Study: One-Third of CDs Are Pirated

According to a music industry group, one out of every three compact discs sold last year was pirated at a cost to the industry of $4.6 billion. There was some good news to be found in the report, as piracy only grew 2 percent year over year, which was the smallest increase in half a decade.

The report released by the International Federation of Phonographic Industries says that in 31 countries the amount of pirated music sold outweighs legal music. Also, in 2004 new countries have become problem areas for piracy, including Chile, Czech Republic, Greece, India and Turkey.

The IFPI decided to announced the results of the study in Spain, where street piracy has led to a drop in legitimate CD sales in the past three years by over 30 percent. Illicit discs now account for 24 percent of all sales in the country.

Spain will now join nine other countries as target areas to combat piracy in the coming year. However, Spain's piracy market is nowhere near that of China, with a 85 percent piracy rate and sales of some $411 million, or Paraguay, with a staggering piracy rate of 99 percent.

"Over the next few years governments and society are going to have to learn to take piracy more seriously - piracy not just of music, but in all its forms," IFPI chairman and CEO John Kennedy said. "It is no longer acceptable for governments to turn a blind eye, or to regard piracy as merely a small irritation to society."

Some companies are even considering pulling out of markets where piracy has become a large problem. Vivendi Universal says that such an action is a possibility, although it would not name any specifics. In any case, piracy is affecting the company's bottom line, and affecting operations.