Recording Industry welcomes adoption of CD Plant Regulation by Polish Parliament

Brussels, 9 March 2004

The recording industry welcomes the adoption by the Polish Parliament (Sejm) of a long-awaited regulation of Poland's rapidly growing optical disc manufacturing sector. The regulation, approved on 5 March 2004, foresees the obligatory use by every optical disc plant manufacturing CDs, DVDs or CD-Roms of a unique identification code. It also provides for random inspections of the plants to verify the information manufacturers will have to regularly provide to the authorities.

Poland, which will join the European Union on 1 May, has seven known operational plants capable of producing over 385 million optical discs per year. Poland is surrounded by countries with a large optical disc production over-capacity, such as Russia, Czech Republic and the Ukraine, and the legitimate market in Poland cannot absorb the huge numbers of discs its plants currently produce. The Polish music market is one of the biggest in Central and Eastern Europe, but piracy levels are unacceptably high at 45%. CD and DVD piracy have largely replaced cassette piracy. With the dramatic increase in production capacity, there is a growing risk that certain plants will be tempted to produce optical discs without the necessary authorisation from artists, songwriters and producers.

Jay Berman, IFPI Chairman and CEO, said: "Massive optical disc piracy, fuelled by huge global over-capacity is one of the key threats to the music industry worldwide. Poland has taken the lead among the countries that will join the EU in May by adopting this regulation. While legitimate manufacturers will have nothing to fear from this regulation, it will provide a much-needed safeguard for the creative industries in Poland and encourage foreign investment. "

The Copyright Amendment Bill, which includes the optical disc regulation, will shortly be reviewed by the Polish Senate before it is presented to the President of Poland for his signature. Stefan Krawczyk, IFPI Regional Director for Eastern Europe, said: "The Polish government and the Sejm have clearly showed that they are willing to promote their copyright industries. Following Bulgaria and the Ukraine, where pirate CD plants in the Nineties all but destroyed the music sector, Poland has moved to introduce the necessary regulations to prevent the same from happening to its own local industry. We shall work with other countries in the region towards the rapid introduction of similar regulations."

Background for Journalists

Domestic production in Poland: The estimated total capacity of the seven operating optical disc plants in Poland is 385.6 million discs per year (as of January 2004) - a 20% increase compared to estimated annual capacity of 316 million discs which the copyright industries reported early 2003. Total legitimate demand in Poland for all copyrighted content on optical discs was recently estimated at around 120 million discs per year.

Imports of infringing optical media: A large volume of pirated optical media products (CDs, DVDs, and CD-ROMs), including illegal sound recordings, audiovisual products, videogames and business software applications, continues to enter Poland. Large amounts of pirate music CD imports (amounting to about 85% of the pirated music) still enter Poland mainly from Ukraine, Lithuania, Belarus and Russia. The Polish police and customs still regularly seize pirate CD shipments, particularly from Ukraine, Russia and Belarus, on trains, buses and private cars (suitcase smuggling), which strongly indicates that thousands of pirated optical discs are finding their way onto the Polish markets daily.

Need for optical disc regulation in Poland: Given the high volume of domestic OD capacity and the weak border situation which permits pirate imports, there is an urgent need for optical disc legislation in Poland. The copyright industries, both in Poland and abroad, have long advocated that Poland adopt a strong optical disc regulation. This regulation is part of a bill of amendments to the Copyright and Neighbouring Rights Law due to be adopted on the eve of Poland's accession to the EU.

(Source: International Intellectual Property Alliance Special 301 submission 2004 - see www.iipa.com)

For further information contact:

Stefan Krawczyk, IFPI regional Director for Eastern Europe, tel: +32 (0)2 509.00.50