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One in three music CDs is stolen
A $4.6 billion global problem, with pirated discs exceeding legitimate sales in 31 countries.
June 24, 2005: 1:53 PM EDT

NEW YORK (CNN/Money) - On the eve of a crucial Supreme Court ruling on music piracy, a leading industry group claimed this week that the global black market for stolen music discs reached $4.6 billion last year -- or one in three CDs.

In 31 countries, including Chile, the Czech Republic, Greece, India and Turkey, sales of pirated discs exceeded legitimate sales, according to a report published Thursday by The International Federation of the Phonographic Industry (IFPI), which represents nearly 1,500 record companies and artists around the world.

Pirated discs, in which thieves use CD burners or other means to reproduce a collection of songs, are sold cheaply on street corners worldwide.

The trade group released its annual piracy report in Spain because, it said, piracy there is worse than in any other European country. Other countries deemed piracy hot spots include Brazil, China, Mexico, Pakistan, and Russia.

An independent analyst said it was entirely reasonable for one-third of all CD sales to be copied disks.

"China is a huge market and the majors don't sell that many units there," said Aram Sinnreich, co-founder of the media consulting firm Radar Research. "Someone has to be filling that demand."

The only good news in the report: IFPI said that the rate of growth in disc piracy has slowed to its lowest level in five years. It credited stepped-up enforcement by governments in Mexico, Brazil, Hong Kong and elsewhere.

Still, the group estimates that 1.2 billion counterfeit discs were sold in 2004, nearly double the 2000 volume.

John Kennedy, IFPI's chairman and CEO, said piracy costs jobs and hurts investment while funding organized crime.

"Over the next few years governments and society are going to have to learn to take piracy more seriously -- piracy not just of music, but in all its forms," said Kennedy.

"Looking worldwide, we are seeing some good progress by some governments," he continued. "However, too many governments are still fighting piracy with no more than announced good intentions and unfulfilled promises."

The report does not include the cost of lost sales from free Internet downloads.

Next week, however, the Supreme Court is expected to rule on whether the music and movie industries can sue online services that facilitate file-sharing over the Internet. Software today allows users to swap songs and movies for free, a feature that the entertainment industry wants to stop.

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