How CD Piracy Works

I was talking yesterday with Bob Youill, Hong Kong policeman turned investigator at Asia Risk, the firm which chases down counterfeiters for clothes and music corporations. The Hong Kong-based company has been working for the recording industry across Asia, tracking down criminal gangs making and smuggling counterfeit CDs.

Most of it happens in China, says Bob, only because there’s the capacity here for making CDs. CDs are churned out in China and shipped to other countries that don't have such CD manufacturing capacity. Most of the CD factories are set up by Taiwanese investors, who shifted plants from Taiwan and Malaysia to cut costs. Youill told me of an Asia Risks bust in November 2007: working with the Royal Malaysian Police working operatives raided three illegal optical disc manufacturing plants.

They recovered six multi-million dollar replication lines, several hundred infringing master copies and thousands of infringing optical discs containing both popular music and Hollywood movies. "At the third plant, the owners were caught attempting to remove a replication line in a heavy goods vehicle. The illegal factories were part of the same organized crime syndicate and the illegal discs were destined for both local Malaysian and overseas markets."

With countries like Malaysia cleaning up its act the action is moving to mainland China. Still, CD piracy is down on previous years, says Youill - "only because the action has moved onto the Internet."

So forget tiny, undergroudn workshops: counterfeiting is big-factory business in China, where piracy is rarely seen by police as a major crime.

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