Controversies of File Sharing

This was a 12 page paper
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The Controversies of File Sharing

“I thought it was OK to download music because my mom paid a service fee for it, Out of all people, why did they pick me?” stated 12 year old Brianna Lahara. Brianna was among the 261 individuals sued by the Recording Industry Association of America in 2003, for illegally downloading copyrighted music from online. Brianna Lahara’s mother Torres paid a 29.95 one time service fee for Kazaa music sharing service.  In addition 71 year old Durwood Pickle stated “I didn’t do it, and I don’t feel like I’m responsible,” Pickle said in an interview. “It’s been stopped now, I guarantee you that.” Mr. Pickles who is not computer savvy was also  among the bunch sued by the RIAA in 2003, however Durwood Pickles never downloaded music illegally, but his grandchildren had been. In a desperate attempt to gain justice for billions of dollars lost in the music industry annually, the RIAA began monitoring P2P file sharing networks, and attempting to sue individuals with fees up to $150,000 per illegally downloaded song. Within the last 8 years, researchers have been trying to understand the biggest phenomenon of our generation, and, how this phenomenon will look and affect our society in the future. The prodigy that’s the movement of our generation is online music piracy, or file sharing. What is most prominent about this trend is its tremendous affects it is having in our society that has not only consumers buzzing, but has the Music Industry and the Recording Industry Associate of America anxious.

Problem Statement: The Recording Industry Association of America stamps online music piracy as bad news. According to an analysis by the institute for policy innovation, global online music piracy costs the recording industry $12.5 billion annually, as wells as millions loss in jobs, workers, tax revenues, and income and production taxes. The RIAA says that online music piracy is a cause of lower album sales and robs artists of their money, time, and efforts they put into doing what they love to do. In addition, many music artists themselves complain that illegally downloading music from the internet is the same as going into a record store and stealing an album right out of the store.  The music industry is concerned of the detrimental effects that illegal file sharing is having and will have on how music is listened to, consumed, and distributed in the future. However, new research shows that illegal file sharing does not have such a tremendous affect on music artists, as is believed or the decline in album sales. Many artists have various opinions about file sharing, while some in fact have embraced this new phenomenon file sharing successfully, and some believe that file sharing is beneficial for artists, for exposure and album sales. For example, reproduced in the book ‘Downloading Music’, Music United quoted a variety of artists and songwriters on their viewpoints about illegal file sharing. Artists such as the Dixie Chicks and rapper Nelly are opposed to file sharing, believing it to be stealing, and that it robs them of the opportunity to be successful as artists. In addition songwriter Rivers Rutherford and producer Missy Elliott feel that illegal file sharing prevents them from making money from their talents, and prevents possible future entrepreneurs.  (Aksomitis, 38-40) In contrast, there are a significant amount of artists that are embracing the digital age, and file sharing in general.

For example, research shows that file sharing is giving some artists more exposure, and creating for them more of a fan base. For example, according to research in the book ‘Internet Piracy’ artist Lily Allen posted a variety of her songs online before the release of her album, as a result she gained more of a fan base. In addition musician Janis Ian agrees that file sharing accumulates more exposure as an artist as well as eventually keeps money flowing in. furthermore, the band ‘Radio Head’ released their album in 2007 by digital download on their website. However Radio Head gave their fans the choice of choosing how much they wanted to pay for their album. As a result, the trial was rather successful, on average fans paid a maximum of $8 per unit, which allowed the band to make a total of $2 Million dollars, which went straight to the members of the band. This does not negate the fact that music artists are being affected by file sharing or that the music industry is not losing billions every year; however it opens the question if file sharing is the only factor in billions lost due to dwindling record sales, and if it is the main rationale that has the music industry concerned.

Purpose Statement: Within this people I will give a brief focus on the background and research of online piracy in general, and file sharing. I will mention also the gaps in research on file sharing, which causes there to be inconclusive results on just how much file sharing affects the music industry. However later I will focus my attention on how little file sharing affects album sales, and how regardless of illegal file sharing music sales and distribution is continually rising. In addition, although the RIAA has made attempts in cracking down on illegal file sharing, but P2P networks continue to increase and the illegal downloading of copyrighted music is on the rise. Furthermore, I will discuss the possible true reasons for the music industries complaints about file sharing which has nothing to do with music, or the artists themselves. In conclusion, I will examine if illegal file sharing is in fact having tremendous and negative effects on music industry, and how will it affect how music is listened to, consumed, and distributed in the future.

Research Questions:

  1. Is the music industry being directly affected or only certain jobs within the recording industry being affected?
  2. File Sharing revolutionized how music is listened to, and consumed but will it radicalize the music industry well into the future or will it disintegrate?
  3. Has a technology such as the file sharing affected people’s paradigms of music?
  4. With technology advancing gradually every day, and the Internet becoming so highly accessible for all types of information and resources, will online music media seize power and completely obliterate store bought media?
  5. Are there gaps in research on file sharing?

Online piracy in general has been an interest to researchers since the late 1980’s. One example of research on online piracy from the 1980’s until the present has been conducted around vague surveys. For example, the first study conducted on online piracy was in 1989 by Professor of the University of Florida, Richard C. Hollinger. Hollinger surveyed 1, 672 students, however his questions were vague asking only questions like, had the participants participated in any illegal software piracy within the last 4 months. Although the results of his study showed that online piracy was a common problem even before the advent of MP3’s or digital videos, his study was vague and bias. In other words, his study consisted of undergraduate college students, and the questions from the survey gave no certain specifics.  However, online music piracy become of much interest to researchers in the early 2000’s after the prestigious file sharing network Napster was shut down after the RIAA began publicly announcing its concerns, and sued the founders. In researchers and scholars attempt to explain online music piracy and its effects, researchers conducted a variety of studies, in which surveys and phone surveys were used. For instance, the first of these studies on online music piracy was a study conducted by a private research firm ‘Pew.’ In their phone survey studies they found that 13 million Americans had engaged in at least some form of free music downloading. (Fisk 86) however this research was somewhat skeptical because the surveys focus was on free downloaded music, however this could mean illegal and legal downloads. Furthermore, another survey that was conducted in 2003, by another private firm, Ipsos-Reid, however their research focused on college students. Research showed that of the 1000 students and 300 faculty participants, 69% admitted to downloading music from P2P networks. This research was somewhat bias because of the type of participants they used, and a few of the questions asked were broad. However their research was rather successful on measuring online music piracy. From the late 1980’s until now surveys and phone surveys have been ways that researchers have been trying to measure this online piracy phenomenon.

In the last decade, with more advanced technologies, there has been a significant breakthrough for researchers on online piracy. With the internet so versatile and accessible it has given research companies and researchers the opportunities to monitor file sharing piracy firsthand. For example, private research firm BigChampagne has been monitoring P2P network traffic since 2000. The company has made significant progress in understanding online piracy by attempting to count how many simultaneous users are on P2P networks, at any given moment. However, with these P2P networks, monitoring is often somewhat difficult and very costly. It is because of factor such as these that BigChampagne never reveals how their research is done, which could make their results somewhat skeptical, but nevertheless successful.

Because research on online music piracy is somewhat rather new, researching methods are rather traditional, and not always accurate. For example, in researching online music piracy, researchers tend to look at file sharing networks. However the most popular networks, such a Napster, LimeWire, or Kazaa. For instance,  in the empirical analysis of ‘The Effects of File Sharing on Music Sales,’ and in ‘What is the Future of the Music Industry’ the researchers mention the research done among large and popular P2P networks, disregarding smaller networks altogether.  Research of smaller P2P networks could show research results as inconclusive or unstable. In other words if thorough research was conducted from not only popular and large scale file sharing networks, but also from smaller file sharing networks, researchers could conclude if file sharing is the ultimate factor in billions of dollars lost from plummeting record sales.

The RIAA’s desperate attempts to bring about justice for billions of dollars lost annually due to illegal downloading of copyrighted music seem to be having little to no affect. Meaning, the RIAA’s attempt to crack down on illegal downloading by shutting down major file sharing networks and individuals themselves is having little affects on online music piracy and P2P networks. File sharing networks and founders are constantly being sued and shut down, but new file sharing networks are constantly emerging, but stronger. For example, after the acclaimed Napster P2P network was shut down, another popular network Gnutella emerged. However it had no central server, like Napster, and because of this it made it more difficult for it to be shut down. Eventually Gnutella also shut down, however this shows that although file sharing networks shut down, many continue to still emerge, however programmers are making them faster, stronger, more efficient, and more difficult to detect, regardless of the RIAA efforts to limit there activities. (Hunnewell, 74-76) In addition, according to analyst Russ Crupnick of the consumer research group NPD, the number of illegal downloads has risen by %24 percent in 2004, since the RIAA began winning lawsuits against individuals in 2003. (Aksomitis, 52-53). Furthermore, in a survey study conducted in 2005 on online piracy, the study showed that out of 442 respondents, %96 of those respondents had admitted to have used a P2P application to share music. Also %48 percent of those respondents admitted to downloading over 100 songs within the past year. It was then estimated that within these correspondents alone between 14, 000 and 18, 000 had been downloaded using a file sharing network. (Fisk, 88-89)

P2P file sharing networks which allow for users to download copyrighted music for free online has little affects on album sales; however major record labels and the RIAA are claiming that they are, as they have done with all major turning points for music in the past. For instance, the music industry has been complaining and attempting to obliterate forms of media from the tape recorder, MTV, CD’s and MP3’s, claiming that things these would destroy the music industry. In the end it was things such as these that revolutionized the music industry and changed the way music was created, consumed, and listened to. File sharing is barely scratching the surface on the millions of dollars earned in the music industry by major record labels and distributors of music. It is possible to assert that the music industry and the RIAA are not concerned only with the fact that album sales are declining and that music artists music is being stolen, or that they are losing money. In fact the record labels and big corporate distributors are stealing millions from the artists themselves. For example, according to article ‘New Bands Signs to Major Record Label, Where does all the Money go?’ when a band signs to a major record label, %63 percent of revenues from album sales goes to the record labels, %24percent goes to distributors, while only %13 percent goes to the band, which then has to be split between the members of the bands including those who manage and promote their music.(Wilson) On average a music producer of a major record label can make anywhere between $20k to $1 Million yearly. It is understandable that the RIAA would begin suing individuals such as 12 year old Brianna Lahara, or 71 year old Durwood Pickle, because they do not want anything to interfere with their salaries. In an article from digital music news the RIAA defends their salaries as being reasonable, where executives make between $200,000 and $1.3 Million dollars a year. (Rresikoff) When music artists come into contract with these major record labels, even the artists themselves do not have legal rights to their own music, and the music industry knows this. So, file sharing is not having such tremendous negative effects on music artists, or their album sales, it is the way that file sharing is revolutionizing music consumption, and opening up opportunities for artists, that has the music industry apprehensive.

The major record labels within the music industry are more concerned that music artists will become less reliant on the labels, and use file sharing and online media in general, as a way to expose and promote themselves. Some artists have already begun adjusting to these new formats. For example, bands such as White Stripes and Match Box Twenty have already released their albums on USB drives. (Espejo, 7) Also, artists are beginning to put less money into albums, such as the band ‘Roots’ who released their latest album, however put less in the album art and production costs.  Moreover, many music artists have different opinions on file sharing, while some see it as theft, others including artists not signed to major record labels see it as a way of exposure.  For instance, artist M.I.A sees file sharing as a way to get exposure of her songs that would not normally get exposure such as on the radio. However artist such as Sean “P. Diddy” Combs says “Every single day were out here pouring our hearts and souls into making music for everyone to enjoy. What if you didn’t get paid for your job? Put yourself in our shoes.” (Aksomitis, 28-37) However, Artists are finding more ways through online music piracy for gaining more fan bases and expose their music to a larger audience which would be more expensive via traditional ways.  So it seems that the music industry is furious that illegal file sharing is opening up windows of opportunities for unsigned and indie artists, which in the future could diminish the need for record labels all together.

Despite the RIAA’s complaints that illegal file sharing is destroying the music industry, and that they are losing billions of dollars annually, music consumption is however on the rise. For instance, eMarketer assess that recorded music, live music, and music publishing will bypass $67 billion by 2011, in comparison to $62 Billion in 2007. However, much of this revenue will stream mostly from online and mobile music and live concerts. In addition, record labels are selling an estimated $2 Billion worth of online music and mobile phones in 2006 and the amount of available music online has doubled since 2006. (Espejo, 25)It is now time that the music industry embrace this new digital age, and begin changing their business models to fit the needs of consumers, and thus they can begin to recover from those billions lost annually. Although some may object that although more music is becoming more available and sold online, file sharing is posing as a new threat to online music business. For example, file sharing has caused there to be a devaluing of music overall, and if people feel that they don’t have to or want to pay for music, then they will not. However, file sharing may empower the music consumer. Meaning more music may be available through file sharing networks they may not be available or paid attention to in the public media. Through these file sharing networks consumers are exposed to these songs, which could result in more exposure to that artist, which then could lead the consumer to but the actual CD in stores. In the industry would begin to consider changing their business models to fit the expansion of online media, it could radicalized the music industry, as did the MTV and MP3.

Where the music industry will be in the future is a hard one to determine, however the outlook of the music industry on how it delivers music to it consumers will have changed. File sharing is having a tremendous affect on not only the music industry, or the RIAA but on the actual consumers of music, how we consume it, how we listen to it and most importantly how we think about it. It is evident that society has already begun a transformation about how they think about music, and how that paradigm affects behavior towards music. For example, of a study conducted in 2005 on online music piracy, %96 percent of 442 respondents admitted to knowing the basics of file sharing and admitted to using file sharing networks to share music. (Fisk) This survey had been conducted even after the RIAA began suing individuals for illegally downloading music. It is apparent that people are aware of file sharing, and possibly that it is illegal however continue to use P2P networks to download music. It is a paradigm such as this that will not only change the behavior of the music consumers, but will trigger the music industry to change its behavior as well. Because record labels have become established and fixated, it is hard to determine if record labels will cease to exist in the future. However I do believe that the CD format is running its course, and within the next decade or so, CD format might become part of a vintage collection such as vinyl records. What is most significant to understand about the music industry, and the future of it, is that it all relies on the consumers.

In the beginning stages of my research I came with the attitude that illegal file sharing was having a tremendous affect on music artists and album sales. However, as my research progressed and I began to understand the research in this area was quite new, and I saw how new research has been showing file sharing has little affect on the music industry my perspective began to change. My perspective changed also when I saw how the music industry has become anxious to the point that they have begun suing individuals themselves. However research is showing that file sharing is not affecting the industry as much as they say and I got me thinking why the industry is making these accusations. Were there any hidden data, or agendas in the music industry? What also grasped my attention was how artists would say that it was beneficial to them, and that they seen as a way to get more exposure. Nearing the end of my research I decided focus the attention of my paper to my suspicions and curiosities.  Overall my outlook on piracy is changed I look at it personally as being morally wrong and have made attempts of not downloading artists music illegally, although I occasionally just listen to the songs via YouTube or MySpace. I decided for myself to begin a habit of buying artists albums to show my support and love of their work, because I know that I would want someone else to do the same for me.

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