Burning issue: the high cost of CD piracy

Record companies are fighting back against illegal CD copying - but is it a losing battle? LOUISA CLEAVE reports.

Michael Glading knew it was time to tackle CD piracy when his 12-year-old daughter told him prices at her intermediate school were falling from $10 to $5 each.

The managing director of Sony Music tells another story which made him realise CD copying, or "burning", had become epidemic - a child's birthday party where copied CDs were included in gift bags made up by the parents.

Within a month of hearing these anecdotes, Mr Glading, who is also president of the Recording Industry Association, had convinced his colleagues they needed to act fast.

The record companies banded together, got local musicians on board and hired a PR firm to launch a $250,000 education campaign, highlighting the damage copying could cause to struggling musicians and the local music industry.

It is not the first crackdown on copying - remember the "don't tape tapes" message of the 1970s? - but the industry says it is vital for the long-term survival of Kiwi musicians.

"Burning" has created a black market in pirate CDs in schools and, increasingly, at weekend markets.

The hardware - a CD writer costing $325 to $500 - is attached to a computer and records data stored on the computer hard drive.

The legitimate use of a CD writer is to keep backup files of work, but the most common use is to digitally copy music from original CDs, websites, or via file-sharing programmes such as Napster, which itself has run into trouble with international record companies.

CDs can be played on any computer with a CD-Rom (Read Only Memory), and can be downloaded on to the computer hard drive using readily available software, such as Windows Media Player.

The "data" can then be copied on to a blank disc, priced as low as $2 if bought in bulk, using the CD writer.

The other form of burning is on CD-R machines, which act in the same way as a double cassette deck - one drive plays the CD and the other records it. Song by song recording has to be done in "real time" but entire albums can be burnt off in 20 or so minutes.

These machines cost more - $800 to $900 - and require higher-quality blank audio discs.

The music industry says the practice is rife among teenagers. They sell copies of popular music to their mates at cut-price rates of $5 to $10 for an album that would retail for up to $35.

A North Shore teenager the Herald spoke to said video games were the hot item at his school.

Children are buying copies of PlayStation games - such as Final Fantasy 9, Grand Theft Auto 2, and Grand Turismo 2 - normally worth $100 each for as little as $5. One of his friends has a library of 50 copied games, worth $5000 from a shop.

But adults are also doing it. Like the professional who compiles CDs of dance tracks downloaded from internet music sites and sells them for $20 a pop to nightclub DJs.

"While it appears that much of the CD piracy can be attributed to younger age groups, no one music type is immune," says Mr Glading.

"We have heard about instances of people using CD burners at their workplaces to copy CDs."

American pop act Destiny's Child, English rock star Robbie Williams and Britney Spears are said to be big sellers. Kiwi music is also holding its own in the playground, with Che Fu and the feelers in high demand.

Dave Dobbyn is probably less popular with the kids, although the New Zealand singer is fully behind the industry's Burn and Get Burnt campaign.

"If I don't do anything to educate on the potential outcome of burning CDs, where will the next Dave Dobbyn come from?" he asks.

"I'm backing this to ensure there will be a music industry around to support new artists in the future."

Efforts to crack down on piracy are often countered with the popular argument that people copy CDs because they are too expensive.

The industry replies that the price of a CD reflects the money and effort which has gone into making and promoting the album.

It also says CDs are cheaper in New Zealand than in countries such as Britain, where an album can cost up to $60.

The campaign takes an educational approach, talking about the moral and legal implications of burning, and appealing to people's sense of right and wrong.

It uses text message language - 'BRN>BRNT' - to appeal to the target audience of 12 to 24-year-olds.

The slogan will appear on CD covers, inner sleeves, posters, music ads and at music events over the next three months. The ultimate message is that people risk being prosecuted for breaching copyright laws.

The association has hired private investigators in Auckland and Christchurch to investigate the more serious cases.

One investigation centres on an Auckland business venture which provided CD writers - in a similar form to a "jukebox" - to shops around Auckland.

An investigator, a former police officer, is checking the level of piracy at weekend markets in South Auckland and central Auckland.

Although taping music has been common for years, the association says advances in digital technology have made copying more appealing and lucrative.

Duplicating tapes used to be time consuming and resulted in a loss of quality. The equipment available today gives copies the same sound quality as originals, and burners can copy a CD in one-twelfth of the time it takes to play.

The practice is illegal because music on CDs is protected under the Copyright Act 1994.

Bell Gully lawyer Michelle Chignell says a buyer's rights are limited to playing the music in private. It is even illegal to make a copy for private use.

There are limited exceptions, such as educational, library or archival uses.

Breaching copyright can incur a fine of $10,000 an infringement.

The association admits that policing copyright infringement is difficult and it would rather try to educate people than prosecute.

For record companies, the ideal solution would be technological improvements which make burning impossible. So far this is proving elusive.

When Natalie Imbruglia's latest CD, White Lilies Island, was released in Britain this month, it came with copy protection, known as the Cactus Data Shield.

British consumers found that when the album was played through a CD-Rom it whirred instead of rocking.

Unfortunately, it would not play on car stereos, PlayStation 2 and some DVD players either.

The record company, BMG, has stopped issuing CDs with copy protection for now, but insists the technology will work soon.

"This will get sorted out," a company representative told London's Independent newspaper. "Copy protection is the way forward."

The newspaper said record companies had identified teenagers as their first targets in an effort to stamp out CD burning.

The Imbruglia disc was the first commercial CD sold in Britain with copy protection, and BMG said it was chosen because "we had to start somewhere".

Universal has said it will move to put copy protection on all its new releases.

EMI has a testing programme, and Sony is examining its options.

The unanswered question for music fans and the industry is whether copied CDs truly represent lost sales, or whether they mean people are listening to music that they would not have bought anyway.

Many internet users claim access to "free music" previously available on services like Napster can boost sales of legitimate issues.

Napster's surveys have shown CD sales increased around American colleges, where use of its internet service was high.

In one case, Radiohead, one of EMI's biggest groups, had songs from their album Amnesiac available on the internet before the CD was released. The album went to number one in the United States.

The association says that one copied CD is not necessarily one lost sale of the original, but it claims damage is being done to legitimate recorded music sales.

It says global music sales were 5 per cent down for the first half of last year, and the German music industry reported a 25 per cent slump.

At the launch of the Burn and Get Burned Campaign, Mr Glading described burning as a threat to an otherwise healthy New Zealand music industry.

"New Zealand music sales are growing, that's the most exciting thing. There is growth in New Zealand artists and I believe the volume of New Zealand artist sales over the next five years can double."

It is an achievable goal, he says, but only if legitimate sales are not scuttled by a black market in copied CDs.

CD piracy at a glance

The scale of the problem: Record companies predict the number of illegally copied or "burned" CDs around the world will match legitimate sales by the end of this year. In New Zealand it is estimated at least half the 130,000 to 200,000 blank CDs bought each month are used for illegal copying. In comparison, about 650,000 original singles and albums were sold here each month last year.

The teenager's view: "I'm saving myself hundreds - even thousands - of dollars by giving my mate $5 for a copy of his original CD or video game. We can find and download songs off the internet before they are even released in New Zealand. Music is free to our generation, and everyone is doing it. So what's the big deal?"

The music industry view: "People are stealing the intellectual property of musicians and threatening the future of the industry by ripping off the system. It's costing us $95 million a year in lost retail sales, but it's not just about the money - it's illegal."