CD piracy thrives in America too

With all the high pressure media campaign on the problem of CD, VCD, DVD piracy going on, many of us may feel shame and embarrassment that we belong to a race of people who steal for a living. Indeed, we have been made to feel that this kind of piracy is a Third World phenomenon. Just last Monday, an article (in another paper) with a screaming headline in bold 65 point type declared "Piracy: A Third World Crime."

That's what they want us to believe. And it is not difficult to make a people afflicted with inferiority complex to just take that as the truth. Well, it turns out that piracy thrives in America too. The Chicago Sun Times reported, also last Monday, that "when police raided a Mundelein apartment recently, they confiscated about 8,000 illegally made music CDs – a huge pile of proof that America’s CD pirates are going pro."

The raid in America's suburbia seems to show that CD piracy is now going wholesale, with thieves illegally cranking out thousands of counterfeit CDs and selling them for big profits on the black market, at places such as flea markets and gas stations. The Chicago metro area is not the only affected American locality. The Sun Times reported that "last month, New York City police confiscated 17,000 counterfeit discs worth $500,000 from two Harlem apartments."

That's not all. The Sun Times also reported that "last summer, illegal manufacturing operations were shut down in California, Connecticut and Texas. One record store in Texas had machinery capable of producing 75,000 pirate CDs a year, according to the recording industry association."

The problem, it seems, is technological in nature. The recording industry has not been as quick as the manufacturers of recorders and players and computer software makers in adjusting to the new milieu. They are still selling CDs the way they sold pressed vinyl records many decades ago. Technology has created new, more convenient distribution channels through the Internet.

But the recording industry is so busy fighting legal battles for violation of copyright laws that it no longer has the time to think of how to use current technology to sell music. I am not justifying the rip-off syndicates like the ones busted by the Chicago police. But it seems to me that trying to stop this "piracy" is a losing battle unless someone thinks of how to sell music to today's generation using today's technology.

Even the breakdown in the $17 price for a typical CD in the US, as detailed by the Sun Times needs review. Only a pittance goes to the artist and the lion's share goes to the recording companies and retailers/distributors. According to the Sun Times, of the $17 price, $5 goes to the retailer; $4.92 to the record label; $2.40 to the distributor; $1.80 for giveaways; $1.10 for duplicating and recording; only 83 cents for the artist royalty; 60 cents for the songwriter; 27 cents for the producer royalty; and eight cents for the musicians union.

It is obvious that it is possible to drastically reduce the price of a CD by using the Internet for distribution. Given available technology, it is also now possible to have a new kind of retailer who will produce a CD upon order by a consumer, justifying a higher cost. This should also end the irritating practice of record labels of giving us one or two good songs and 12 trash songs and charging us for all 14 in the album.

And yes, we need an affordable Third World kind of pricing. A P500 CD is not exactly affordable, which explains why P50 copies are so irresistible. But nothing justifies piracy. Personally, I'd buy the original if only because of the better technical qualities. But the recording industry is not blame free. They have to adapt to the times and its challenges instead of trying to impose practices of the past because, thanks to technology, the consumer can now strike back.

Stand by your signature

When I was starting out in advertising, there was a rule inculcated to us trainees: Respect your signature. What it means is, once you have signed anything from a bill to a cost estimate to a creative material or a conference report, you have to stand by it… you are ready to defend it and why you signed it. No excuses, like you didn't read it before you signed it, are acceptable.

The other rule we lived by was command responsibility. Anything a subordinate did was our responsibility. We could get fired for a subordinate's action. This rule encouraged us to be control freaks. We simply had to know what was going on 24/7.

This is why I find it amazing that top Enron officials told the US Congressional committees investigating them that they had no idea they were in a hole as deep as it turned out to be. The signatures of the top officials on documents, including the annual report were meaningless.

No wonder there is a proposal from Treasury Secretary Paul O'Neill to require CEOs to sign a financial-health affirmation statement that would make them more liable for Enron-style misrepresentations, whether intentional or not. O'Neill wants to require corporate CEOs and their boards to certify that they have told investors everything they need to know about a company’s financial prospects.

That's a good rule to adopt in this country as well. CEOs should be held accountable not only when they intentionally mislead investors – the legal standard for taking criminal action against them – but also if they fail to stop corporate wrongdoing out of negligence.

I think that is only fair. The CEOs, in fact all corporate officers, should earn their keep by being held accountable for everything that happens under their watch. A section should be introduced in the Corporate Code or a special law passed that specifies the accountabilities of corporate officers. The SEC should have the power to ban errant corporate directors/officers from serving in any other corporation. This is not a new idea. The BSP can ban questionable directors/officers from serving in any other bank ever again.

Dying to get there

Now, here's Dr. Ernie E.

The pastor was talking to a group of young children about being good and going to heaven. At the end of his talk, he asked, "Where do you want to go?!"

"Heaven!" they all piped up.

"And what do you have to be to get there?"

"Dead!"

(Boo Chanco's e-mail is [email protected])