Five people are starting jail sentences today after one of the region's biggest film and music bootlegging operations was smashed. Neil Hunter looks at the case and the problems piracy is causing for the movie and music industry.

To many people, it's a crime in which there are no real victims, where the only ones to suffer, albeit slightly, are the multi-millionaire pop stars who can afford to lose a bob or two any way. But that's not how the British Phonographic Industry looks upon the pirates who mass-produce counterfeit copies of the latest Hollywood films or chart albums.

The BPI's anti-piracy unit acts on behalf of around 2,000 labels and thousands of artists, and takes seriously the problem of people ripping them off.

They consider the crime so grave that they are prepared to spend vast amounts of money on cases such as the one which came to an end yesterday with the five members of a North-East gang being locked up.

Teams of investigators spent more than two years compiling a dossier of evidence against the two ringleaders and members of their family, and friends.

Surveillance teams followed Paul Canning and Mark Bailey from their homes and watched them selling their CDs and DVDs at car boot sales and markets across the region.

They arrested the pair after raiding their homes and confiscating an array of computer equipment, discs and home-made inlays for the films and albums, but within months the pair were trading again.

Canning was found to have shifted his operation from his home on Wearside to a caravan, while Bailey was said to have used a shop in Washington for his copying.

During their undercover operation, helped by officers from Northumbria Police and Durham Constabulary, the investigators were also able to link partners, sisters, parents and friends into the scam which is said to have made more than £11,000 a week and more than £1.2m in total.

The cost of the operation to the owners of the copyrights of the chart albums and blockbuster films, however, was yesterday estimated to be more than £8m in lost sales.

The massive returns and relative low risk makes counterfeiting attractive to people who need no more than a simple understanding of computers and a comparatively small amount of money to buy essentials, such as disc copiers, a scanner or printer and the original CDs or DVDs to use as master copies.

The National Criminal Intelligence Service claims to have unearthed evidence which links counterfeiting to organised crime gangs involved in terrorism, people smuggling and drug importation.

These claims have been dismissed on more than one occasion by trading standards officials and police in the region, but there is no doubting it is becoming big business - and nowhere more so than in the North-East.

David Martin, the BPI's director of anti-piracy, says: "Last year, we estimate one in three CDs bought around the world was a counterfeit copy.

"It is not that bad in the UK because we have got good laws and enforcement, but the situation is becoming more serious as technology improves and becomes more easily available.

"You have heard in this case that you can make CDs and DVDs easily on a computer at home, and for that reason it is becoming more serious in the UK, with the North-East particularly bad.

"High levels of unemployment play a part in it, but it seems that a proportion of the public seem only too prepared to buy these copies.

'I suppose the challenge for my industry is to try to educate the public that it is not a good idea to do this."

The message that people are wasting their money buying inferior copies which will either play badly or not at all seems to be getting lost on many cost-conscious consumers.

Mr Martin, therefore, is hoping the supply can be curtailed by sentences such as the three-and-a-half years handed down to Canning and Bailey by Judge George Moorhouse yesterday.

"I am delighted," was his reaction after the case. "I think it sends a powerful message to any would-be counterfeiters.

"We have heard the judge's comments and he has underlined how serious the offences are.

"With a maximum sentence of ten years, people can expect to go to jail now if they are caught dealing in counterfeit goods in such a big way."

Investigators from the BPI's anti-piracy unit completed 150 raids in 2003 and gave evidence in 943 cases.

They work closely with police, trading standards officers and international bodies to see through such investigations of copyright infringement and ensure the culprits end up in court.

Mr Martin is keen to see an end to the growth rate in commercial music piracy which, at 13 per cent, was six times that of legitimate sales in 2003.

He simply refuses to accept the argument that people would not have to resort to buying illegal copies or making bootleg versions themselves if the CDs and DVDs were not priced so highly.

And he rejects the notion that nobody is harmed by illegal operations such as the one set up by Canning at his home in Houghton-le-Spring and Bailey at his ex-council house in Leam Lane, Gateshead.

"It may be right that top stars such as Robbie Williams do not notice it too much," he accepts, "But there are many hundreds of artists whose careers cannot be developed because there is a lack of investment and one of the reasons for that is music piracy.

"As well as record companies and artists, we represent record shops, and the smaller, independent ones are going out of business because they can't compete with the likes of these people, who frequent car boot sales.

"I am interested in the young artists whose careers can't be developed and the smaller retailers who are going out of business because of activities like this.

"It is not a crime without victims."