RealTime IT News

RIAA Targets Piracy 'Hot-Spot' Cities

Music piracy, long associated with peer-to-peer file-sharing networks, is a booming business offline.

Professional pirates have become more sophisticated and are costing the music industry $300 million a year, according to the Recording Industry Association of America (RIAA), a trade group that represents the U.S. recording industry.

In a report released on Wednesday, the RIAA, cited 12 piracy "hot spots" -- Atlanta, Austin, Chicago, Dallas, Houston, Los Angeles, Miami, New York, Philadelphia, Providence, San Diego, and San Francisco -- where " multi-state criminal operations" are producing and selling bogus CDs.

The RIAA plans to work with law enforcement and deploy its own investigative resources in these cities in the coming year, said RIAA spokeswoman Jenni Engebretsen.

"With the problem as widespread as it is, we have to focus our resources," she said. "So in these 12 cities we are making a commitment to step up investigative and training efforts with local law enforcement."

The RIAA also intends to shift its efforts from pursuing individuals to stopping piracy at the source of the distribution chain where, according to the report, "law enforcement can not only seize illegal goods but also shut down the means of production and thus have a far greater impact on the overall availability of pirate product."

The RIAA claims that unauthorized compilations of popular music hits and counterfeit CDs with bonus tracks are increasingly being created and offered for sale.

Engebretsen said that these CDs are sometimes purchased by consumers who are unaware that the CDs contain pirated music.

Consumers were urged to avoid purchasing deeply discounted CDs, "dream compilation" CDs (songs by numerous artists who record on different record labels), CDs packaged in shoddy wrapping (misspelled words, blurry graphics), and to avoid purchasing CDs from places like flea markets or street corners.

It's no surprise that professional piracy is on the rise, said Mike McGuire, vice president or research at Gartner.

McGuire said that the tools for counterfeiting -- DVD and CD burners and pro-level authoring software -- have gotten much cheaper and easier to use. Since the costs of producing pirated disks isn't much, distributors can charge $5 a disc and still make a profit.

He believes the RIAA can make a dent in the counterfeiters' business but said it would be difficult to end the practice.

"You could argue it's similar to the war on drugs. You can go after the demand side, but it's hard to say you'll stamp it out completely," he said. "And it's pretty hard to say to people 'don't buy that CD for $5.' There's always a demand for bargains."

But McGuire added that the RIAA needs to combat offline piracy if only to raise awareness that the counterfeited materials are being produced.

"A lot of folks were saying that piracy was only happening on P2P networks."

According to the RIAA's research, seizures of counterfeit CDs from commercial manufacturing facilities grew by 46 percent -- more than 424,000 units -- in 2005 and the total number of cases at the manufacturer level was up 7 percent. In response, legal seizures of piracy equipment grew by 57 percent in 2005.

Rap and Latin music accounted for nearly 95 percent of pirate operations stopped by authorities last year, according to the RIAA.

In other piracy news, The Motion Picture Association of America's own study, conducted by LEK Consulting, found that studios lost $6.1 billion to film theft in 2005. The majority of movie theft -- about $4.8 billion -- happened in China, Russia and Mexico.

According to an article published in The Wall Street Journal this week, the MPAA study was completed last year but the MPAA opted not to release the results publicly due to a debate among its members.

Some felt that publicizing the figures would enable the industry to push for stricter antipiracy laws and enforcement while others believed that releasing the figures would hurt stock prices and "make a laughingstock of their enforcement efforts," according to the Journal.