NEWS

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November 18, 2005

Recording industry targets widespread youth file-sharing

WASHINGTON, D.C.—During the 1980s, the music industry turned a blind eye to bootleg tapes. Record labels, which were thriving, considered the cottage industry of illegally dubbed tapes to be only a “fever.”

“We could manage it and still grow,” said Mitch Bainwol, chairman of the Recording Industry Association of America (RIAA). “The economics were just working.”

Enter the internet, and the infrastructure it created for illegal digital file sharing to blossom during the 1990s. It is at this point that the manageable fever of stolen music metastasized into a “double cancer” of physical bootlegging and internet piracy, Bainwol said.

In the effort to rein in entertainment piracy and product counterfeiting, industry leaders like Bainwol are on a campaign to mold the public’s moral attitudes.

At a U.S. Chamber of Commerce conference last Thursday, government officials, entertainment executives, and industry leaders focused on ways to cut into the $250 billion American businesses lose each year to intellectual property (I.P.) theft.

As public officials and business leaders band together to target the worldwide supply of intellectual property crimes, they also seek to diminish the demand for stolen I.P. products by making American consumers more self-conscious about what they consider theft.

The RIAA’s cure: Sue Internet music swappers until they realize that illegally downloading music over the internet is, in fact, stealing.

“We are fighting what I see as a battle of visions,” Bainwol said. “We raised awareness from blissful ignorance to ‘when you’re taking, you’re taking. It’s wrong and against the law.’”

Teenagers five years ago had a sense of entitlement to illegally download music, Bainwol said. “We’re having to go back and retrofit those values.”

Now, by comparison, teenagers are paying for legitimate music downloading services, such as iTunes, Bainwol said. “They don’t have the sense of entitlement that we have had to go back to transform.”

To David M. Israelite, president of the National Music Publishers Association, the file-sharing lawsuits have been a “tremendous help” in changing the public’s attitude.

“All the bad press has actually been good press because it’s shocked people,” he said.

I.P. theft ranges from improperly downloaded music to knock-off designer handbags to facsimile Viagra pills. I.P. theft in the U.S. costs businesses $200-250 billion a year, according to the U.S. Chamber of Commerce, citing law enforcement statistics.

Attorney General Alberto Gonzales said prosecutors are working with law enforcement officials and Congress to better target I.P. thievery.

“Our message to counterfeiters and piraters is clear,” Gonzales said. “There is nothing fake about our commitment to prosecute counterfeiters and piraters.”

Dan Glickman, president of the Business Software Alliance, said the movie and music industries are reaching out to universities in hopes of changing students’ practices.

“Since the young is where much of the problem takes place, we have to figure out how to deal with them, how to lower their demand,” Glickman said.

The I.P. problem isn’t only teenagers swapping music. Many of the parents outraged at their children’s illegal music libraries are the same people who purchase counterfeited batteries and handbags, pointed out Paul Fox, chairman of the Coalition Against Counterfeiting and Piracy.

“They’re not understanding what is happening,” Fox said. “We have a role to play in changing that.”

Speaking to a crowd of several hundred business leaders, Fox asked: “How do we ensure they move away from access to the internet? How do we steer them away from street corners, street vendors?”

While businesses suffer, I.P. theft also hurts consumers, industry experts say. Counterfeited products, especially electronics and pharmaceuticals, do not necessarily have the same quality as the originals.

“Counterfeiters don’t care about your security,” said Brian Monks, director of Underwriters Laboratories’ anti-counterfeiting operations. “They care about one thing: your money.”

In Hong Kong, entertainment bootlegging has largely been eradicated, said Josette S. Shiner, under secretary for economic, business, and agricultural affairs at the State Department. The trend away from entertainment piracy in Hong Kong began when Jackie Chan left because he could not make a profitable movie, Shiner said.

Hong Kong also has a “no fake” club, in which teenagers get access to the newest concerts and movies in exchange for pledging not to pirate media, Shiner said.

“We need to create a culture where it’s not cool to steal artistic works,” she said. “We need to make counterfeiting and piracy not cool.”

—Isaac Wolf is participating in the Scripps Howard Foundation Semester in Washington program.