The world phenomenon with technology has finally infiltrated into the recording industry. College students around the world are getting their favorite music songs and downloading them from the internet illegally. College students are the majority of the downloader's, but with the release of the MP3 player and the I-Pod just about anyone now a day goes and downloads music songs illegally. The recent phenomenon came about when college students were using a program called Napster to get their music from, but Napster was taken offline due to copyright infringement laws. Now Peer-2-Peer networks are now becoming the next big wave in the transfer of music. The problem with the downloading of music is the basis by the recording industry of saying that it is copyright infringement and that music downloader's are stealing music. The law on online piracy was unknown thing until Napster came about then the United States Congress passed what is called The Millennium Digital Act.
All of this has affect on the economic profits of the recording industry. I will look into whether or not all of these aspects really do affect economic profits of recording industry and their artists.
The MP3 player was released for consumers to get around with a light weight device that can play music. This device usually could hold only hold up to about 100 songs depending what size of hard drive you got. As a means of profit and to get more people into the digital age Apple released the I-Pod into the mainstream market and consumers were buying them like they were candy. The I-Pod is a device that can hold and store music files of people's favorite artists to listen to them whenever they wanted to. This device can hold up to 10,000 songs. The deal with the I-Pod is that consumers were supposed to buy songs legally on Apples website called iTunes. They were to charge for each song download or album downloaded. Songs can range from $0.99 to $2.99 for an individual song to be downloaded. Albums can range from $9.99 to $13.99 to download. The premise of the I-Pod was for people to stop illegally downloading music and for the recording industry to start making money on individual who would rather download songs than go out and buying the whole album of an artist. The I-Pod has become very successful economically to the recording industry. They still are trying to get people from downloading illegally to paying for what they download.
The main way that students and individuals get their music from is what is called a Peer-to-Peer (P2P) Network. These are file sharing programs that allow people to send and receive files from one another. The major P2P networks are Kazaa and Bit Torrent. Kazaa took over to mainstream society when Napster was took offline. It has the same premise of the downloading and sharing music files. All individuals have to do is install the program and run a search for their favorite song and a list comes up with the users that are sharing the file and are ready for download. Bit Torrent has the same principle, but is for the more advanced computer literate. They do run on P2P program just not a central network like Kazaa. Individuals host the file by themselves on their computer and post a torrent link to their file and individuals can download the file from the user. It is much more for the computer inclined.
When using a file sharing network just simply putting a shared folder of music on the network does not necessarily mean that you are purposely trying to distribute that files in that shared folder. (Borland) These individuals are not oblivious, they realize what they are doing is illegal. When having a program like Kazaa or Morpheus there is no way of advertising that you have the file on your computer. The only way someone can know if you have a certain file on your computer is if they search for it and the individual comes up as user that is hosting the file
The recording industry is filing several lawsuits against P2P networks like Kazaa and Bearshare for copyright infringement. They are suing them because music is being transferred through their programs illegally. The Bit Torrent program is different because of the fact that individuals create files to be downloaded and host them on their computers and instead of going after the program developers and makers they are going after individuals who share files. The lawsuits have put extreme pressure on Kazaa and Bearshare to close down their programs, but still to this day are up and running. The reason that RIAA is filing lawsuits is because of the copyright infringement and the fact that it is illegally to distribute music to others without a license to do so. Recently a mass flood of lawsuits by the RIAA has stopped some users from file sharing, but that is only one individual when there are millions of users a day using P2P networks. They are trying to fight battles that up to this point are not winning. "The Campaign by the Recording Industry Association of America (RIAA) to sue music downloader's has brought these kinds of actions and their consequences to the public eye like nothing before" (Pike). By bringing online pirates on the internet to the world's attention is going to be detrimental to the recording industry even more. People that are not even aware that music files exist for free on the internet are now going to start looking into on how they can get free music. In doing these actions by the recording industry more and more people around the world are going to start downloading music because individuals will have the impression of that there is 2.5 million people downloading music, and that they will never be caught because they will not be concerned about a person downloading just a couple songs.
Although music file sharing has gyrated up and down since the suits commenced, BigChampagne, which tracks file-sharing networks for media companies, estimates that the average number of people at any one time on peer-to-peer networks in the U.S. has risen 22% during the past two years." (Pike) One of the most popular reasons of why P2P is because of all of the media coverage on suing people for file sharing. This media coverage you would think would be a bad thing for recording industry. Individuals are seeing this news stories and are becoming curious and are wondering how they can get music for free to. One thing that people should wonder is if the BigChampagne company that is tracking people on P2P networks is legal or not. They are tracking individuals without their consent or knowledge of them being tracked which to me is violating the right to privacy in America. Now even though the RIAA and MPAA have recently filed hundreds of lawsuits the numbers to this point are still undecided of whether or not the lawsuits that the two companies are bringing about have any affect on the peer-to-peer networks. Numbers are climbing in total number of people accessing the P2P networks and when looking at the numbers of album sales it has also risen as well. They say there is no correlation between the two (Pike) All and all it comes down to the principle of the matter which is that it is illegal to steal someone else's hard earned music. When sharing and downloading these files you might not care, but the recording industry does care because of the fact that they are losing thousands on each individual album because of piracy. The 24 and under crowd has been buying albums just not at a rate which they once were. This problem is due to online piracy and music files becoming more easily accessible.
Even though all of the effort by the RIAA of trying to prosecute individuals for sharing and downloading music files has been increased, they still can't seem to keep up with the 2.5 million individuals that are pirating illegal music. The fight has now gone to the court system of whether or not of what individuals are going to be held responsible for downloading and sharing pirated music. (Pike) File sharing in America alone has been increasing ever since the Napster program was thrown into main stream society. Even though RIAA wants piracy to stop, it has now become a nation wide phenomenon that is increasing more and more everyday. The fact that people are now going to start having to go up to the court system and plea their cases will have some effect on people downloading and sharing music files. The problem is that individuals are now settling out of courts and paying fines for pirating music. The problem with that is that court decisions and laws are being slowed down to determine of whether or not file sharing is legal or not.
File sharing in America alone has been increasing ever since the Napster program was thrown into main stream society. Even though RIAA wants piracy to stop, it has now become a nation wide phenomenon that is increasing more and more everyday. The fact that people are now going to start having to go up to the court system and plea their cases will have some effect on people downloading and sharing music files. The problem is that individuals are now settling out of courts and paying fines for pirating music. The problem with that is that court decisions and laws are being slowed down to determine of whether or not file sharing is legal or not. Even though all of the effort by the RIAA of trying to prosecute individuals for sharing and downloading music files has been increased, they still can't seem to keep up with the 2.5 million individuals that are pirating illegal music. The fight has now gone to the court system of whether or not of what individuals are going to be held responsible for downloading and sharing pirated music.
"On Aug. 19, the Ninth Circuit Court of Appeals found that the distribution of the Grokster and Kazaa peer-to-peer application were not liable for contributory copyright infringement" (Pike). This court decision of only affects the ninth district court system. Not the entire United States. The United States is split up into many districts, which for to be recognized as a nation wide mandate it would need to be approved by the Supreme Court of the United States. This decision is a vital case in America because it gives more creditability for individuals who download and share music files on file sharing networks. This decision is it a hit for the RIAA because their music is steal being stolen and the courts are telling them that individuals have the right to download and share music files.
Since the demise of Napster the United States Congress passed a bill called the Digital Millennium Act. This act was created to give guidelines of online piracy and was constitutes illegally for legal. Though this act is signed into law it to this day is extremely vague on specifics of what is and isn't allowed by file sharers.
File sharers finally have something to fight back to RIAA and the Music Industry. In a recent research study done by Harvard Business School and the University of North Carolina Chapel Hill, They have came to the conclusion in their study that music downloading does not have an impact on albums sales of individual artists. "The study finds strong evidence that the music industry's marketing campaign to continue to influence what individuals listen to. For example, showing a music video on MTV increases both the number of downloads and legal sales of that release" (Aisner). When recording industry mass market an artist they should not expect anything less than people going out and downloading music files, but as shown in the research there is an increase of albums sales which, but the question comes back to whether or not its right to download music or not.
When doing their research the researchers discovered that it would take many downloads to affect one album sale. "Even in the most pessimistic statistical model, it takes 5,000 downloads to reduce the sales of an album by a single copy. If this worst-case scenario were true, file sharing would have reduced CD sales by 2 million copies in 2002" (Aisner). One of the main reasons that the research backs this statement up is because of total album sales within the last year have not declined, but have risen to higher sales than the previous year.
When looking at the research that is backing music pirates the industry is of course saying that the research has no creditability. They are scrutinizing the research because they did their time frame of research during the holiday season and that did not take into fact of what happens after the holidays in the normal time of the years and that during the holidays there is of course going to be widespread consumer purchasing of music. (Cave) The research that was conducted by Harvard Business School and North Carolina also did research on music sharing and downloading in the months that are not around the holidays. The marketing of albums for artists for the holidays I believe to be more than normal when the holiday's times are not around. This is will of course effect the data that researchers conducted. There is no one way of conducting fair research without one side or the other saying they did something wrong didn't take into affect a certain part of ones side in the research.
When looking over the stastics of what the researchers did from Harvard and North Carolina I came across facts showing that illegal music downloading isn't just an American problem. This problem has spread globally from Japan to European Union. More and more people are becoming computer literate or are having the motivation to go out and research themselves on how to get music for free. This phenonmenon will have a global economic impact eventually its only a matter of when it happens. Though the research shows that it is having no impact there are still people in the world that have no clue about downloading music and are oblivious to the situation.
"A look at the nine months from January to September by BigChampagne shows a 13.2% hike in file sharing, while market researcher Soundscan reports a 5.9% jump in album sales growth." (Green) When looking at those numbers of people who are file sharing to albums sales it seems that the recording industry is still making its profit. If the numbers are true then I do not see the reason for the uproar of the music industry. The only reason they would have is that it is illegal for people to share copyrighted material and that would be there only claim which to some extent is still up for debate.
In a recent act by some of the top films industry's decision makers they held a focus group of about 20 college and high school students. They were told to find and download some of the movie industry's top new movie releases, which the students were successful in doing so. The purpose of the focus was to determine whether or not students would stop downloading movies. Like the movie industry expected the students said that they were not going to stop anytime soon. (Holson) The point of this study really makes no sense because when doing their research all they asked kids to do was download some music and ask them if they would stop. Of course when you tell someone to stop doing something they are going to want to keep going. This research study by the company has no valididty.
"The Internet is more like radio than we thought. People listen to two or three songs and if they like it, they go out and buy the CD." (Cave) When an individual listens music whether it be on the radio or internet they do not go out and immediately go and buy the CD. I do believe that the radio is becoming more and more like the radio with the technology of streaming media and being able to listen to any one song at ones request is becoming a lot easier than just turning on the dial to the local radio show and to maybe hear something that someone does or does not like. "If it were true that increases in downloads decreases sales, we should see that whenever we have fluctuations in downloads, we would have fluctuations in sales. That's not what we've found." (Cave) I do not think that necessarily there should be a correlation in downloads to music sales. Even though individuals to download music some do go and purchase the album, some just choose to hear the song before it is released into society. There needs to be more studies done on online piracy to come up with for sure answers, but the problem with that is who sponsors that research. When you look at it no matter what it will be bias on whoever has the funding to produce the research. The problem is, is that I do not think that anyone that conducts research will not have their bias into doing such research because you either like piracy or you don't.
"If it were true that increases in downloads decreases sales, we should see that whenever we have fluctuations in downloads, we would have fluctuations in sales. That's not what we've found." (Cave) I do not think that necessarily there should be a correlation in downloads to music sales. Even though individuals to download music some do go and purchase the album, some just choose to hear the song before it is released into society. There needs to be more studies done on online piracy to come up with for sure answers, but the problem with that is who sponsors that research. When you look at it no matter what it will be bias on whoever has the funding to produce the research. The problem is, is that I do not think that anyone that conducts research will not have their bias into doing such research because you either like piracy or you don't.
When looking into all research studies that have been done and are being conducted, all of the reports are saying that online piracy doesn't affect economy or album sales in anyway. The research to me is quite vague because of the fact of the sample sizes and who funded the research. Research no matter what will always be biased it how's the person interprets on how the research was conducted and if it was creditable. The affect the technology is now having on the music industry is hurting them now. They are fighting back with lawsuits and new devices to way to get music songs for cheaper than buying a whole album. College students will always try to get as much as they can for free whether it be food or music they will have a say in what way the recording industry moves next. An overall view of the subject matter is still this point to me undecided because not enough research has been done, but for now all we can say is that online piracy and music downloading has no effect on the economy.
Aisner, Jim. "CD Sales Not Reduced by File Sharing, Say Researchers at Harvard Business School and University of North Carolina, Chapel Hill" Online Posting. March 2004. Harvard Business School. 29 March 2004 http://www.hbs.edu/about/news/032904_file_sharing.html.
Borland, John. "Judge: File Sharing Legal in Canada." Online Posting. March 2004. CNET News 31 March 2004 http://news.com/Judge+File+sharing+legal+in+Canada/2100-1027_3-5182641.html
Borland, John. "Music Sharing Doesn't Kill CD Sales, Study Says." Online Posting. March 2004. CNET News. 29 March 2004. http://news.com/music+sharing+doesnt+kill+cd+sales%2C+study+says/2100-1027_3-5181562.html
Cave Damien, " Don't Blame Kazaa." Rolling Stone 29 April 2004: 17. Academic Search Premier. EBSCOhost. Mount Hood Community College Library, Gresham, OR. 23 January 2005. www.ebsco.com/home/
Green, Heather and Sager, Ira. "File Sharers: Can They Be Scared Away?" Business Week 22 November 2004: 16. Academic Search Premier. EBSCOhost. Mount Hood Community College Library, Gresham, OR. 23 January 2005. www.ebsco.com/home/
Holson, Laura. "Studios Moving to Block Piracy of Films Online." New York Times 25 September 2003.
Pike, George. "Who's Responsible for Copyright Infringement?" Information Today Dec. (2004): 17-19
Rupley, Sebastian. "Making Movies, Taking Movies Lawsuits are coming for People Trading Films Online." PC Magazine 28 December 2004: 19