File Sharing - A Threat to the Music Industry?
Kevon Campbell
August 16, 2005
“There's no minimizing the impact of illegal file-sharing. It robs songwriters and recording artists of their livelihoods, and it ultimately undermines the future of music itself, not to mention threatening the jobs of tens of thousands” (Cary Sherman, Recording Industry Association of America President, USA Today, 18 September 2003).
With the advent of Napster in 1999, file sharing has become one of the most common of online activities, with the software, music and movie industries being most affected by this. On the Kazaa Network, there are approximately three million users on at any given time. Surely this has to impact on the above industries, as this must mean at least three million less items being sold.
The music industry has recently gone into a slump. The Recording Industry Association of America (RIAA), continuously bemoans the fact that honest retailers of music are losing, along with the record companies themselves, and most importantly the musicians, songwriters and producers who would fail to receive royalty payments through file sharing.
In order to combat this menacing threat, the music industry has seemingly adopted the stance of “sue all these pirates”. After all, it is these mindless thieves who are causing the industry billions of dollars, and who are emptying the pockets of hardworking music industry personnel.
What exactly is the effect of file sharing on the music industry though? Research has been increasingly supportive of the view that file sharing has only minimal, if any negative effects on record sales, and may in fact be beneficial for the industry itself.
Research conducted by the Harvard University and the University of North Carolina professors adds credence to this notion, asserting that their findings are inconsistent with the claim that file sharing is the primary reason for a decline in music sales.
Another study conducted by Jupiter Research reports that about 34 percent of veteran file swappers say they are spending more on music than they did before they started downloading files. Of course, one may argue that on controversial issues such as this, persons may feel that telling the truth is not an option. However, one may also look at the fact that the software, videogame, and movie industries have grown tremendously, even though they are all also heavily downloaded.
Other factors may thus account for the fall-off in music sales. First, as Liebowitz (2003) notes, high levels of sales in the 1990s may just be a mere reflection of individuals replacing older formats with CDs. Of course, one cannot escape the suggestion of a poor economic climate as a basis of explanation for low record sales. Furthermore, one can find an explanation in the increasing growth of other forms of entertainment, in particular, DVDs, which have rapidly become a very affordable alternative.
Beneficial effects of file sharing for the music industry are generally presented in the vein that file sharing merely impacts on the consumption of the music, opening up the music to persons who otherwise would not be able to access it. After all, it may be argued that the majority of file-sharers would possibly not have bought the music anyway. Additionally, new ears may be brought to the music, increasing a fan base and concert sales.
One’s view on file sharing is inherent on how one is affected or perceives him or herself to be affected by it. Definitely though, increasing research tends to be pointing towards the belief that the negative effects of file sharing on the music industry is limited. The members of the music industry will no doubt refute such claims with research of their own, leaving one to attempt to analyse the credibility of the various researches. As some sociologists will note however, such research and the statistics presented can be seen as mere reflections of the interests of the researcher.
While, the economic impact is thus inconclusive, moral questions remain. Is this plain and simply theft, as industry insiders put it? Is this really tantamount to stealing a CD off the shelves? Copyright laws are valid whether online or offline, and it is clear that these are infringed upon through file sharing.
File sharing is spread across all countries of the world. The RIAA has proceeded with lawsuits against thousands of "pirates", but it seems largely unlikely that everyone who engages in file sharing will be brought before the courts. The music industry has been provided with increased leverage through a Supreme Court ruling in June 2005, which found that distributors of popular software for sharing of music and videos online can be held responsible for theft if they encourage or induce their users to illegally swap copyrighted works.
What the music industry needs to do though is to re-innovate itself and become adaptable to this new and changing environment. As Kaleb Kain of Warez.com states, the software industry has adapted, offering, “full demos and discounted upgrades”. The music industry needs to also be innovative, and find ways of offering the consumer more than can be available online.
With the advent of Napster in 1999, file sharing has become one of the most common of online activities, with the software, music and movie industries being most affected by this. On the Kazaa Network, there are approximately three million users on at any given time. Surely this has to impact on the above industries, as this must mean at least three million less items being sold.
The music industry has recently gone into a slump. The Recording Industry Association of America (RIAA), continuously bemoans the fact that honest retailers of music are losing, along with the record companies themselves, and most importantly the musicians, songwriters and producers who would fail to receive royalty payments through file sharing.
In order to combat this menacing threat, the music industry has seemingly adopted the stance of “sue all these pirates”. After all, it is these mindless thieves who are causing the industry billions of dollars, and who are emptying the pockets of hardworking music industry personnel.
What exactly is the effect of file sharing on the music industry though? Research has been increasingly supportive of the view that file sharing has only minimal, if any negative effects on record sales, and may in fact be beneficial for the industry itself.
Research conducted by the Harvard University and the University of North Carolina professors adds credence to this notion, asserting that their findings are inconsistent with the claim that file sharing is the primary reason for a decline in music sales.
Another study conducted by Jupiter Research reports that about 34 percent of veteran file swappers say they are spending more on music than they did before they started downloading files. Of course, one may argue that on controversial issues such as this, persons may feel that telling the truth is not an option. However, one may also look at the fact that the software, videogame, and movie industries have grown tremendously, even though they are all also heavily downloaded.
Other factors may thus account for the fall-off in music sales. First, as Liebowitz (2003) notes, high levels of sales in the 1990s may just be a mere reflection of individuals replacing older formats with CDs. Of course, one cannot escape the suggestion of a poor economic climate as a basis of explanation for low record sales. Furthermore, one can find an explanation in the increasing growth of other forms of entertainment, in particular, DVDs, which have rapidly become a very affordable alternative.
Beneficial effects of file sharing for the music industry are generally presented in the vein that file sharing merely impacts on the consumption of the music, opening up the music to persons who otherwise would not be able to access it. After all, it may be argued that the majority of file-sharers would possibly not have bought the music anyway. Additionally, new ears may be brought to the music, increasing a fan base and concert sales.
One’s view on file sharing is inherent on how one is affected or perceives him or herself to be affected by it. Definitely though, increasing research tends to be pointing towards the belief that the negative effects of file sharing on the music industry is limited. The members of the music industry will no doubt refute such claims with research of their own, leaving one to attempt to analyse the credibility of the various researches. As some sociologists will note however, such research and the statistics presented can be seen as mere reflections of the interests of the researcher.
While, the economic impact is thus inconclusive, moral questions remain. Is this plain and simply theft, as industry insiders put it? Is this really tantamount to stealing a CD off the shelves? Copyright laws are valid whether online or offline, and it is clear that these are infringed upon through file sharing.
File sharing is spread across all countries of the world. The RIAA has proceeded with lawsuits against thousands of "pirates", but it seems largely unlikely that everyone who engages in file sharing will be brought before the courts. The music industry has been provided with increased leverage through a Supreme Court ruling in June 2005, which found that distributors of popular software for sharing of music and videos online can be held responsible for theft if they encourage or induce their users to illegally swap copyrighted works.
What the music industry needs to do though is to re-innovate itself and become adaptable to this new and changing environment. As Kaleb Kain of Warez.com states, the software industry has adapted, offering, “full demos and discounted upgrades”. The music industry needs to also be innovative, and find ways of offering the consumer more than can be available online.
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