In Mexico, music piracy rising with broadband

PART 3 OF 5 IN A SERIES

updated 3:13 p.m. ET July 7, 2006

MEXICO CITY - On Genova Street in downtown Mexico City, illegally copied CDs of music by top U.S. artists sell for 20 pesos, just under $2 a piece, in tiny booths between tables overflowing with batteries, stuffed animals and cheap knockoff sunglasses. That's about one-tenth the price in nearby stores.

Music is even cheaper a few hundred yards away, inside the Internet cafes surrounding the pedestrian plaza of the Glorieta Insurgentes. At eMilios, about 20 customers a day fill virgin discs with illegally downloaded songs for about $1.60, according to the clerk, Luis Arturo Guerrero, and whether or not they pay legitimate Internet sites for the tunes is not his concern.

“We can't really be responsible for what people see or download,” says Guerrero, who sells blank CD-Rs for 8 pesos, or about 70 cents, and charges 9 pesos, about 80 cents, for an hour of computer time. Most use the free file-sharing programs Limewire or Morpheus, he said.

Unauthorized downloads are a global challenge for the music industry, but the problem is becoming particularly serious in Mexico, where intellectual property laws don't punish file-sharing and an increasing number of people are getting the broadband Internet connections that make it easier to download content at high speeds.

Mexico today is a pirate's haven: In a nation where the government has made opening legitimate businesses bureaucratic and costly, consumers have learned to count on “ambulantes,” street vendors like the crowd on Genova Street, for everything from contraband cigarettes to DVDs of just-released Hollywood movies to high-end electronics.

Illegal sales already account for 65 percent of CD sales in Mexico, and the entertainment industry is bracing for things to get much worse now that fast broadband connections have become more common, doubling to 61 percent of Web-enabled Mexicans in the last two years.

The High Cost of Piracy Part 1: U.S. firms fight the flood of fakes Part 2: Russia's illicit industry booming Part 3: Mexico's piracy rises with broadband Part 4: China's piracy hurts its own industries Part 5: China companies begin to fight back

“Broadband makes it easier for people to trade musical files and to download recorded music, both legally and illegally,” said Arturo Diaz, legal director of the Mexican Association of Music and Video Producers, which represents major labels like EMI and Universal Music in Mexico. “We're keeping track of it in order to define our strategies.”

Mexico's intellectual property laws already provide for up to ten year prison terms for people caught selling pirated music in the street, but they are only occasionally enforced, and the penal code does not address file-sharing because no money is exchanged, Diaz said.

“It's a problem with the law that we are already working to solve,” he said. When the next congressional term begins in September, Mexican legislators will consider his group's proposal to punish unauthorized file-sharers with fines of up to $20,000 and ten years in jail.

Internet use in Mexico increased about 20 percent per year from 2001 to 2006, and nearly one-fifth of the population of 107 million will have Web access by year's end, according to the Mexican Internet Association, which represents Web-related businesses. “People want faster connections to download music, videos and software,” said the group's subdirector, Ernesto Valdez.

MORE FROM WORLD BUSINESS

World business Section Front

The stunning collapse of Iceland G7 endorses plan to stem financial crisis World markets follow huge U.S. losses Venezuela shuts down nearly all McDonald’s Iceland’s financial debacle escalates European markets lose ground again Forecasters see U.S. leading global downturn U.K. to partially nationalize banks Iceland teeters on the brink of bankruptcy U.K. threatens to sue Iceland World business Section Front   Add World business headlines to your news reader: