The Recording Industry at a Glance
by Danny Yson
(Parts are excerpts from the book, The Recording of Pilipino Music, published during the 1990's)

BRIEF BACKGROUND

Records as record playback came to the Philippines as early as when they became a novelty feature among affluent Spaniards during the end of the 1880, less than 20 years after it was invented by Thomas Edison in 1877. Its existence was even mentioned by Jose Rizal in his novel Noli Me Tangere in the chapter where he likened the education of the Filipino children to that of the repititious way the records were played. The novel was printed in Germany in 1885. The store that was selling it was a Spanish- owned novelty store, La Estrella del Norte, located at the Escolta which sold luxury goods from Europe. In fact, in the middle of the 1880s. La Estrella del Norte put up a branch in Lipa, Batangas when the place became so rich because it was the only source of coffee beans worldwide, the coffee plants in other places in the world having been destroyed by a pest. By the end of the 1880s, the Lipenos owned the most luxurious articles that can be found in the Philippines including phonograph, pianos and musical instrument. The cost of a record then was two pesos which surprisingly was the price it maintained until its eventual demise. Two pesos was a day’s average salary of an office worker then.

The Philippine recording industry celebrates its 90th anniversary this year. It was in 1913 when Major William Anderson started to record Filipino talents at a makeshift studio at the second floor at the Manila Hotel, constructed a year earlier by the American administrators of this country. Anderson was a veteran of the Filipino –American War and the hostilities between the two protagonists had formally ended in 1907 with the election of Filipino delegates to the First Philippine Assembly. Anderson was the sole representative in the Philippines of Victor Talking Machine Company, one of the two recording companies in the United States with representation in the Philippines. The other one was Columbia Records represented by Isaac Beck, one of the early American pioneer businessmen in the Phillippines, the only colony of the United States. Anderson had a store located at Isaac Peral Street (now United Nations Avenue) located just a stone throw away from the hotel where he rented a room, along with the other American government officials, a fashion then among them. Manila Hotel’s construction was finished in 1912 and almost immediately it attracted the American colonials who made both their residence also their official address.

Anderson’s store sold both the horn-shaped Victrola record player and Victror Records. When he decided to record Pilipino songs, the songs from the sarzuela were the choice of the elite then. Sarzuela was a stage presentation similar to opera but localized in form. The most famous stage actor and actress then were Victorino Carrion and Maria Carpena and therefore their solos and duets were the initial repertoire for recording. Recording of local songs was aimed at generating more sales for Victrolas and the ploy was effective.

Carpena was so popoular then that there was an incessant demand for her performances both on stage and on special occasions in the City of Manila and even in the provinces. She may be considered the first superstar of Philippine entertainment. An orphan who grew up in a convent under the nuns, she was so amiable as to please everybody that she would accept any invitation to please her endearing fans. It is unfortunate, however, that because of her busy schedules ,Maria Carpena got sick and died at the height of her career on March 8, 1915. Because of her popularity, the whole nation went in gloom. Well-known personalities both in government and private institutions came to her wake. In fact, the city council of Manila named a street after her. The street is still there at Quiapo district near Raon (now Puyat street)

In the 1920s, kundiman and jazz were the favorite materials for recording because of the popularity of bodavil whose main repertoire were jazz, kundiman and novelty songs. Kathy dela Cruz became the” queen of jazz” with her interpretation of the flirty “Balut”, the Queen of Kunan with her “Nabasag Ang Banga”and Vicente Ocampo, “king of Novelty” with his rendition of Sitsiritsit Alibangbang.

To support the promotion of records, Victrola and other novelty goods, Anderson put up radio station KZEG in 1923. EG of KZEG stood for Erlanger and Galinger, a big company in the United states which supplied him with novelty goods. He made use of the facilities of his recording studio also as his broadcasting studio.

In 1926, Anderson’s main competitor, Isaac Beck, distributor of Columbia Records and its playback Gramophone, followed suit by putting up KZIB. Beck had a department store at the Escolta Street, then the prime business district in the country like MaKati is today. His store was called Ibeck Escolta. In KZIB, IB stood for Isaac Beck. Beck’s action was spurred by the availability of the two songs “Ang Dalagang Pilipina” and “Paalam Sa Pagkadalaga recorded by diva Tinay Arellano in the United States. The two songs were recorded in Los Angeles, California by Columbia Records .

In the middle 30s Lilian Velez became the most popular singer, best-known for her interpretation of “Sa Kabukiran” which won her first place at a radio KZRM’s amateur singing contest.

In the late 30s to the 40s the songs from the movies became the more popular repertoire for recording.

Until the emergence of long play albums (LPs) in 1949, records were sold in 78 rpm, 8-inch single. Most LP s contain ten to 12 songs on both sides. Upon the emergence of LPs also came the 45 rpm, 6-inch singles. The volume of sales of the industry was estimated at P1 million per year during the late 50s to the early 60s. Hit singles can sell as much as 50,000 copies then.

In the late 40s to the early 50s danceable tunes like rhumba, chacha performed by orchestras and combos were in vogue. In the mid 50s to the early 60s, MARECO, MICO and RPS were the major recording companies. They revived the people’s love for kundiman and harana songs. That lasted until the mid 60s when the young producers led by Buddy de Vera of Alpha Records; Vic del Rosario and Orly Ilacad of Vicor Records; James Dy of Dyna Records; Nonoy Balboa of Grandeur Records; Luis and Mike Lee of D Swan Records and Tito Ty of ANS Records . Introduced cover versions and adaptations that ultimately graduated into original Pilipino recordings called OPM.

Up to the late sixties, a single can be produced at an average cost of P 600 as follows:

Composition - P 50.00
Singer - 50.00
Musicians - 300.00
Arranger - 50.00
Studio cost - 100.00
Duplication of a record is P300 per thousand

Thus a hit single that could sell 50,000 copies can generate a profit of P50,000 when one can construct a mopdest house at the cost of P5,000. A brand new car then cost less than P5,000.00

The recording industry is the prime mover of the nation's entertainment and, to no little extent, also the communications business. It is from the portals of recording companies that music for the radio and television--its main users--night clubs, the theaters, restaurants and other entertainment venues, are derived from. It is what these recording companies mint into records, tapes, and now compact discs (CD) and digital audio tape (DAT), and digital video dics or digital versatile disc (DVD) that dictate the trend in music, particularly pop music.

THE INDUSTRY MAKEUP

The Philippine recording industry, as in other countries, consists of producers of local records many of whom are also licensees of foreign labels and of the singers, composers, musicians, arrangers, managers, PR men, technicians, studios and duplicators.

The present PARI member recording companies are classified as Corporate, namely: Able Music International, Inc.; Alpha Music Corporation; BMG Records (Pilipinas); D’Concorde Recording Corporation; Dyna Music Products, Inc.; Galaxy Records; Ivory Records Corporation; MCA Universal, Inc.; EMI Philippines, Inc.; Praise, Inc.; Sony Music Entertainment (Phils.), Inc.; Star Recording, Inc.; Universal Records; Vicor Music Corporation; Viva Records Corporation; Warner Music Philippines, Inc.; and as Associates, namely: Amtrust Leisure Corporation; The Bookmark, Inc.; Capricorn Records Enterprise; Cobra Productions, Promotions and Management Services; Empire International; Famous Entertainment Corporation; Golden Music Arts; Jesuit Communications Foundation, Inc.; Konzert Musictek Corporation; Musikatha Ministries Foundation, Inc.; Octave Music Recording; Polyeast Records Corporation; Precision Audio Video Services, Inc; Prime Music Corporation; Reo Records; Sound Publishing; Synergy Music Corporation, Techto Sound Trade International; Viejo Marketing and XAX Music Entertainment, Inc.

ANNUAL SALES

The total industry sales for 1990 are estimated at over P400 million. There was an increase of about 15% from 1989, despite the poor economic condition. This was due to increase in sales of Pilipino recordings vis-a-vis foreign recordings. Cassettes now account for 70% of the market, while compact discs has 20% and long playing albums and singles a mere 10%.

The cost of regular cassette tape to the customer is P75; and P90, the high-grade type. Most of the latter are made by BASF. The LP sells at P90.00, the singles at P9.00 each; and CDs at P375.00 each. The industry-recommended pricing of records, which took effect in December 1990, is still considered one of the lowest in the world. In the U.S.A., a cassette tape costs between $10 to $12; or (P300); in Japan Y2,000 to Y2,500 equivalent to P240 to P300; and in Germany, DM40.

In the year 2000, the reported sales of the recording industry are as follows:
2000 - P1,668,953,940.00;
*2001 - P854,347,600.00;
**2002 - P881,413,000.00 and
***2003 – P610,865,800.00.

Figures available: * Jan. to June 2001
** 65% of the market 2002
***Jan. to June 2003

THE MAKING OF A RECORD

A record producer may want to do a recording because he has an appropriate composition for an artist or vice versa. An artist with a large following may want to record a particular song of his own or a popular composer may want his song recorded with an artist in mind. One gets into producing records because he discovers someone whom he feels has the making of a very good singer.

But the prime reason for making a record is its marketability. The kind of money that goes into each record demands that it be accepted by the public, the customer. Ten years ago, for a single song, the production expenses (artist, composer, musician, management fees and studio rentals) may range from P 20,000 to P 35,000. An LP/CD production cost P300,000 to P400,000.

PRE-RECORDING ACTIVITIES

Before the advent of the digital technology, pre-recording activities require that contracts and legalities among parties be formally drawn. Then there are editing of scores and musical arrangements, copying of orchestra parts, routining, practice, scheduling of recording sessions, rehearsals and engineering problems to be solved.

There are several recording studios depending on one's requirements to choose from, namely: Amerasian Studio, Asiatec Pink Noise Studio; Backyard Studio; Cloud 9 Studio; D’ Master’s Touch Studio; Fliptech Recording Studio; Greenhill Sound Productions; Jam Creations Studio; Midi Tracks Studio; Mixsonic Recording Studio; Prodigi Studio; Sound Creation Studio; Tracks Recording Studio and VAS Recording Studio.

TECHNICAL ASPECTS

Before the advent of digitals, only live musicians were available as background music of any song. In the late 80s, however were invented small gadgets that can imitate any and all the sounds of musical instruments. These gadgets presaged the exit of live musicians except in special recordings. These gadgets also cut the cost of the record production to the minimum. Most oftentimes only the recording artists perform live in a production; singing live with background music or minus one fully furnished by a musical arranger, the only other live person who pour his talent to the master. The master is a complete recording from which are all the other copies are duplicated from.

An orchestral work or those of a singing group requiring many musicians needs a big studio. Works of a different scale and style require a particular studio, acoustics and equipment. To ensure a maximum choice of balance sound resources there is both a physical and technical separation between instruments. The vocalist and the drummer are placed farther apart from each other. Everyone can hear the others through headphones.

The producer and the engineer use sophisticated equipment to assist them in the translation of live sounds into the medium recording. This is the first technical stage of creating a unique performance existing only on records. The producer and engineer must be able to listen without distractions. Visual contact with the studio is kept to the minimum.

The engineer, with the producer, decides which section of the total sound shall be recorded on which track on a multi-track recorder. It is vital that good sound source separation is achieved in the studio so that each track contains the output of only one instrument or section of instruments. If this is not done it will be difficult, if not impossible, to create the final sound balance desired. The track machine is where the original is made. Thus the production of a recording using the original instrument is completed. The cost of this production is about 60% higher than that using a synthesizer.

MIXING

The producer together with the engineer mix the various recorded tracks of sound to create an aural picture of the original total performance. Imagine a painter blending and combining colors to achieve a desired effect in his painting. Although there is a vast range of sophisticated equipment, at the end what counts is an exceptional pair of musically educated ear. The end product of this combination of sounds goes into a master tape.

THE MASTER

By this time you have used from P20,000 to P35,000 for a single song or P300,000 to P400,000 for an LP/CD. The sound from the master tape is then transferred to a master disc from which commercial pressing will be made. The disc used for cutting is of thin aluminum coated with plastic lacquer into which the groove is cut by a helium-cooled stylus driven by a spinal from a special tape machine. The disc-cutting lathe is a high precision machine tool, fully automated but demanding great skill from the disc-cutting engineer.

This matter is cut on the lathe fed by a tape machine modified for the purpose. The special tape machine controls the movements of the lathe so that grooves containing loud passage in the music are cut apart than those on soft passages.

DUPLICATION

In long playing albums (LP), the stampers are fitted to the pattern of hydraulic power which automatically feed in both side labels and press the plastic into the shape of the record at pressure of 1,000 kgms. per square meter at a temperature of 100 degrees Centigrade. The record pressing is formed mechanically, then removed from the press, trimmed, slipped into the inner sleeve and into the other sleeve, all in 25 seconds for an LP and without the use of human hand.

The parallel operation is the high-speed duplication of music cassettes and cartridges. A master tape in the loop form replays continuously feeding the program to banks of sleeves recorders each loaded with "pancakes" (boils) of tapes 750 meters long. Both A and B titles are recorded in onepress. Completely recorded pancakes are loaded into a machine which cuts the tapes, loads it into cassettes and applies label. The process takes 4 1/2 minutes.

The compact disc or CD and later the digital video disc or digital versatile disc (DVD) are the latest recording configuration that became more acceptable to the record-buying public because when played, its sound almost duplicate that of the master. Audiophiles have shifted to it from the popular audiotapes of the 1980 decade. Report has it that almost 90 per cent of the records sold are either in this configuration. The CD has done what audio tape did to LP in the 80s and what LP and 45rpm did to 78rpm in the 50s.

*COMPACT DISC

The molded plastic compact disc incorporates a continuous spiral of pits, which contain the data. An aluminum reflective layer allows a laser in the compact disc drive to read the encoded information. Data integrity is protected by a lacquer coating on one side and a plastic substrate on the other side. Compact disc information or music are encoded with efficient error detection and correction codes so that drives can correct errors if they occur.

A compact disc can contain over 650 megabytes of user data for over 74 minutes of audio on a disc with a diameter of only 4.75 inches. This capacity is equivalent to 200,000 pages of printed text. Consider that if a human hair were laid on a compact disc, its width would cover 50 rows of pits.

*CD REPLICATION

CD Replication is the process of making a glass master from a premastered image, creating stampers from the master, then pressing discs with the stamper using injection molding. Once the stamper is made and the machine is set up, a disc can be produced in a matter of seconds.

*THE MANUFACTURING PROCESS consists of the following distinct stages:

PRE-MASTERING

The Pre-mastering stage involves enhancement of incoming masters before the stamper-making stage.

MASTERING PROCESS

The first thing needed to make CDs is a stamper. The stamper is a thin, circular metal disc, slightly larger in diameter than a finished CD, that is placed in the moulding machine to create the pits on the final disc. The mastering process involves the transformation of information through Recording, Metalizing and Galvanizing of an optically flat glass disc which is coated with a very precise layer of light sensitive material to a solid nickel copy and this is called “stamper”.

REPLICATION PROCESS

Once the stamper has been made, the actual process of moulding the disc begin. At the center of the injection moulding machine is a two part mould. One half holds the stamper and the other half contains a flawless, mirror like surface. In order to produce a disc, one half of the mould closes against the other and molten polycarbonate is injected into the cavity between the stamper and the mirror surface. The disc is then cooled to solidify the plastic, the mould then opens and the disc is removed. The next stage is to coat the back of the disc with a layer of aluminum called metalizing. To prevent oxidization of the aluminum, the disc is then lacquered (Spin-coated).

Following are the replication plants in the Philippines: Electromat Manufacturing & Recording, F.A.S. Development Corporation, Pandisk Technology Philippines, Inc. and Optic Technologies, Inc.

PRINTING
The next stage is to decorate the discs by printing label directly on to the lacquer. Depending on the customer’s requirement and the film and artwork supplied, CDs are printed through the use of either Offset or Silkscreen printing.

PACKAGING

The final stage of the production process is packaging. CDs are pack depending on the customers’ requirements options like jewel cases, slim jewel cases & sleeves and also how the CDs are pack along with any printed material in these packaging material. The jewel cases can then be shrink-wrapped to give the final finish to the product.

MARKETING

Thus the artifact is ready for delivery to retail and consignment outlets. Distribution must be swift and timed to sales promotion. Records should be well kept and stocked.

The first several hundred copies of the records are then distributed to most radio stations, TV stations and some entertainment writers. For publicity plugging there are over 400 radio stations in the country. The promotion costs usually amounts to over triple the production cost to insure full plugging.

Now the listener is ready to look for your record. This is the time to start selling.

PRODUCERS AND LICENSEES

The major international recording companies are: BMG Records (Pilipinas); MCA Universal, Inc.; EMI Philippines, Inc.; Sony Music Entertainment (Phils.), Inc. and Warner Music Philippines, Inc.

The independent recording companies are: Alpha Music Corporation, Dyna Music Products, Ivory Records, Star Recording, Inc., Universal Records, Vicor Music Corporation Viva Records.

THE COMPOSERS

The Filipino composers are a prolific lot. They can come up with any composition at an instant. In the seven editions of the Metro Manila Pop Music Festival, the KBP Music Festival, The PARI Search for competitors to the Asian Song Festival, and the Asian Children Song Festival, and the Asean Popular Song Festival, average entries range at around 3,000.

There had been many winners in these song competitions held in other countries. In 1990, the Asian Children Song Festival held at Osaka, Japan Boy Christopher's composition “Let Our Voices Ring” was the grand prize winner. In the same competition held at Nagasaki, Japan in 1989 it was Andrei Dionisio's composition “Yesterday's Dream” that also won the grand prix. At the 1978 Seoul Songfest it was Ryan Cayabyab's “Kay Ganda Ng Ating Musika”. In 1979 Asian Amateur Singing contest, it was George Canseco's “Ako Ang Nasawi, Ako Ang Nagwagi”.

Other songfest winners was Gines Tan's “Magsimula Ka” grand prize at the First Asean Songfest (1981), and Tillie Moreno-Lee and Jun Latonio's Nothing I Want More at the Seoul Songfest (1982).

Most recent winners are: Trina Belamide’s “No Less”second prize at the Asia Song Festival and “Happy Valentine’s Day” second prize at the U.S.A. Songwriting Competition; Vehnee Saturno’s “Only World” silver prize at the Shanghai Music Festival and Jungee Marcelo’s “Don’t You Turn Back” copper prize also at the Shanghai Music Festival (1999); Soc Villanueva’s “Follow Your Dream” silver prize at the Asia Shanghai Music Festival; Vehnee Saturno’s “Sing But One Song” bronze prize also at the Asia Shanghai Music Festival; and Jungee Marcelo’s “Make It Through” Philippine Representative at the Asia Song Festival (2000); and Vehnee Saturno’s “Till My Heartaches End” silver prize at the Voice of Asia International Music Festival 2002.

Among the contemporary composers aside from these winners are hitmakers Freddie Aguilar, Jose Mari Chan, Heber Bartolome, Willy Cruz, Nonoy Gallardo, Odette Quesada, Bodgie Dasig, Jamie Rivera, Mon del Rosario, Rey Valera, Louie Ocampo, Alvina Sy, Eddie Munji, Danny Javier, Jim Paredes and Boboy Garrovillo.

The others are Vehnee Saturno, Nonoy Tan, Snaffu Rigor, Sonny Angeles, Alex Catedrilla, Tats Faustino, Paul Galang, Jerry Paraiso, Marlene del Rosario, Arnel de Pano, Kedy Sanchez, Marilyn Villapando, Bug Villapando, Nonong Pedero, Vic Santiago and Jun Sta.Maria, Martin Nievera, Gary Valenciano, Ogie Alcasid, Moy Ortiz/Edith Gallardo, Ely Buendia, Rico Blanco, Medwin Marfil, Mon Espia, Jungee Marcelo, Liza Diy/Chat Zamora, Marizen Yaneza-Soriano, Darwin Hernandez, Herbert Hernandez, Norman Caraan, Lito Camo, Eric Claridades, Edwin Marollano, Larry Hermoso, Gino Torres, Rica Arambulo, Barbie Almalbis, Chito Miranda, Norman de Ocampo, Larry Chua, Manuel Mallillin, Jr., Toto Sorioso, Pido Lalimarmo, Naldy Gonzalez, Andrew E, Naldy Padilla, Ricky Sanchez, Arnold Reyes, Leo Quinito, Ronnie & Gigi Cordero, Fr. Carlo Magno Marcelo, Socrates Villanueva, Angelo Villegas/Allan Felicano, Arnie Mendaros, Gabriel Ignatius Cheekee, Totoy Suzara, Raymond Ryan and many more.

PR AND PROMOTIONS

The success of a new recording depends on the Public Relations and Promotion man. Most PR writers are also the PR men. The Promotions man usually schedules live appearances on TV and radio interviewers. Each recording company may have one or two PR and Promotions men.

THE ARRANGERS

Newly composed songs are made ready for recording after its vocal and instrumentalization are arranged. This is the job of a music arranger. Some of the current music arrangers are Emi Munji, Dante Trinidad, Danny Tan, Butch Miraflor, Homer Flores, Alvin Nunez, Angel Pena, Ryan Cayabyab, Louie Ocampo, Rey Magtoto, Tats Faustino, Mar del Rosario, Gerard Salonga, Wency Cornejo, Ferdie Marquez, Edwin Marollano, Tito Cayamanda, Jungee Marcelo, Mel Villena,Albert Tamayo, Arnold Buena, Gino Cruz, Marvin Querido, Gino torres, Dennis Quila, Rommel Villarico, Mon David, Rica Arambulo, Erwin dela Cruz, Onie Badiang, Yong Nalasa, Alvin Nunez, Nino Regalado, Mon Faustino, Jay Durias, Noel Espenida, Jimmy Antiporda, Arnel de Pano, Ric Mercado, Marvin Querido, Marc Lopez, Mon Espia, Naldy Gonzales Many arrangers are also musicians and composers.

THE STUDIO TECHNICIAN

Recording in a studio can make or unmake a composition. The Technical aspects that contribute to make a recording soothe the discerning listeners is secured by a studio technician. Among the studio technicians now most availed of are Dindo Aldecoa, Dante San Pedro, Dindo Aldecoa III, Jun Payumo, Jun Orenza, Edwin Borja, Monching Payumo, Edwin Luna, Joseph Roxas, Angee Rozul, Aji Manalo, Jerry Joanino, Jeffrey Felix, Eric Claridades, Gil Mnaois, Carrly Campos, Jovi Marques, Jun Vapor, Dominic Benedicto, Dante Tanedo, Rick Menesis, Edilberto Aguila, Carlo Salcedo, Dodjie Fernandez, Rommel Villarico, Jun Reyes, Jun Orenza, Ogie Engcoy, Efren San Pedro, Boggie Manipon, Joel Mendoza, Rey Palac, Cris Reyes,Albert Tamayo, Ferdie Marquez, Gerry Samson, Arnold Jallores, Dan Martell, Eric Apuyan, Tats Suzara, Boyet Aquino and others.

THE MANAGERS

The managers are those who run the business affairs of the artist. They schedule the appearances, concerts and various commitments of the artists. Among them are Boy Abunda, Aster Amoyo, Veanna Fores, Butch Dans, Ronnie Henares, Wyngard Tracy, Dulce Lukban, Norma Japitana, Girlie Rodis and Angeli Valenciano.

HISTORY OF PARI

The first recording industry association in the country was formed in the mid-60s. Called the Recording Industry Association of the Philippines (RIAP), it was composed of the so-called Big 4 namely: MARECO, owned by Manuel P. Villar; Super records (Simeon Cheng). HIDCOR (CIE) (Alfredo Lustre) and MICO (Contreras). MARECO had CBS and RCA, Warner Elektra and Atlantic and Mercury; Super had London and Parlophone. HIDCOR had MCA and MICO, Capitol. These recording companies had a monopoly of the foreign labels with MARECO having the biggest share. Its first president was Manuel P. Villar of MARECO, who with his effort to produce voluminous local recordings mostly traditional, had earned for him the title of Father of Philippine Recording.

HIDCOR was then represented by Alfredo Lustre, Super Records by Simeon Cheng and MICO by Eusebio Contreras. The main purpose for which the association was formed was to protect the members from record piracy, which was perpetrated by some clandestine small-time, Chinese producers. There were some arrests made and some perpetrators were hailed to court.

The association also aimed to improve local talents by producing more local music and which they did. It was in the '50s and the '60s when many original recordings of balitaws haranas, kundimans and folk songs came into being.

THE COMING OF YOUNG PRODUCERS

In the early 60s a group of young producers arrived in the recording scene. They started first with adaptations, ultimately coming out with original Pilipino pop.

These young producers, who were then in their early 20s were Tito Ty of ANS records; Vic del Rosario and Orly Ilacad of Vicor Records; Buddy de Vera of Alpha records; brother Luis and Mike Lee of D'Swan Records; Danny Subido of Kath Records; Eli and Nonoy Balboa of Grandeur and Ronnie Villar of MARECO Records, most of whom are still active in recording.

The 60s also saw the emergence of Dyna Products headed by James Dy, as a major licensee of foreign labels and Vicor breathing close behind. In the mid-70s Villar slipped down from its top billings as Dyna and Vicor further pursued an energetic marketing approach.

The first president of PARI was Antonio Lustre of HIDCOR, who was elected immediately upon its formation in midyear 1976. In its formative years the association had over 20 members. Its anti-piracy project lifted off in February, 1978 with the raids of known music pirates in Raon, Quiapo and Cubao, Quezon City. It was spearheaded by Vic del Rosario of Vicor, with the assistance of the Bureau of Internal Revenue personnel.

To stimulate further activities, in 1978 the association hired Danny Yson, a writer in the business of music, as action officer. That same year James Dy was elected president and the antipiracy activities were further boosted. Dy, who was also the chairman of the prestigious Asean Music Industry Association (AMIA), led the ASEAN in the anti-piracy activities.

In the second year of James Dy's term he proposed to the AMIA the holding of the ASEAN Popular Song Festival which was immediately approved. The Asean popfest, a brainchild of Danny Yson, gained local support through the intercession of PARI chairman Teodoro F. Valencia. The first Asean Popfest was staged in the Philippines during the term of Danilo P. Olivares' presidency in 1981. It was the first international competition held in the country. Grand Prix winner of the said edition was Magsimula Ka, composed by Gines Tan and interpreted by Leo Valdez. The Asean Pop fest rotates yearly among the Asean countries; Hongkong, Singapore, Malaysia, Thailand and Philippines.

In 1980 the association adapted a resolution setting up the position of professional president, to which Danilo P. Olivares, formerly of Disc Corporation was elected unanimously.

INDUSTRY SALES

In the '60s, singles (45rpm) was the main commodity. Sales of LP picked-up only in the end of the decade. Sales was estimated at around P50 million. For a long while a single (45rpm) cost P 2.00 as against P 9.00 today; the LP P 10.00 against P 90.00. 8-track then was a fledging commodity; cassette users are still few.

The units sold during the 10-years period 1975-1985 varies every year. In 1975 the single (45 rpm) were still top sellers ( both in units and in cash ) over the long play albums. Cassette and 8-track are seeing its dawn. Sales was estimated at P80 million.

By the end of the '70s the LPs were the main sellers surpassing the singles in money volume but not in units. The 8-track had shown tremendous potentials, this being the jeepney's music source. In the early '80s the cassette sales had grown tremendously, propped by influx of cassette playback from the Middle East workers. Today pirate CDs have proliderated in view of the availability of its high speed duplicators coming mostly from Chinese sources.

Then the yearly sales by format was estimated at about P200 milion. The ratio then of sales by format was estimated at about 35% singles, 50% LPs and 15% on tapes. In 1985, the ratio in sales was about 10% singles, 20% on LPs and 70% on tapes. Legitimate sales was estimated at between P130 to P150 million yearly from the period 1975 to 1985.

It is sad to note that the sales volume from 1979-1985 despite the price difference, had not increased within the said period. Sales went up in 1986 to 1988 between P 200 to P 300 million only because the cost of records went up. The number game is almost the same. The phenomenal increase from 1989 to present was presaged by the increase of sales of OPM due to Executive Order (EO) 255 and the CD format.

In 1989 when recording of Pilipino music were started to be plugged by radio stations, sales jacked up to over P 400 million. In 1990 sales volume recorded a staggering P 1billion, a big part of which can be credited to Pilipino music.

OPM VS. INTERNATIONAL MUSIC

One of the golden eras of Pilipino music in recording was the period between 1950-1960. With the leadership of Villar and MICO there were recorded voluminous recordings on harana, balitaw, folk songs, and folk dance music. These recordings became very popular the producers batted for its airplay in all stations, which were then receptive and nationalistic.

The period 1975-1979 was the next golden era of Pilipino music. Almost 50% of the cash intake from recording were generated by the so-called "locals". This was presaged by BMC Resolution No. 75-31. With the advent of EO 255 in 1987 is safe to say that its best years are not far behind.

COST OF PRODUCTION

As cost of production and publicity soared there was a realignment of priorities. At times when cost of commodities were high recordings are relegated to the least priorities of household requirements.

In 1975 production of a single was between P 1,500 to P 2,500 as against P 10,000 to P 15,000 in 1985; LP from P 20,000 to P 30,000 as against P 80,000 to P 150,000. In 1990 it cost between P 250,000 to P 300,000 to come up with a respectable production of a long play (about 10 songs). Most recording companies do not issue singles anymore.

The cost enumerated above was aside from the cost of promotion such as print and TV advertising, radio pluggings and live promo which sometimes double the production. In short, to promote the song of a known artist, a producer may spend no less than P200,000 up to P500,000 to P1 M now and one was not even sure that the song would sell. Bulk of the promotion goes to the cost of radio and TV pluggings. And then it is estimated that only one or two releases from out of ten do really sell.

On the other hand, radio stations do not want to plug Pilipino music because "it is not good for their ratings" a fact which they do not want to accept in public. Some of them even play canned radio programs from the U.S. The international repertoire, since their artist and songs are world renowned, are automatically played on the radio ( with out plugging cost to the producer ) and thus are automatic sellers.

MANPOWER IN RECORDING COMPANIES AND RELATED INDUSTRIES

The process of coming up with a finished product starts with the hiring of a producer who selects the artist, composer, musician and recording studios. After coming up with a master from the studio (the licensors send this to the local licensee) the duplication of thousands and thousands of pieces at duplicating plants (both on pressing single or long play and cassettes dubbing). These are delivered by the licensee of the producer to record outlets nationwide. From a glance, the process of promotion and the ensuing live performances in various venues (hotels, clubs, restaurants, etc.) and singing versions by other artists, and the export of Filipino entertainers, one can gleam the magnitude of the manpower being turned out by the music industry. Music starts to become a reality only after it has been produced and made public by recording companies.

Then what would radio stations be without music. The broadcast media rely on canned music for their prepared materials. These are produced by recording companies.

PROBLEMS AND PROPOSED SOLUTIONS

A recording is being relegated to the least required item in the household as the economic crunch moves on. The reason why sales of the industry has become stalled at between P 130 to P 150 million annually for the past ten years (1975-85) is because the Philippine market had never really expanded. Recorded materials could only be reached by those "who have". While our selling price is one of the lowest in the world (P 75-P 90 per LP cassette) as against $11 in US, Y200 in Japan and DM40 in Germany) it is still way above the reach of the common tao. The proliferation of radio stations (almost 300 in the country as against 2 or 3 each in England or France and also limited in other countries) contribute to less buying practice especially among the have-nots. One has only to turn the knobs of their radio sets every time he/she wants to hunt for his/her favorite piece.

The Filipinos are very colonial-minded when it comes to music. Many instances could be documented wherein a personality or a "oldie" station when changed to pop, its rating easily goes up and thus more advertising revenue. However, such problems has plauged Europe and South American countries whose airlines have been crowded by American pop and the solutions reached was to improve apportioned airplay for their local music.

Some countries like Italy, Spain, and Mexico spent over $3-4 million by sending out their artist and songs to America and they have been successful with the acceptance by the American audience. Japan is the No. 2 recording country in the world, next to U.S.A. If we can make Pilipino songs hit in Japan, half of our problem is solved.

SOCIAL AND ECONOMIC CONTRIBUTION

Nothing can beat the power of music in helping to make things happen. The so-called February revolution was replete of songs designed to intensify feelings. Lovers woo with music. The entertainment cogs (movie, live shows, TV shows, radio programs, stereo player) are propelled by music coming from recording minted out by record producers. The 100,000 singers and dancers we export annually to other countries and who earned no less than $500 million yearly learn the rudiments of their trade through recorded music.

We are a music-loving country. Our composers and singers bring honors to our country by winning international competitions, in other countries it may be translated into economic realities if properly encouraged and supported by the government with appropriate legislation.

With government assistance we may soon have somebody like the Beatles of England and the Abba of Sweden who helped prop the economy of their country with billions of dollars in the form of royalties received from the users of their songs in other countries.

**MUSIC PIRACY - A MENACE

The Philippine music industry was a P2 billion thriving industry before the vicious tentacles of music piracy choked it to near collapse starting year 2000.

The industry has:

1. Brought pride to the Philippines as our talented singers and composers won recognition and reaped awards in concerts, on the legitimate stage and theaters, in live music circuits, and in recording all over the world.

2. Contributed to the economy by providing thousands of jobs within the record companies such as sales girls, promo girls, drivers and delivery boys, as well as in allied industries like record bars, radio and TV stations, recording studios, concert venues, production staffs, costume providers, printing companies, disco and video bars, etc.

3. Provided financial support to government by way of paying millions of pesos in various taxes.

4. Brought entertainment, joy, happiness and inspiration to all Pilipinos through our beautiful original Pilipino music.

5. Discovered and provided opportunities in the field of music to our many talented singers, musicians, and composers.

In 2001 alone, sales plummeted by 42.5% because of piracy. This was when at least thirty big record bars in Metro Manila, Cebu, Davao, Iloilo and Cagayan de Oro were known to have closed shop because pirate vendors were selling pirate CDs right beside or in front of them. The Philippine Association of the Record Industry (PARI) which had a total membership of 43 companies in 2000, lost 8 of its members in 2001 which closed shop.

As an indication of poor sales, PARI certified gold and platinum awards given in 2001 were only 18 compared to 35 in 2000.

The culprit is rampant CD piracy.

Why has piracy suddenly become so big that legitimate industries are on the verge of collapse?

1. Like drugs, piracy is big business with little capital. Thus the entry of big time well organized international syndicates.

2. There is a big demand as consumers are attracted to the cheap bargain of pirate CDs and VCDs.

3. Government initially perceived piracy as a victimless crime. It was only after government realized the economic, social and cultural ramifications that government seriously took a stop to fight piracy.

Pirate CDs which started in 1997 in the Philippines, was then sold from P800 to P1,000 for compilations. From 1997 onwards, as pirate CD plants began sprouting all over the country, pirate prices went down to P600 in 1996, P500 in 1997, P250 to P300 in 1998, P100 to P150 in 1999, P50 to P100 in 2000 and 3 for P100 in 2001.

The pirate volume increased as surplus production abroad are smuggled into the country and as replication equipment from other countries are brought in by international syndicates in a tie-up with local pirates. These machines, already depreciated in other countries, can still produce thousands of CDs a day. There probably are around 30 such replication machines that have been brought into the country.

The pirates took advantage of the limitations of the legitimate record companies. They compiled hit songs from various companies, put more songs (15 to 20) to a CD than that of a legitimate CD (10 to 14), and brought down the prices rock bottom because they have no overhead whatsoever. They copy only the hit songs, so they do not need to promote and advertise. Cheap, poor quality CDs were being mass produced and/or smuggled in.

The legitimate record companies, on the other hand,

1. are restricted by contractual obligations regarding compilations of various songs, esp. regarding songs from other companies.

2. incur high production and manufacturing costs, from research and development, advance royalties to composers and singers, fees of musical arrangers, music directors, musicians, recording studio costs, replication costs, advertising and promotion, sales distribution and administrative costs, and unsold returns.

3. pay value added tax, manufacturing tax and income tax.

In 1997, pirates involved in the replication, smuggling, distribution and retail are mostly Chinese Filipinos. When PARI’s anti-piracy campaign started raiding the retailers/vendors especially in the malls, the Chinese-Filipinos in 1999 entered into an unholy alliance with the Moros from the South, mostly Maranaos, and turned over the retail aspect to them. The Moros have an existing well organized retail network all over the Philippines, from the smallest town to the biggest cities, selling pirate cassettes, wrist watches, sunglasses, playing cards and other fake products. The alliance was a perfect combination.

Within two years, all public markets, major streets, and malls all over the country were flooded with pirate CDs. Being well financed, well stocked, and well protected by syndicates, vendors replenish their stocks faster than law enforcers can seize them. There were just too many of the vendors, much much more than the few law enforcers tasked to protect intellectual property rights.

Furthermore, law enforcement is hindered by the following:

1. Law men are hesitant to confiscate pirate CDs by themselves, because of their lack of expertise in knowing what is fake and what is not.

2. Law men could only arrest the sales girls, while the real owners and syndicate members fade away and vanish during raids.

3. Law men are outnumbered by the Moro vendors and their protectors, who are armed and who fight back.

4. Law men are hampered by the limitations in enforcing the principle of the “plain view doctrine” and hence have to rely on search warrants, which are very tedious to obtain.

5. Many prosecutors, especially in the provinces, are not knowledgeable on the copyright law, and are often protective of the vendors.

6. Even with respect to search warrant operations on replication plants, often only workers are identified and arrested while the real owners go scot free. Some warrants are quashed and the seized equipment returned. Cases are seldom filed as there are no respondents. Many times warrants were quashed by the same judge who issued the warrants.

Government, with its resources and law enforcement capabilities, must step in to forestall the further deterioration of the industry.

1. New laws must be enacted to increase penalties and put more teeth to enforcement.

2. Search warrants must be allowed to be secured outside the area of operation in order to pre-empt leaks and hometown decisions.

3. Special prosecutors and judges must be well versed in the copyright law.

4. Cases filed must be expeditiously tried within a short period of time.

5. All government agencies tasked to protect IP must have well-coordinated action plan.

The private sector, on the other hand, must invest more money in its fight against piracy so that it can hire more investigators all over the country. They must be persistent in their court cases so that pirates can be actually put to jail.

**AUDIO VIDEO DISC PIRACY - A SITUATIONER

Optical disc piracy (audio and video CD, software, playstation) in the Philippines was practically negligible up to 1997, while cassette piracy was contained and limited to sidewalks, public markets, and door to door selling. In 1998 the industry suddenly found itself faced with a deluge of pirate audio and playstation CDs, mostly imported from Malaysia, Taiwan, Hongkong, and China.

In 1999, the situation became worse as the Chinese-Pilipino mafia, as the pirates are referred to, also went into illegal manufacturing as excess machines from Hongkong, Macao, China, Taiwan and Malaysia were shipped out to other countries including the Philippines. Foreign pirates teamed up with local Chinese-Pilipino pirates in the importation and/or local manufacture while the Chinese-Pilipino who used to do the retail now used the Moros from the south to handle the retail aspect of the business throughout the country.

The arrangement is logical and practical. The Chinese-Pilipino mafia have the money, connection, and know-how, but they do not fight back while the Moros, mostly Maranaos from Iligan and Marawi and Maguindanaos from Cotabato, who are well organized and whose network of distribution covers all towns and cities from Aparri to Jolo, fight back. They have even terrorized and intimidated the police force in many towns and cities as far as Northern Luzon.

Worst, in 2000, the Moros, seeing how lucrative the business is, now also have entered the illegal manufacturing business. It is feared that the MNLF before and the MILF now have also entered the picture as protectors and financiers of the Moro traders, making this a rich source of funds second only to drug trafficking.

Pirate audio CDs, which retail up to P900 per disc in 1997 now retails for P35 only. The situation is further aggravated by the entry in year 2000 of cheap (less than P2,000), good quality clone VCD, CD, MP3, playstation players. Pirate CDs are sold even in the classiest malls and shopping centers (except in SM and Rustan Malls), in fleamarkets, public markets, sidewalks, door to door, and even in church and government and private office bazaars especially during the Christmas season - ALL OVER THE COUNTRY.

It is estimated that the pirate audio disc piracy is now a P1 Billion a year illegal business while the legitimate industry has dropped by 25% in year 2000. With the vigorous anti-piracy campaign that has been waged since 1998, at least 15 replication machines have been confiscated, but at least 12 more are still to be identified, located and raided. More machines are expected to be brought in into the country as the governments of Malaysia, Hongkong and China crack down on piracy in their territory.

It is also estimated that around 50% of pirate CDs and VCDs enter the backdoor through General Santos City and Osamis City, were even now rice and sugar are smuggled and flood the South, an open secret in Mindanao. The other 50% are locally manufactured mostly in Luzon.

The Philippines - terrorized by Moro bandits and Muslim separatists who have their tentacles as far as the remotest barrios in the north, wracked by worsening widespread poverty, graft and corruption and discontent, with thousands of miles of unprotected shoreline that are conducive to smuggling, with a government beset by gargantuan problems brought about by years of mismanagement apathy - it is the best scenario to be the dumping ground and center of piracy and counterfeiting in Asia.

**HOW CAN GOVERNMENT AND THE PRIVATE SECTOR IMPROVE THEIR ANTI-PIRACY EFFORT?

All over the world, the most visible and most prominent example of widespread IPR violations is AUDIO and VIDEO PIRACY. Because it greatly affects the entertainment industry, the most vocal advocates against piracy are the music and film producers and the high profile recording stars, composers, and movie stars. Together, the audio and video industries compose the loudest voice that have asked the World Trade Organization for IMMEDIATE, SUSTAINED, AND DECISIVE action against piracy especially in countries where enforcement is perceived to be lacking.

We in PARI together with film and video industries are willing to go all out in the fight against piracy. But we need government’s support, infrastructure and resources. A wholistic approach is necessary with short range and long term courses of action that will also have a short and long term solution to this economic menace that has:

- contributed to discouraging and even driving away foreign investors

- deprived government of millions of pesos in tax

- given the country a bad image abroad as a pirate center

- given rise to retaliatory economic and trade sanctions from other countries

- stunted the growth of legitimate companies and has even caused the collapse or retrenchment of some, causing more unemployment

- discouraged the creativity and initiative of the Pilipino artistic and business talent, resorting to being mere copycats or worse to illegal business practices

We the private sector are willing to provide our limited resources, manpower, and expertise to bring the perpetrators behind bars.

* Courtesy of Electromat Manufacturing
** Courtesy of Danny Olivares, former PARI president

   

 


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