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Taiwan's piracy
blues
By Matthew Smith
TAIPEI
- A-mei is an angry woman. If that doesn't matter much
to you, then chances are fairly good that you are not a
big fan of Mandarin pop music. Taiwan's Chang Hui-mei,
who despite slipping somewhat in terms of her home-town
popularity can still be considered the queen of popular
music in Greater China, has a message for her many fans:
"If you really value our efforts, please think twice
before you buy a pirated copy of our music."
Modern Mando-pop does not normally include many
sad melodies. But this year, industry executives and
stars alike have taken to playing metaphorical violins
for themselves in a somewhat wishful campaign to
convince fans that buying pirated music is bad, and in a
slightly more realistic effort to get the Taiwan
government to put a stop to the mass production of
illegal music and video disks here. While it would be
difficult to find many genuinely tearful reactions to
their plight among consumers, the issue is about far
more than the financial problems of a handful of
millionaire musicians and their even filthier-rich
handlers. In fact, the financial woes of A-mei and
friends serve to highlight the nation's laughably poor
legal protection for intellectual property rights (IPR),
a problem that is hindering Taiwan's overall economic
development.
Faced with the inexorable erosion
of its low- and middle-end manufacturing base to
mainland China and other markets, the Taiwan government
has pledged to foster new industries such as
biotechnology and nanotechnology to fill the void and
drive future economic growth. The theory is fairly
solid: Taiwan can no longer compete in labor-intensive
industries, and therefore must move into such
cutting-edge, niche industries in order to exploit its
geographic position, cultural affinities with China, and
highly educated and hard-working population.
All
of which, at first glance, might seem to have little in
common with lip-synching pop divas or blow-dried boy
bands. But like the music industry, so-called "new
economy" high-tech industries such as biotech are based
upon creativity. Developing these knowledge-based
sectors will require investors to pump vast sums of
money into research and development, something they are
not likely to do if the value they create can be simply
and easily stolen by others with virtual impunity. And
as the wailing of the local music industry makes loud
and clear, Taiwan's legal system simply does not yet
provide the protection for IPR that will be needed to
support the industries Taiwan wants to claim for its
future.
Douglas Paal, director of the American
Institute in Taiwan (the de facto US ambassador in the
absence of official ties between Washington and Taipei),
makes the point in very clear terms. "The bottom line
here is this: there is no knowledge-based economy that
enjoys bright prospects yet fails to offer adequate
protection of the work done by those who do the
thinking," he says. "There is no gentle way to say what
I have to say about IPR. Continued failure to broadly
enforce intellectual property rights will pull the
economy down with it. Period."
Indeed, IPR
protection has long been a sour note in trade talks
between the United States and Taiwan and is one of the
key issues holding up negotiations on the free-trade
agreement that Taipei desperately wants to sign with
Washington. Foreigners have long sung the blues over
Asia's rampant piracy of computer software, books, and
media products - not to mention knock-off consumer
products - and Taiwanese have been among the pirate
kings of the world. But now, the Taiwan government can
no longer view rampant local IP theft as a problem for
foreigners alone. The danger for domestic industries is
increasingly clear: there are signs that the government
might finally be moving to crack down on the copycats.
Fittingly, no local industry has been more vocal
or received more media coverage on the IPR issue than
the local music business, which produces 80 percent of
Mandarin-language music sales worldwide. If the numbers
that music-industry officials provide are correct, it's
easy to understand their obvious sense of urgency.
According to the International Federation of the
Phonographics Industry (IFPI), a music-industry lobbying
organization based in London, 50 percent of all music
sold in Taiwan over the past two years has come in the
form of pirated media.
In the meantime, says
IFPI, the market for legitimate music fell from US$306
million in 1999 to just $170 million last year, and
dropped by another 13.4 percent during the first half of
2002 - with domestic artists, not foreigners, hit
hardest. Taiwan, which boasted the second-largest music
market in Asia in 1999, is now in fourth place behind
Japan, South Korea, and India. "Taiwan has been the
major provider of Chinese repertoire in Asia, but now
its music industry is dying in front of our eyes," says
Lachie Rutherford, president of Warner Music Asia.
Legal loopholes and lack of regulatory
enforcement have allowed music copying to become a major
export industry for Taiwan. Piracy reaches beyond the
nation's shores, beyond even the Mandarin-speaking
world, to places where the stylings of pop stars such as
A-mei, F-4, and eVonne would draw bemused
head-scratching rather than frantic hip-swinging.
"Exports of tens of millions of pirate CDs and blank
CD-R disks destined for pirate use, manufactured by
Taiwanese disk plants, have been regularly seized,
particularly in Latin America," according to an IFPI
statement. Ironically, it would seem as though criminal
copycats are following legitimate manufacturers in
setting up mass-production operations offshore in order
to increase their competitiveness.
Having grown
incredibly wealthy as a corollary to the nation's
massive optical media manufacturing industry, which
produces 2.6 billion CDs, VCDs, and DVDs every year,
pirates here are more reminiscent of Al Capone than of
Robin Hood. "Sophisticated syndicates manage the illegal
business, both domestically and for export," says IFPI.
Indeed, the areas surrounding Taipei are studded with
factories stamping out illegal music and often staffed
by armed guards - hardly an incentive for the police to
take action.
And there - in enforcement - lies
much of the rub. Despite the government's efforts to
tighten its IPR protection, including last year's
passage of the Optical Media Law (a condition of
Taiwan's World Trade Organization accession agreement
with the United States), many observers note that
street-level enforcement of the law remains half-hearted
at best. While corruption is certainly one reason, and
fear another, many observers note that police officers
and investigators simply do not understand the concept
of IPR protection. To bring them up to speed, the
Ministry of Economic Affairs' Intellectual Property
Office held five three-day courses to some 250
front-line police officials on Taiwan's copyright and
patent laws, in addition to other IPR-related topics.
But if there is any change, it will not happen
quickly enough for the music industry. After a somewhat
less-than-spontaneous anti-piracy rally in April, which
saw the stars of the Chinese music world march on the
presidential palace in Taipei, Premier Yu Shyi-kun
acknowledged the government's failure in reversing the
trend, and the cabinet set up an ad hoc task force of
100 officials to tackle copyright-protection issues. Yet
six months later, industry officials complain that the
problem has only worsened. "The new IP task force has to
be on a permanent basis, and its enforcement powers need
strengthening," says IFPI chairman Jay Berman. "The new
optical-disk legislation needs to be extended and
properly enforced, and prosecutors and judges need to
attack piracy as the serious organized crime that it is
- and that means sending pirates to jail."
Strong words, and one can almost hear the cheers
of music-industry executives and popular musicians
alike. But even if the industry and its charismatic
spokespeople can actually get the government to crack
down on pirates, persuading the public to return to the
days of $12-$20 music CDs at legitimate outlets will be
a far more difficult performance to carry off.
(©2002 Asia Times Online Co, Ltd. All rights
reserved. Please contact content@atimes.com
for information on our sales and syndication policies.)
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