake CDs are being produced annually and that in the worldwide fight against CD pirates "we are still in the heat of battle."

Huge profits have attracted organised crime, he told industry executives, with pirate CDs accounting for 20 percent of worldwide CD sales.

Jay Berman, head of the International Federation of the Phonographic Industry (IFPI) and music's global crime buster said: "Piracy is still an incredibly difficult problem to deal with."

Berman issued his alarm call in Cannes where the industry's biggest trade fair has attracted 10,000 music executives from 96 countries.

"Piracy has become global. This is not just a group of guys in a garage trying to make a buck with a few decks," he said.

"There are enormous pirate exports around the world. The production capacity is staggering and organised crime is playing a growing role.

"In Britain what turned out to be the largest credit card fraud ring was a Russian Mafia operation that started with pirated CDs."

Threat from cyberspace

IFPI, which represents 1,400 record producers and distributors, says it recognises the need to embrace new technologies but believes it is crucial to expand in the right legal environment with enough global safeguards.

Fake CD seizures are running at approximately 60 million a year. IFPI said it has 100 international investigations in progress and legal settlements have totalled more than $3 million in the last 18 months.

Another big threat is the Internet pirate and sites such as Napster, which is currently embroiled in a legal action over copyright laws in the United States.

The industry, which argued Napster was breaking copyright rules by allowing music to be downloaded for free, is waiting for the U.S. court's decision.

Berman said: "There are millions and millions of illegally posted recordings on the Internet."

A single 10-minute search in November for Phil Collins and Blur found more than 5,600 infringing files of songs by both artists, he added.

Reuters contributed to this report.

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