Internet Piracy and the Music Industries Business Model - Research Project

Piracy has become a major issue in the United States. For every motion picture that has been featured in theaters also has been pirated onto the Internet the next day, and for every new musical album that is released, yet there is a free torrent file of the album within the same hour. Even though these online pirates steal music and movies from other companies and make a drastic profit, yet these “rogue” websites receive 53 billions visits a year from across the globe according to Creative America. The persistence of the thieves that break copyright laws of the productions has lead the entertainment business to place a definitive complaint to the U.S. government of the constant notion of piracy. While the notion of piracy was not left

The Institute for Policy Innovation concludes that global music piracy causes $12.5 billion of economic losses

Online piracy doesn’t only necessarily harm the music industry but harms other industries that are available in an economy, such as the movie industry. For instance, in the years of 2009 and 2010, a research study showed an estimate of 12,600 jobs and $1.8 billion were lost throughout the entire Canadian economy due to the piracy of movies let alone piracy of other content (source). The physical recorded music worldwide was exceling in the 1990’s, having profits as high as $37 billion in 1999 however that number significantly drops to $25 billion by 2007. Several organizations agreed that the drastic decrease in revenue not solely in Canada but worldwide, is due to online piracy. It has caused songwriters lose their jobs and staying without works and is demotivating new artists into the industry since it is a much harder process now to get signed into the business now. Furthermore, the technological change that keep occurring has reduced how effective the degree of protection that copyright laws have ever since

3-4). While these statistics provide a look into the numerical growth of the streaming industry, it is also important to discuss the power that these streaming services have generated—over both the music industry and over established/aspiring artists. Subscriptions are on the rise, having increased significantly over the past ten years, but as is the amount of users streaming music on a free-trial or ad-supported basis—ultimately undercutting the music industry and artists alike. Blewett and Gollogly (2017) elaborate on this point, stating that, by the end of 2016, paid music streaming subscriptions drove a revenue growth of 60.4%—this growth more than offsetting a “20.5% decline in downloads” and a “7.6% decline in physical revenue” (Blewett & Gollogly, 2017, para. 4). Moreover, Borja and Dieringer (2016) explore the concept of streaming even further in their academic article, positing that the decline in paid digital downloads may be a direct result of streaming—as, music streaming can be perceived as a “complement” for music piracy, in which listeners can freely sample music to pirate later on (Borja & Dieringer, 2016, p. 1). The authors also suggest that streaming can provide a “venue for discovering and listening to new releases”; and after completing their 1052 surveys, conclude that streaming increased the likelihood of piracy by

There are $12.5 billion in economic losses each year due to Piracy in the music industry. This shows how people are not taking piracy seriously and treating it not as a crime. Piracy is a crime and people should be able to use it against people in their cases. Based on the evidence in this article, companies involved in legal action should use emotionally charged language such as "piracy" to win their cases because if they seem to be copying an artist's piece without permission and selling it for free, it is piracy and piracy is a crime that they can use.

In the recent year, illegal downloads have been dominating the music industry not only in the UK but worldwide. In 2015, numbers showed that a massive 62% of people in the UK either illegally download or steam music online, this affect artist’s income when it comes to illegally downloading music as when they see how much money they have made it will be plummeting each month. Throughout the UK many people were surveyed and results showed that, 26% of the people surveyed downloaded music illegally online. In the USA, The Recording Industry Association of America (also known as RIAA) reported that music sales have dropped massive 42% ever since illegal download was invented. This can affect the music industry in many ways some may be that if illegal downloads keep rising it will make sales lower and potentially make it harder for artists getting worldwide recognition and will make it harder for new upcoming artist to get signed by record labels. Spotify, the world largest streaming service, could be affected by people illegally downloading music as Spotify will end up losing money which will be used to pay artist royalties but won’t be able

The question then became “Just because we can get the music we want without paying for it, should we?” (Tyson, 2000, p.1). This issue of illegal downloads, which is also referred to as piracy, has been a hot topic ever since the introduction of Napster. According to Recording Industry Association of America “In the decade since peer-to-peer (p2p) file-sharing site Napster emerged in 1999, music sales in the U.S. have dropped 47 percent, from $14.6 billion to $7.7 billion” (RIAA, 2014).

A thief can be defined in many different ways. The American Heritage Dictionary of the English Language states a thief is one whom commits theft. So one might ask, what exactly is theft? Theft is defined as ‘the felonious taking and removing of personal property with intent to deprive the rightful owner of it (The American Heritage Dictionary of the English Language).” Now most people who participate in music piracy do not consider themselves thieves. The definition of a theft is flawed in many ways. Most of the time people do not contain on factor of being a thief, this factor is depriving the rightful owner of the property stolen.

We all know that downloading pirated music and films is illegal, but what exactly is it? The term piracy refers to the copying and selling of music, films and other media illegally; in other words you are copying and selling copyrighted media without the permission of the original owner (NiDirect, n.d.). With the massive growth of the internet and its ability to store and capture vast amounts of data, we have become much more reliable on information systems in all aspects of life, but it does not come without the risk of information technology being used unethically. With the number of IT breakthroughs in recent years “the importance of ethics and human values has been underemphasised” often resulting in various consequences. Not surprisingly one of the many public concerns about the ethical use of IT is that “millions of people have downloaded music and movies at no charge and in apparent violation of copyright laws at tremendous expense to the owners of those copyrights” (Reynolds, Ethics in Information Technology, 2015). This essay covers the ethical issues of downloading pirated music and films and the impact it has on music corporations and recording and film companies.

“Before the days of YouTube and the Internet, a band 's chances of striking it big depended on record companies. If a band was lucky enough to get a record deal, it gained access to a label 's vast resources and connections. The company paid for the band 's studio time, … and got its music played on the radio, reaching millions of record buying Americans” (Majerol, 1). Now, anyone with talent can post a video of themselves and become an internet sensation, only to then receive a deal with a label to continue growing their career. The issue is, with the Internet came digital downloading, and with the growing popularity of digital downloading came illegal downloading, known as Digital Piracy, which has affected the music industry greatly. This issue affects everyone involved in the Music Industry. From the small CD store owner to the Artist on stage, everyone has and continues to be affected by the growing popularity of digital downloading services. Artists, producers, and songwriters lose an estimated 12.5 Billion USD every year to illegal digital music services. Further, the economic impact from [digital downloading] is an estimated loss of 2+ Billion USD (Storrs, 1). This money affects the “little guys” in the industry and the average worker within the industry.

Introduction: Setting the trend for the future, the distribution and consumption of recorded music transformed dramatically with the launching of Apple’s iTunes in 2001. The proliferation of online music subscription services and other music sharing services exerted a great pressure on the conventional music distribution business model. Combined with this transformation, piracy of digital music had a profound impact on the whole industry. These worsening conditions in the market place for recorded music forced both established and upcoming new artists to experiment with new ways of selling their music.

Producers of musical content cannot undo the adverse effects that piracy has had on the industry. Because of the internet and the way individuals have manipulated it to obtain music, many people are unwilling to change their habits. Here lies the issue between the producer and the consumer. Acts like the Stop Online Piracy Act (SOPA) and PROTECT Intellectual Property Act (PIPA) work against the incentive of many consumers by telling them that they cannot do what maximizes their utility. Producers are thus working against the likings of the consumer. This is wrong.

In the midst of the United States’ “dot com bubble” (years 1997-2000), there was a surge in technology that brought about file sharing and digital downloads. Threatening the survival of the music industry and introducing a unique set of challenges for the industry to overcome. To remain relevant in the new global market of digital music online, the music industry would have to evolve and change with the introduction of each new facet technology had to offer. The introduction of digitally compressed music files, so easily attainable for a small fee or downloaded legally (pirated) for free, made the music industry reevaluate how to make a profit and protect copyrights. Social media created a visible opportunity for both consumers and artists to maintain digital relationships while providing a platform for consumers to follow and discover new musicians and bands, naturally, making the internet a promotional medium for artists. As the corner record shops closed to make way for virtual storefronts and instant downloads; the internet, digital downloading, and social media made an enormous impact on the music industry that has changed the way consumers purchase, source, listen to, and produce music today.

While a portion of people may argue that downloading music illegally is used so that one can transfer music to other devices to generate profit, an abounding amount of people realize that downloading music is actually used to transfer music to other devices to avoid paying for additional products (i.e. records, cassette tapes, CDs, etc.). Numerous people claim that people buy CDs just to burn them onto another blank CD to gain a profit. Journalist Stephen Siegel suggests that mp3’s shared through the internet can be used by one who will eventually burn these mp3’s onto a disk and start selling their CDs; this idea is mainly supported by a report from the FBI, stating that “Piracy of copyrighted and trademarked items cost the U.S. economy tax revenue and jobs due to the manufacture, distribution and sale of counterfeit goods” (Gallagher). This provides information that shows that the U.S’s struggles with distributing jobs because of the theft of trademark products. This can ultimately lead to a ruined economy by having the U.S become incapable of giving out jobs, considering the fact that the government takes a portion of income from the employee’s pocket to contribute to taxes. Yet, companies adopt certain tactics to gain extra money than they actually need to by making their customers feel identical to thieves (specifically those ripping mp3’s) when these customers listen to music on other devices without having to pay for extra (and unnecessary)

Companies like Apple, have decided that it is best to get in with the downloading business. However, an end to the illegal downloading conflict remains to be realized. The RIAA and associated artists continue to wage war against illegal downloaders while computer savvy audiences persist in sharing music files online every day. While it is undoubtedly true that downloading music is a crime, it remains to be proven that it is wrong. Without establishing this principle, most downloader's are likely to continue the activity. Even with new, inexpensive and available means of downloading files, they can still be shared for free online. The rift must be repaired between music lovers who feel that they have been taken advantage of in the past and recording companies and artists who worry about their future livelihood.