Asian Music: The U.k.'s Lost Market?

Each year, sales of music from the Indian sub-continent rack up an estimated £20 million ($31.34 million) at retail in the U.K. Yet a staggering 40% of that—£8 million ($12.54 million)—is being lost to piracy in a battle the British record industry as yet shows no sign of winning.

Those figures—from labels body the British Phonographic Industry (BPI)—are corroborated by the Indian Music Industry. Both organizations place the blame squarely on India's northern neighbor, Pakistan, and the eight unregulated CD manufacturing plants operating there, which have a manufacturing capacity of 150 million units per year, according to the International Federation of the Phonographic Industry (IFPI). Legitimate CD-album sales in Pakistan, based on the IFPI's shipment figures, totaled 300,000 units in 2001; the recorded-music markets in India and Pakistan are both hugely dominated by cassette sales.

"It is a massive problem, and it's linked with organized crime," London-based BPI director of anti-piracy David Martin explains. "Certain Asian 'mafia' gangs in Pakistan, India, and the U.K., who are involved in such crimes as drugs, are now pirating music because it's perceived to be a high-profit/low-risk crime. The worrying factor is its association with protection rackets and 'turf wars' in London and Manchester [England], which is why the police are becoming more involved."

The police are acting in conjunction with the BPI, local government Trading Standards officers, and the U.K.'s Customs & Excise service, which together face the uphill task of intercepting counterfeit product and shutting down illegal vendors. "At the BPI, we are registered with Customs & Excise on behalf of our members as intellectual-property-rights holders," Martin continues. "Shipments come in from Pakistan, and there've been a number of successes preventing stuff from hitting the streets. We want to wipe the middle men out—the distributors and importers—rather than hitting the [liquor stores] with maybe 10 counterfeit CDs behind the counter: You can't hit every little shop in the U.K.

"We've knocked some importers and distributors out," Martin adds, "but somebody always comes along and takes their place."

THEFT AND THREATS

Pravin Gohil is managing director of the Nuff Music label in Southall, West London—the heart of the capital's Asian community—which licenses Indian music in the U.K. from Universal Music India. "The piracy level is getting toward 50%," he claims. "You can buy a CD [from pirate manufacturers] for 24 rupees [$0.50]. It's finishing the industry. They make 50,000 of each title and flood the U.K. market."

Gohil says he has assisted the BPI in seizing more than 300,000 counterfeit CDs this year. To try and compete with pirated CDs that can offer a 300% profit at a selling price of only £1 ($1.57), Gohil has been forced to sell his licensed CDs to genuine retailers for £2 ($3.14).

But it's no longer only counterfeit CDs that are saturating the Asian market here; the pirates have now turned to DVDs, which they sell to retailers for between £0.50 and £1 ($0.79-$1.57). And it's not only Bollywood-type Indian feature films that are affected. "You can come to Southall and buy any English title on DVD," Gohil says. "The new James Bond movie, Die Another Day, you can pick up for £5 [$7.85] here." A legitimate top-of-the-line movie on DVD retails at around £15.99 ($25) in the U.K. "In Europe—Holland, Germany—it's a similar situation," Gohil says. "Somebody has to stop it. It's ruining the industry."

Gohil suggests that local U.K. police forces are unwilling to devote the necessary time and resources to arresting street traders dealing in pirate product. "There are so many traders, the police get fed up [if a complaint is made] and say, 'You are calling us everyday,' " says Gohil, who has personally been threatened by a gang at his Southall warehouse. He declines to have his photograph published in Billboard for fear of reprisals.

POLITICAL ISSUES

The BPI has succeeded, Martin claims, in reducing the piracy level for Western international material in the U.K. to 5% but has only recently realized the extent of the problem facing Asian repertoire. "We've been doing anti-piracy since 1972, but it was only in the last four or five years that we became aware there was such a massive problem," he admits. To help combat the pirates, the BPI recruited an Asian investigator in 2001 on a "loan" basis from Birmingham City Trading Standards. Martin says he is "doing a terrific job, but a great deal more work needs to be done." That need is even more pressing, he adds, as the Asian pirates have begun manufacturing Western international product.

"Anywhere there are Asian shops, pirated product is endemic," Martin continues. "It's also affecting India, where their music industry is in disarray, but it's difficult for India to say to Pakistan, 'Please clean up your [act]'—after all, the countries were nearly at war recently."

The solution, then, would seem to lie at government level. "IFPI has taken up the cause, but the U.K. government is not on board yet," Martin says. Pakistan has no effective legislation on copyright or on the regulation of optical-disc manufacturing. "It's a very serious situation," he adds, "and it's also affecting the film industry, games, and business software. The government of Pakistan needs to sign the [World Intellectual Property Organization] treaty—without legislation, it's very difficult to do anything about it. Maybe [Pakistan president] General Musharraf should be contacted by the Americans, who seem to have sway with him, and say there'll be no trade deals—as was done with China. Maybe we need economic sanctions."