The fight against piracy

A somewhat sceptical Matthew Vella speaks to IFPI Regional Co-ordinator for Western Europe Michael Ellis and Paul Warren on the pros, cons and trends of the international fight against piracy.

Two ex-policemen are drinking coffee in the office of Exotique empress Grace Borg. I am not aware that the two gentlemen used to be detectives with Scotland Yard. I was told I would be meeting Mike Ellis. But there’s a mix-up. I am convinced it is Mike Ellis, Vice-President of the Motion Picture Association Asia-Pacific, whose portfolio includes the fight against piracy.
Instead I am interviewing someone who, at first glance, is anything but a VP, with no sign of weariness from private long-haul jet flights. It is Michael Ellis, Regional Co-ordinator for Western Europe for IFPI, "representing the recording industry worldwide" as the business card that Ellis and his partner Paul Warren hand me, candidly announces.
IFPI is the organisation representing the international recording industry, fighting music piracy amongst other things, and also ‘promoting the value of music in the development of economies – another way of reminding you they are fighting piracy.
For a detective agency for corporate artistes, IFPI has done well for itself, counting amongst its members at least 1,500 record producers and distributors in 76 countries, boasting offices in Brussels, Hong Kong, Miami and Moscow, as well as London’s international secretariat.
IFPI's regional offices for Asia, the CIS countries, Europe and Latin America are responsible for implementing IFPI's strategies at regional level, co-ordinating the work of national groups and setting lobbying priorities tailored to the political environment in their regions.
IFPI's office in Brussels is the recording industry's representation to the European Union. It interacts directly with the EU institutions and co-ordinates the industry's lobbying network in Europe. IFPI's Regional Office for Asia is located in Hong Kong, with additional offices in China and Singapore. It co-ordinates the region's lobbying activities and legal strategies. IFPI's Moscow office is responsible for co-ordination and policy in Russia and the CIS countries. IFPI Latin America, formerly FLAPF, has an executive office in Miami and co-ordinates the region's lobbying, anti-piracy and communication activities.
IFPI also acts as an umbrella organisation for its 46 National Groups around the world, both through its international and regional offices. There is, in addition, an IFPI Worldwide Enforcement Structure, formed in 1997 as a direct response to the global proliferation of CD piracy. Enforcement activities are co-ordinated centrally from IFPI's London Secretariat and through dedicated enforcement offices at regional level.
Mr Warren strikes me as being more accommodating than Mr Ellis, who looks impatient and wooden in his demeanour and speech.
"Piracy is a threat to the music industry and it threatens economies in different ways. It creates unemployment, it undervalues cultures, it restricts revenue for governments and it also strangles music," Mike Ellis says.
"You take Ira Losco, who came second in the Eurovision Song Contest, as an example. Well that’s a fantastic achievement for Malta," Ellis concedes courteously, as he is asked to explain how cultural undervaluation can possibly occur through piracy, "Well, if that artist is unable to develop, if she is unable to be nurtured by the music industry, then she is being hindered from advancing in her field due to piracy."
I think cultural undervaluation is another take on the fact that people have to find other reasons than making money to justify the fight against piracy. How far cultural can the Song for Europe be? What undervaluation are we talking about? Maltese culture has already been undervalued by the Song for Europe.
"In some countries we see cases where record companies will sign 80 or 90 new artists over the course of the year. These artists have to be trained and they have to be nurtured, but because of the impact of piracy, record companies are not investing in so many artists as they used to.
"Financially there are two impacts. The first one is in terms of any revenues that could be raised by governments in the form of taxes and Value Added Tax.
"The other way is that it is an entirely black economy, where everything is conducted by cash-in-hand and where money is generated by people going straight into the pirate’s pockets."
In 2001, piracy was attributed to falls in CD sales from 4.5 per cent in the US and 9.6 per cent in Canada to 9.2 per cent in Germany, 8.6 per cent in Italy, 9.8 per cent in Austria, 14.8 per cent in Denmark and 9.4 per cent in Japan.
IFPI surveys have shown that in Germany, 18 per cent of 10,000 consumers surveyed said burning CDs resulted in them buying less music. In the US, nearly 70 per cent of people who downloaded music burned the songs on to a CD-R disc, while 35 per cent of people downloading more than 20 songs per month said they now buy less music as a result.
"Traditionally, piracy in Western and Northern Europe tends to be more under control. But in the South, such as Spain, Malta, Greece, and Italy, piracy levels tend to be higher."
The Southern Mediterranean has a reputation for crime of this sort not least due to the fact that clan-based banditry and Mafia organisation have resisted the centralisation and encroaching of the state and its laws upon their local ways of doing.
In the North, the heartland of Protestantism, industrialisation and capitalism, the State spread itself over every corner of the land it governed, and erected a successful big brother system. The South, on the other hand, has been resisting the nation-state ever since the 1800s. Crime is not endemic to our culture, but to the creation of a society imposed by Northern colonialists.
Mike Ellis, who I suppose is as anthropologically refined as, let’s say, a cop, believes it’s the weather, a comment greeted by all round laughter.
"But seriously, maybe the Southern countries are more accessible to immigrants and selling to the public tends to be easier in these countries, because they sell things on blankets in the streets, and you see people walking around with rucksacks on the beaches. In the North you don’t get much of that. You just don’t do that."
Paul Warren adds some shimmer to the argument:
"Someone suggested that they have a more café-society mentality, more laid-back, more friendly with each other." But it is not, I am afraid. It is not the difference between eggs and bacon in rainy Skegness and bread with extra virgin oil in Calabria that makes piracy more common in these parts. They forget to mention the problems of state-development in these last 200 years, an economy that tends to forget the poor, and a society that is increasingly organised around its family interests, and therefore favouring intra-familial clans rather than branching out into nuclear cells.
At first I think that both Mike Ellis and Paul Warren are about to say that it’s human nature for the Southerners to actually thrive on pirated CDs. I cannot expect them to subscribe to politically-correct views, except for describing people as caucasion or negroes. They do mention that the South is their predominantly biggest problem. They mention huge, organised, "ethnically-based" syndicates:
"Recently in Spain, about two weeks ago, there was a syndicate of some 40 or 50 people who were operating in a very organised fashion, burning CDs and selling them all across the country. The same happens in Italy and Greece."
Pasolini once called policemen vicarious workers slaving for the capitalist class. Is Michael Ellis serving the interests of corporations or customers?
"I see myself defending the interests of the customer. A lot of the time the product is of low quality, the artwork is of low quality, and the actual sound is also inferior. I am defending the customer in a different way, because time and time again we see that the money the customer is paying to the pirate is used by the pirate in other forms of criminality, which may ultimately come all the way round again and affect the society the person lives in.
"In London for example, where we had an investigation involving a Russian Mafia organisation who were actually involved in music piracy. Our enquiries with the police confirmed that the profits they were making were being channelled in other forms of criminality, namely credit card fraud and prostitution. So in another sense, society is protected."
I still fail to comprehend the anti-rationality of fighting piracy. Record companies and software producers make huge profits out of successful artists and products. Computer engineers and record producers are paid handsomely. Is not piracy the manifestation of a demand for products that are not priced exorbitantly?
"You just cannot compete with free. How can you compete with something that has no costs whatsoever. The pirate is stealing it. He has no overheads, no development costs, no recruitment costs, no investment in the artists, no taxes to pay. He simply steals it."
Paul Warren supplements the argument by reminding me that the public perception of the music industry is that a CD costs GBP15 pounds but only GBP0.80 to produce: "They don’t think about sessions musicians, studio time, sound engineers, artists, production costs, distribution costs, public relations, delivery men. The actual person and the taxes they pay the government and dividends given to shareholders are all real costs. The actual person who is making the most money is the pirate because he has no costs, everything is profit, no overheads, and he is not investing in the artists or the industry."
I interrupt: "Are not people being fed all this marketing hype every day, being thrown Playstation 2 in their faces every day from their TV. How could we expect everyone who feels they are entitled to own a P2 afford games which cost between Lm15 and Lm30?"
"You think it is natural to buy a copied CD because it is expensive? So if I walk past a shop and see a leather jacket, do I go and steal it?"
"I buy a plastic imitation."
"You can buy the plastic one, but it is not stealing."
"That is what is happening right now with piracy."
Both Ellis and Warren still believe going for the cheaper item does not make it right. We are going round in circles.
The increased availability of free music through Internet has allegedly cost global music sales a decrease of five per cent in 2001, with worldwide recorded music sales falling to over USD33 billion.
IFTI also know that apart from piracy, it is the digital revolution that accompanies the onset of better CD technology that is providing their pirate competitors access to pirate CDs. How can they stop something so easily done through an everyday personal computer? Some, like IFTI Chairman Jay Berman, call it "devaluation by mass copying and piracy".
I call it "musical devaluation by mass-hype and huge profits".
Television, magazines, and movies bombard the public with advertising, including music advertising through "synergy" marketing and "tie-in" campaigns. Films include ads for soundtracks. Lenny Kravitz and Moby all sell their music rights to car-manufacturers to ensure they can have their music heard on the unfriendly, other side of the Atlantic. Music artists do advertising for The Gap, a clothing company that employs militias and child-labourers. Why did Jamiroquai do a song for the film Godzilla? There’s no relation whatsoever. It is just a marketing ploy to heighten sales. Get your music across to cinema halls and you have more advertising.
The fact is that marketed hype has nothing to do with ‘talent’, and as Mike Ellis puts it, ‘nurturing artists’. Marketing hype takes the piss out of us to get us to buy what corporate sires the interests of which IFPI are there to protect, want us to buy.
Nobody makes a copy of a Tom Waits CD. Sure, many download Tom Waits, Leonard Cohen, Blur and other niche artistes on our PCs, although this contributes to fuelling CD purchases on one hand. It is the big artists, Top-40 sellers, Madonna, Elton John – whose sole purpose is to produce jingles for the masses and ensure million-dollar sales – that get copied, whose cheap, mass-produced value is so recognised internationally, it is not even taken into consideration whether it would be right to buy a copyrighted CD or not. Because it is not about getting to buy a CD, but to buy the new Nike, or iMac, and that is where one asks what the Rolling Stones have got to do with the new iMac.
This week’s interviewees declined from being photographed due to the nature of their work.