Doing Nothing

By Jimmy Hoesan

Do nothing is also one alternative that government and artists should consider. Online piracy has caused decrease in music sales by an average of 7% per year (Sinha & Mandel, 2008). This is happened to well-known artists. On the other hand, online piracy could have a strong network effects which benefits new-come artists. Some customers who pirate would have bought the music album. The result of this network effects can significantly increase the market size, therefore the customers who download music for free can benefit the artists by increasing the size of potential market (Jain, 2008). Artists could easily get famous because online piracy. Even though later on the artists’ music royalty would be decreased, online piracy was helping them to be well-known in the music industry. By doing nothing, both sides benefit each other.

IFPI said that fighting piracy should be a government job and might be very costly. According to one study, fighting piracy infringers may cost as much as £365 million (approximately US$ 596 million) per year and it will be a top problem (Anderson, 2009).

Adopting a Music Tax Approach

By Chao-Hsuan Wu

We are living in a free download era. Although record companies loss money from CD sales, they can earn money from concerts or diverse merchandises. Record music has become a tool to get people pay for concerts or related products. However, record companies still need find ways to guarantee their revenues. In fact, there is no ways that can totally prohibit illegal download and ensure revenue to music industry. In fact, research pointed out that a choice between downloading a new album for free and paying 5 dollars, only 18.3 percent, or less, chose to pay the 5 dollar. (Arrington, 2008).

Music tax may be an effective way to create guaranteed revenue. If people can pay few dollars, they can download all music and put it into their iPod, Mp3 and their cars. The Songwriters Association of Canada called for a mandatory 5 dollar per month ISP music tax before. Although the idea just began, it may be the solution to solve deficits problems. (Arrington, 2008).

However, some people doubts that the music tax will kill music innovation. Because everyone is asked to pay music tax, less competition in music industry will lead to remove creative innovation. Composers will not be reluctant to pay more time and cost to make good music due to ensured revenue. Besides, if music tax can help music industry get stable revenue, other people could get into the industry to share the market. In the end, music industry still has to collapse or crash. (Arrington, 2008).

Assigning a Dedicated Government Agency

One of the main issues with enforcement of digital copyright laws is the lack of a dedicated agency to deal with the issue. Currently, multiple agencies are roughly defined to deal with music piracy, namely ICE, the Patent Trade Office (PTO), the Federal Bureau of Investigation (FBI), and the Department of Commerce.

A specific organization should be created to deal with the problem. The organization could be called the Intellectual Property Enforcement Agency (IPEA) and its only task would be the prosecution of people who are downloading or sharing music. Additionally, the agency could also focus on the education of the general public as to the country’s music copyright laws and penalties.

This solution’s main advantage would be a focused and dedicated approach to enforcement of copyright laws. The organization would also not be affected by shifts in resources suffered by the FBI and ICE. The conflict in resources usually causes these agencies to have inconsistent results when prosecuting and investigating file sharing. The IPEA could also be able to train more technical staff to deal with a crime that is less likely to  require the normal resources of the day-to-day field operations of the FBI or ICE. Another advantage would be the ability of the IPEA to target both sharers and more importantly downloaders because of superior technology and focus. One other incentive for the government to increase enforcement would be the increase in tax revenue. According to RIAA, “a loss of $422 million in tax revenues, $291 million in personal income tax and $131 million in lost corporate income and production taxes” ( RIAA, 2010).

The main disadvantage is that the creation of one more government agency adds more overhead to the government as a whole. Additionally, funding of the new agency would be difficult to swallow given the current economic climate. American tax payers may be more inclined to let the RIAA fund its own lawsuits rather than involve the U.S. government any more than the government already does. This method also largely ignores the international factor involves in music piracy and the lack of jurisdiction and enforcement in those countries.

ISPs and the Online Pirates

By Jimmy Hoesan

A. Defining Online Music Piracy

So, what is online music piracy? According to Recording Industry Association of America (RIAA), if someone makes unauthorized copies of copyrighted music recordings by online, it would be considered as online music piracy. Nowadays, digital information can be downloaded easily, and they seem to be as free as air. However, the United States copyright law has clearly stated that it is prohibited to download or upload copyrighted music without permission (RIAA, 2011).

It is not really clear when people started downloading music. But downloading music was become famous in 1998 after a software called Napster was released. Napster was a software that allow people around the world to share each other’s music files. Napster was sued by RIAA in 1999 for facilitating music pirating. Then because of so many litigation cases, Napster changed the software from music file-sharing to an Internet music subscription service that sell legitimate online music (Funding Universe, 2011).

After Napster, a lot of software and website are created that provide free music downloading, such as Pirate Bay, Limewire, 4share, etc. People find it really easy to download and get music for free, which lead to uncontrollable online music piracy.

B. Internet Service Providers (ISPs)

Almost everyone now uses internet. To use the internet, people need to open an account or subscribe to Internet Service Providers (ISPs).

Basically, ISP is a company that supplies Internet connectivity to home and business customers (Mitchell, 2011). However, some ISPs also provide different service to their customers. Verizon and AT&T only sell service for Internet connectivity to public, later on this ISP type will be mentioned as ISP1. Other ISPs, such as Iweb and Amhosting provide service to set and full manage a computer server for customer, later on this ISP type will be mentioned as ISP2. Computer server is a computer that is used to create a website for company, business, or personal use. Computer server can also be used for database, game server, etc. There are also ISPs that only rent the server to public without manage the server, so the responsibility to manage the server belongs to customer. From this point, this type of ISP will be mentioned as ISP3.

Online music piracy all started from these three types of ISPs. To create a website, people need a server and Internet connectivity to make the website be up and running. People with lack knowledge to manage a server would rent a server from ISP2, but someone with a good information technology skill would rent a server from ISP3.

Right now, all these ISPs are currently working together with the government to prevent and decrease online music piracy. For example, India government has commanded India’s ISP1 to block Pirate Bay to be accessed in India (TechZilo, 2011). In The United States, government has asked ISP2 and ISP3 to shut down several servers, such as Limewire, Movies-Links.tv, Rmx4u.

To completely prevent online music piracy, ISP2 and ISP3 could prohibit customers to rent servers for opening piracy sites. However, it is really difficult to track and check what customers use the server for, especially for ISP3 that only rent out the servers without managing them. Prohibiting customers to rent servers for opening piracy sites would also cut ISP’s source of income.

Additional sources: http://www.unifiedmanufacturing.com/blog/one-year-no-internet-connection-for-illegal-file-sharers/

Methodology

The file-sharing sites are taking advantages of peer-to-peer transferring data technique. Hence, this report will examine these sites to see what their deals are and what they are offering. One major focus will be The Pirate Bay which is claimed to be “the world’s most resilient BitTorrent site.” Besides, the four major corporate labels of America,  namely Universal Music Group, Sony Music Entertainment, Warner Music Group, and EMI, once blamed the ISPs for their lack of involvement and corporation to deal with the piracy matter. Ultimately, Internet providers are the one that has the ability to recognize and to have control over pirating activities. Therefore, this report will also examine their roles to see what the stakes are. Finally, this report will refer to copyright laws in various countries to see what have they done to deal with the music piracy. Even though this matter has a global impact, some countries seem to adopt more efficient policies than others. The involvement of multiple stakeholders including Internet uses, ISPs, and legislators might help to settle this unresolved problem. This report will use the Academic Search Premier database extensively to find supportive materials.

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