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October 24, 2002 Pirates hurting music industry, speaker says



by Brad Hunter

The recording industry’s future looks bleak unless music piracy is brought under control, said Christine Prudham, vice-president of legal and business affairs at BMG Canada.

“One-third of our market has collapsed in the past three years,” Prudham said during a talk last month hosted by the John Molson MBA program. “Simply put, there can be no sustainable business model with such numbers.”

Prudham placed the blame for the recording industry’s woes squarely with file-sharing sites like Kazza that enable users to download songs for free and then record them.

When it comes to using such sites to download music, she told the audience at the de Sève Theatre that Canadians are at the top of the list. Per capita, we download the most music in the world, roughly 1.47 billion downloads last year.

In fact, Prudham said the illegal music market is now bigger than the legitimate market, a situation that has led to “brutal” consequences for the recording industry. Companies must cut at least 20% of their employees, she said.

It isn’t just record companies, a group for whom many consumers have little sympathy, that are being hurt by rampant piracy. Prudham warned that music fans will also suffer if things don’t change.

“If you take away the reward for making music, music will stop being made,” she said. The idea that widespread swapping of copyrighted music means record companies can’t afford to release new material is central to a recently launched campaign by the Canadian Recording Industry Association to persuade consumers to buy music the old-fashioned way, in a record store.

The Keep Music Coming campaign, unveiled last Sunday to coincide with the Juno Awards, is targeted at teens, a group Prudham said views downloading music from Internet as the only way to get their music.

“If you’re in your teens, we’ve already lost you,” she said. “You don’t know what it’s like to go into a record store to buy music.”

Prudham called the Keep Music Coming initiative a “co-operative” way of changing people’s attitudes towards music piracy, an approach quite different from that taken by the U.S. recording industry which has emphasized the illegality of file-sharing.

However, she pointed out the Canadian recording industry has not hesitated to aggressively pursue outfits like Kazaa and Napster that enable one to illegally download music.

“Will we survive? We really have no idea right now,” Prudham said, “but something must be done to get back to being a sustainable industry that can promote new talent.”