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What Is Sound
Recording Piracy?
Sound recording piracy and counterfeiting have adversely affected the
recording industry since its earliest days, but with the development of
tape technology, record piracy has become a major criminal activity.
Music pirates account for almost $300 million in lost record sales
annually in the United States. And, because the potential profits record
pirates can earn are enormous, an increasing number of people are
attracted to it.
Unlike a record company, the pirate bears none of the initial cost of
searching for talent, creating, producing, marketing and publicizing a
recording, which can add up to millions of dollars. Nor does a pirate
pay union fees, artists, back-up vocalists and musicians,
publishing/songwriter royalties or taxes. Beyond the cost of purchasing
a single commercial copy for use as a master, the pirate incurs only a
per unit manufacturing cost of well under a dollar.
The general term 'piracy" refers to the illegal duplication and
distribution of sound recordings and takes three specific forms:
counterfeit, pirate and bootleg.
Counterfeit recordings are the unauthorized recording of the prerecorded
sounds, as well as the unauthorized duplication of original artwork,
label, trademark and packaging of prerecorded music. Counterfeit
recordings usually display the following characteristics:
Produced by obtaining a legitimate recording and duplicating subsequent
counterfeit copies and reproducing artwork and packaging. Scale of the
reproduction facilities ranges from backroom operations using cheap dual
cassette players and rented photocopiers to illegal factories equipped
with professional commercial sound reproduction and printing equipment.
Almost always found in cassette format but occasionally as long playing
vinyl albums (particularly of back catalog recordings). Counterfeit CDs
are also beginning to appear.
Street prices of counterfeit cassettes range from $3 to $5 compared to
legitimate recordings that generally range from $7 to $10.
Jackets, labels and insert cards tend to have blurred printing, poorly
reproduced colors or photographs. Insert cards are sometimes made of
paper rather than heavy card stock and usually do not carry liner notes
or lyrics. The sealed folds from shrink-wrapping are often looser or
sloppier than the original product.
Pirate recordings are the unauthorized duplication of only the sounds of
one or more legitimate recordings. Pirate recordings usually display the
following characteristics:
Produced by procuring legitimate recordings and duplicating them.
Format of choice is audio cassette, occasionally vinyl albums and,
increasingly, CDs.
Street value is around $10 for a 90-minute compilation tape.
Unauthorized compilations (collection of different recordings by one or
more artists compiled as a package) of different artists are common on
pirate tapes.
Cassette packaging is inferior, generally uses only one color, minimal
artwork and a typewritten or crudely printed list of tape contents.
Generic artwork may be used instead of photographs or pictures of the
recording group or artist.
Unfamiliar or fictitious company names of alleged manufacturers or
distributors are often listed or no company names are listed at all.
Bootleg recordings are the unauthorized recording of a musical broadcast
on radio or television or of a live concert. Bootlegs, also known as
underground recordings, usually display the following characteristics:
Produced by taping live concerts using a portable cassette recorder, or
taping directly by tapping into the venue's sound system or illegally
procuring studio outtakes.
Still found in long playing vinyl album format, occasionally in cassette
format and increasingly in CD format.
Street value ranges from $15 to $100.
Vinyl packaging usually includes a two-colored sheet of printed paper
describing contents of the album and attached to the jacket cover by
adhesive backing or loose and inserted under shrink-wrap.
CD packaging usually incorporates a multi-colored insert of a folded
sheet of paper as opposed to a multi-page booklet.
Name or trademark of the performer's legitimate record company is not
included, but names of fictitious manufacturers often are.
Top
Who Gets Hurt By Piracy?
Consumers are the ultimate victims of sound piracy. Most illegal
recordings are inferior in sound quality, often defective and sometimes
are of an artist other than the one represented on the packaging. And as
illegal recordings cannot be or exchanged, the consumer is stuck with
the inferior product. In addition, the financial loss incurred by record
companies, as a result of piracy, ultimately drives up the price of
legitimate product.
Retailers and distributors lose sales to pirates because they cannot
compete with the low prices charged for cheaply-produced, illegal
copies. In some cities, illegal street vendors sell counterfeit
cassettes literally on the doorsteps of legitimate retailers. According
to legitimate retailers, these street vendors can usurp 35 to 40 percent
of their business.
Recording artists, producers, composers, publishers of the compositions,
musicians and vocalists who helped make the record, as well as
musicians' unions, are all cheated by pirates out of their share of
royalties. These people in the music community generally depend on
royalties for their livelihoods, but more important their reputations
are damaged when consumers unknowingly purchase poor quality copies of
their work.
Record companies invest a great deal of artistic and technical skill,
money and effort to create the master recording from which legitimate
commercial copies are made. These companies also expend huge sums to
search for, develop and popularize performers. Pirates do not bear the
continuing costs of union fees, as well as contractual and statutory
royalty payments. In today's marketplace, 85 percent of the records
released do not recover production costs. Record companies rely on
income from the 15 percent of recording that are successful to subsidize
less profitable types of music (classical, jazz), new performers and
composers.
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What Does the Law Do?
For many years, the unauthorized duplication of sound recordings, though
always a problem for the recording industry, remained relatively stable.
However, by 1962 record piracy had increased to a point that Congress
enacted a statute making it a crime to transport, with fraudulent
intent, records with forged or counterfeit labels.
With the development of tape recording, 8-track cartridge and cassettes,
as well as high-speed, relatively low-priced duplicating equipment, the
piracy problem began to grow at an alarming rate. Congress responded to
the crisis by enacting the Sound Recording Amendment Act of 1971. Today,
record, tape and CD piracy activities encompass crimes punishable on
both the federal and state level.
Federal Laws
The three primary federal laws used to combat this crime are:
1) U.S. Copyright Law {Title 17 U.S.C. Section 101 et seq., Title 18
U.S.C., Section 2319 and Section 2319A}: The federal law protects sound
recordings first "fixed" as of February 15, 1972. The law
protects copyright owners from the unauthorized reproduction or
distribution of sound recordings to the public. Section 2319 applies
only to those recordings that are "fixed" with authorization
on or after February I 5, 1972 (that is, when the performance is put
into a tangible form such as a tape, record or CD).
Those recordings "fixed" prior to February 15, 1972, are
protected by criminal law through a state's unauthorized duplication
statute. On the civil side, recordings are protected by a state's
competition laws.
Criminal sound recording copyright infringements are punishable by up to
five years in prison and $250,000 in fines. Repeat offenders can be
imprisoned up to 10 years. Individuals may also be held civilly liable
to the copyright owner for actual damages or lost profits or for
statutory damages up to $100,000 per infringed copyright.
2) Trafficking In Counterfeit Labels {Title 18 U.S. C., Section 2318}:
This statute covers counterfeit labels intended to be affixed to a sound
recording. A "counterfeit label" includes any component of the
entire package of a prerecorded audio cassette, company disc or album
cover. The definition also extends to a situation where counterfeiters
have simulated "genuine" labels that have not previously
existed. A person can be convicted under this law for trafficking in a
finished product that contains a counterfeit label, as well as a
component of that product, such as the insert card for an audio
cassette. This statute imposes penalties of up to five years in prison
and/or $250,000 in fines.
3) Trademark Counterfeiting {Title 18 U.S.C. Section 2320}: This statute
deals with sound recordings that also contain the counterfeit trademark
of the legitimate manufacturer or artists. The statute covers the
"trafficking" as well as attempting to traffick goods
containing the counterfeit marks. The penalties imposed by this statute
for legal entities, such as corporations, range from $1 million to $5
million. Penalties for individuals range from five years in prison
and/or $250,000 in fines to 15 years in prison and/or $1 million in
fines.
4) Anti-Bootleg Statute {Section 2319A}: This federal anti-bootleg
statute was created in December 1994. Like the pre-existing state
statutes, the new federal statute criminalizes the unauthorized
manufacture, distribution or trafficking in sound recordings and music
videos of "live" musical performances. However, the federal
statute also provides for the seizure of bootleg recordings or music
videos manufactured outside the United States by U.S. Customs at the
point of importation. In effect, bootleg recordings are now subject to
seizure and forfeiture in the same manner as other property in violation
of customs laws.
State Laws
Nearly all states have piracy related laws that make it a criminal
offense to pirate, counterfeit or bootleg audio recordings. The three
most commonly used state laws are:
1) True Name and Address Statute: This statute mandates the actual name
and address of the manufacturer of a sound recording be displayed on the
packaging. Because pirates, counterfeiters and bootleggers generally do
not display their true name and address on illegal product, they are
usually in violation of this statute. All sound recordings, regardless
of the date of fixations are covered under this statute.
2) Unauthorized Duplication Statute: Pirate and counterfeit sound
recordings "fixed" prior to February 15, 1972 are covered by
this statute.
3) Anti-Bootleg Statute:Arenas, promoters and performers are protected
against piracy under this statute, making it a crime to manufacture the
sounds of a live performance of an artist and to distribute these
reproductions.
Many of these state statutes carry a maximum penalty of up to five years
in prison and a $250,000 fine; other state statutes carry misdemeanor
penalties.
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