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Effects of piracy in the music industry
Effects of piracy in the music industry
Effects of piracy in the music industry
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Music piracy is a developing problem that it affects the music industry in many different ways including being responsible for the unemployment of 750,000 workers, as well as a loss of $2,5 billion; therefore, I want to explore ‘To what extent has music piracy affected the music industry market in the United States over the last 10 years?’ To discover what is the real effect of music piracy I will first look at how the industry works and the amount of revenue lost due to piracy. It reseachres the effect of the loss of revenue in the United States economy. Finally It looks a other perspectives who argue that music industry does not affect the market. From the information I gathered, I was able to get a better understanding of the effect of the music piracy. From the results I was able to find out that music piracy does affect the music market by lowering the employment rate of the country as well as the total revenue received by the music market; however, the market has found other ways to protect their market like creating digital sales, which has worked as a way to increase revenue in the last 2 years. 1. Introduction: The music industry started in the mid 18th century with Wolfgang Amadeus Mozart. Through the decades there has been a great increase in this industry; however, the revenues for this industry have declined by half in the last 10 years. This has been caused by music piracy, which “is the copying and distributing of copies of a piece of music for which the composer, recording artist, or copyright-holding record company did not give consent” . After 1980’s, when the Internet was released to public, people started to develop programs and websites in which they could share music, videos, and information with... ... middle of paper ... ...n the companies will have to decrease the price otherwise the product will not be sold at higher prices and the revenue would not be as large as companies would like to. The industry basically works by selling and buying; however, if the sales decrease there is a huge impact in the economic growth of the firms. There are many factors, which can affect the growth of the firm. The factors that affect the firm do not have a great impact in their growth; nevertheless, a factor that has recently surged is the music piracy, and it has become a negative externality. A negative externality “occurs when a product or decision costs the society more than its private cost” . Music piracy makes the music market loose billions of dollars in the US and even though it doesn’t impact the economy on a big much it has a small impact such as the increase of unemployment per year.
We have all watched over the last year and a half as the controversy over the digital music provider Napster has clogged our television screens and lined our floors in the forms of newspaper articles. We are also well aware of the implications and revenue losses that the service either directly or indirectly causes. What I am going to investigate more in-depth in this article is, more specifically, the effect that Napster has on the operations of record stores worldwide. I am going to try to describe the most profound effects that Napster has on this industry.
The damage done to the music industry as well as genuine consumers of the music industry is huge. Online pirates are costing the music industry millions and millions of dollars in lost revenue. The chances of these pirates being caught are constantly increasing. Even though the anti-piracy organizations have made considerable progress, their current anti-piracy methods will not completely stop online piracy. Until these organizations can increase copyright protection, and inform the uneducated pirates who believe their points are valid, they will be fighting an up hill battle, no matter how many lawsuits they file.
While many suggest that music piracy is destroying the music industry, others claim that it is actually helping. On average, people who pirate music “legitimately purchase 30 percent more music than non-P2P (Peer to peer) users.” This is what Betsy Issacson claims (Issacson). Most of this music is copied from friends and families that bought it from a music store. In 18-29 year olds, this is where they get about 30% of their music from.
Recently, there has been a series of copyright infringement litigations against Internet businesses that are involved with unauthorized distribution of music files. The US recording industry claims to lose three million dollars per year because of piracy. A report predicted an estimated 16 percent of all US music sales, or 985 million dollars would be lost due to online piracy by 2002 (Foege, 2000; cited from McCourt & Burkart, 2003) Even though this claim has to be taken with caution, as it is based on false assumption that if copyright laws were strictly enforced, audio pirates would become buyers, it is apparent that audio piracy grew to a worrisome level for the record industry. (Gayer & Shy, 2003)
The music recording industry is in trouble. For several years now, sales of new and popular music have steadily declined and show no sign of changing. The record companies are quick to blame the growing popularity of the Internet; music is being traded in a digital form online, often anonymously, with the use of file-sharing programs such as Morpheus, KaZaA, and Imesh, to name a few. The RIAA (Recording Industry Association of America) succeeded in disbanding the pioneer Internet file-sharing program, Napster, but is facing confrontation with similar programs that are escaping American copyright laws. While there is an obvious connection between declining popular music sales and increasing file sharing, there is more going on than the RIAA wants to admit. I will show that the recording companies are overpricing their products, and not sufficiently using the Internet as an opportunity to market and sell their products. I shall begin by describing in greater detail the problem that the recording companies are facing, as well as the growing epidemic of online music trading. From there, I will show the correlation between the two and describe the other factors affecting record sales, and how these trends could be turned around to help the industry.
Since early in the 1990's, software publishers have been concerned about their losses from software piracy. The music recording industry now faces a much larger threat than the software industry. Its very existence is in question as music is extensively pirated through internet downloads and copying CD's. The total cost of pirating music is estimated at $12.5 billion annually, of which $5 billion is a direct cost to the recording industry. The recording industry has experienced dropping profits and has lowered employment because of the effects of music piracy (Blyth, 2008). Many argue that as a result of music piracy, the structure of the industry must change and the era of both big record labels and superstar bands is ending (Dvorak, 2003). Nevertheless, many people, especially college students, do not seem to regard music piracy as unethical. Understanding consumer attitudes may be an important step in developing a solution to the economic problem of music piracy. This study develops a model based on the Theory of Reasoned Action (Fishbein & Ajzen, 1975) to promote further understanding of attitudes toward music piracy and how those attitudes influence music piracy behavior.
Music piracy is the process of copying, or file sharing copyrighted materials illegally. Music theft hurts the artists that bring music to your ears due to the fact that they’re not receiving a decent amount of income because their songs are obviously getting stolen. A survey has identified that 70 percent of all 18 to 29 year olds have pirated music, TV shows, or movies. “Music has been compact and easy to reproduce since the days of sheet music. It is, moreover, intensely social: People want to share it with each other, whether by sending a YouTube URL in the 21st century, trading Grateful Dead tapes in the 20th, or copying sheet music for other singers in the church choir in the 19th” (Berlatsky). Another poll found that 46 percent of all Americans have engaged in piracy (Anderson). Back in the 1980s, music piracy was slightly spotted, when people created things called mixed tapes, however making these did not cost the industry much money. Cases of music piracy highly increased after the compact disc (CD) was created in 1982. One major case of music piracy was affiliated with the heavy metal band Metallica on April 13, 2000. Metallica filed a lawsuit against Napster due to many copyright infringements, and racketeering. The heavy metal band found $10 million worth of damages which is roughly $100,000 per downloaded song. NetPD evaluated Napster’s illegal program, and produced a list of 335,435 users that were downloading and sharing the band’s albums.
Though many people do think that music piracy is a bad thing, there are some pro arguments, which are very valid. Some say that artists don't feel affected by file sharing and support the fact that piracy creates a bigger fan base for them. Many unsigned artist have produced free records so copyright wasn't an issue. Which could be a new and upcoming thing for artist to d...
This had an effect on both the consumers and producers of music. What turned out to be a result of the matter was that the prices of music were climbing and consumers were not buying as much. They resorted...
...ng-term cost of hurting the artists they most admire, and new talent” (Aksomitis). In the United States, roughly 76.2 million songs were stolen off the internet illegally. This number grew by 89% in 2006 where 144 million songs were stolen. However, in Japan only 1.1 million songs were stolen. Apparently, music piracy is only an issue in the United States.
In this case, there are three main effects of Napster on the recording industry. The first one is that it caused a large decline in record sales in a short time. According to this case, the spending on recorded music in U.S dropped 4.1% in 2001 and the industry’s top 10 albums also sold much less compared to the year before. The second effect is that it cased the sales of CD burners, blank CDs and digital audio players increase and nowadays, most new computers come with CD-RW drives installed, which means people can easily store downloaded music, share music with friends and take it with them anytime as well. The third effect is that it increased the cost of recorded music. Once people can download free music through peer-to-peer software services, they have less incentive to buy original editions, which will make recording industry spend more to fight against copyrights and invest more in new artists and new music. Overall, these three effects make the recording industry go through a hard time.
The entertainment industry and many musicians regarded P2P as a big crisis for copyright, so that they sued the company that produced Napster. “Anger leads Metallica to the Internet,” an article by Karen Schubert in USA TODAY, noticed that heavy-metal band Metallica was suing Napster. And now some people in the music industry are fighting with a distributor of P2P software even in the Supreme Court, and lobbying to outlaw P2P technology. In “File sharing goes to High Court,” USA ...
The music industry impacts the lives of people from around the world. With the implementation of technology, the influence of the music industry has spread to affect anyone with access to technology. Streaming services have contributed to the increased popularity of music. While there are positive effects to being able to stream music and have multiple ways of listening to it, the music industry suffers from the lack of revenue and illegal activity associated with technology. Technology has had both positive and negative effects on the music industry by affecting how people access music and how music is produced
This paper aims to analyse problematic of illegal music downloading from the internet. Specifically than downloading, sharing audio, restrictions and government reactions against it. At the same time, I am trying to analyze the trends in music distribution and how did the industry react on it. Analysis of Record industry before the world wide web and after it. Reaction of artists and bands on the recent trends and how did the internet piracy helped to shape the legitimate music business of 20th century.
Raustiala, Kal. "How Much Do Music and Movie Piracy Really Hurt the U.S. Economy?" Freakonomics RSS. Freakonomics, 12 Jan. 2012. Web. 21 Jan. 2014.