Music Industry

• CRIA members have been contributors to the Canadian economy for over 100 years.
• Canada is the 6th largest market per capita for sound recordings in the world.
• In addition to direct employees, CRIA member record companies also support a host of other enterprises including retail stores, broadcasters that use sound recordings in programming, music publishers and composers whose music is recorded and marketed by the record companies. More than 45,000 Canadian jobs are directly and indirectly related to the music industry.
• According to Statistics Canada, in 2003 the recording industry and the other entertainment industries that are part of the arts, entertainment and recreation sector represented 6.1% of the Canadian GDP.
• The five major record companies invest over $50 million a year in Canadian artists and music.
• The average investment by the major companies in the production of a sound recording for release into the international market is in the range of $300,000 to $500,000.

The Problem

• Retail sales have declined by $465 million in the last five years, resulting in huge staff layoffs and lost career opportunities for artists.
• The top 10 best-selling recordings in Canada sold 5.9 million units in 1999 compared to 3.4 million units in 2003.
• In 1999, 104 titles by Canadian artists received Platinum or Gold sales certifications. In 2003, just 62 titles did so.

File-Sharing Facts

• Data compiled by the International Federation of the Phonographic Industry (IFPI) shows simultaneous users (logged on at any one time) of pirate services increased from 3 million in June 2002 to 6.2 million as of January 2004.
• Internet file-sharing involves 800 million unauthorized music files at any one time.
• A large majority of unauthorized files (74%) are being made available by a small minority of peer-to-peer users (16%, according to US research consultancy Net PD Sept 2003)

The Perils of P2P

• Because of extreme and anonymous connectivity, P2P users are exposed to a variety of security and privacy hazards, including flaws that provide easy access to hackers, machine crashes and loss of privacy.
• In 2002, the Kazaa program was covertly bundled with spyware from Brilliant Digital Media, which is used to monitor behaviour and browsing habits for target-marketing purposes.
• Spyware can be embedded with a "Trojan Horse", an executable code that may leak information, corrupt files or allow system commandeering by a hacker. In January 2002, a P2P spyware program that was bundled with four separate file-sharing networks was classified as a "Trojan Horse".
• Almost half of the 4,778 executable files downloaded in a one month period through the popular Kazaa file-sharing network were infected with malicious code like viruses and Trojan Horses.
• At least 9 reported viruses that spread via file-sharing networks have been identified (there are undoubtedly more). Users become contaminated when downloading infected shared files.
• Young users of peer-to-peer networks are at significant risk of inadvertent exposure to pornography. In a search using innocuous keywords likely to be used by children (i.e. "Britney Spears", "the Olsen twins" and "Pokemon"), more than half of the images downloaded were classified as adult or cartoon pornography.
• Nearly 6 million video, image and other files identified as "xxx", "porn" or "sex" were available to be downloaded on one of the popular P2P networks in a 2 day period.
• Current parental control programs designed to block children's access to pornography on the Web are generally ineffective when applied to file-sharing networks, as most such programs filter out files based on what would normally be considered completely benign keywords; as noted above.

Sources:

1. "Most Popular Titles in Windows", Download.com
2. "P2P Fear and Loathing: Operational Hazards of File Trading Networks", Center for Information Security, The University of Tulsa [September 2002]
3. "Children's Exposure to Pornography on Peer-to-Peer Networks", United States House of Representatives, Committee on Government Reform [March 2003]
4. "FILE-SHARING PROGRAMS - Peer-to-Peer Networks Provide Ready Access to Child Pornography", United States General Accounting Office [February 2003]
5. "Kazaa Delivers More Than Tunes", Wired News [January 2004]
6. "WildTrends 2003: A look at virus trends in 2003 and a few predictions in 2004" TruSecure on [December 2003]

What We Are Doing

• The first legitimate Canadian online music site, www.puretracks.com, was launched in late 2003. Following closely on its heels in early 2004 was www.archambaultzik.ca and then www.napster.ca. The legitimate services offer an extensive repertoire of affordable, high quality, virus-free downloads, while assuring that all rights holders are fairly compensated.
• CRIA members invested more than $1.5 million in the "Value of Music" campaign, designed to educate and change the attitudes of young people. (www.keepmusiccoming.com)
• CRIA's "Listen Up 2" educational video and teachers guide, the update to the popular "Listen Up!", produced and distributed by CRIA in the mid-nineties, was sent to over 10,000 public middle and high schools across the nation in September 2003.