Introduction to Music Piracy Problem

Online piracy has caused a drop in digital and physical sales of the music industry in the United States (U.S.) because instead of buying legitimate song tracks, people download it for free. As a result, trade value of the U.S. music market decreased significantly by 10.7% in 2009 (Borthakur, Brandle, Cobo, Ferguson, & Paine, 2010). Regardless of the rising concerns of the artists, record label companies, and others seeking compensation in the music industry, the pirate community persists. In essence, file-sharing sites are a big part of the pirate community. They usually offer free peer-to-peer software programs which are powerful tools that illegal file-sharers use to transfer files such as music tracks, movies, games, and software. A few peer-to-peer sites were seized by the government in October, 2010. One example is limewire.com The others still openly operates and challenges American music companies and authorities. Many of them are owned and operate in different European countries where the U.S. authorities do not have jurisdiction.

Acknowledging the economic impact of music piracy to the recording industry is very important to measure the significance of the problem. During a six year period since 2004, the digital section of the music industry has expanded its net income by 1000% world-wide. On the other hand, in the same time frame, observers see a decline in the digital and physical sales of the global music market by 31% because of the digital pirates (RIAA, 2010). The Internet revolution clearly has a negative impact on the music industry. The emergence of digital distribution channels such as iTunes or Amazon music store in the U.S. and Spotify in Sweden did not compensate for the losses of the overall industry. Without the implementation of current copyright law regulating music downloading practices, newly invented techniques for peer-to-peer file transfers such as BitTorrent seem to benefit the pirates.

South Korea may be the first government that has been successful in protecting its domestic music market. In 2008, this country enacted a new policy called the three-strikes law. The provisions of this policy give Korean recording industry the right to require Internet service providers to mail notifications to their customers once these providers find irregular activities. The letters inform the violators that their Internet services might be cut if they continue to commit illegal sharing activities. The name three-strike law relates to the maximum number of warnings one receives before their Internet services are terminated. This approach seems working for Korea because their digital sales in 2009 went up to 27% after two previous flat years (Borthakur et al., 2010). However, more research needs to be done by legislators before similar law could be adopted in the U.S. The reason is that legislators do not want new provisions of the copyright law to violate American civil rights which support consumerism and user privacy.

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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.

Introduction

Online piracy has caused a drop in digital and physical sales of the music industry in America because instead of buying legitimate song tracks, people download it for free. As the result of this norm, trade value of the overall U.S. music market decreased significantly by 10.7% in 2009 (Borthakur et al., 2010). Regardless of the rising concerns of the artists, record label companies, and others seeking compensation in the music industry, the pirate community remains existent. In essence, file-sharing sites are a big part of the pirate community. They usually offer free peer-to-peer software which is power tools that illegal file-sharers use to transfer files such as music tracks, movies, games, and software. A few sites were seized by the government, for example limewire.com in October, 2010. The rest of them are still operating under the nose of American music companies and authorities. Furthermore, many of them are founded and operated in different European countries which law enforcement in America would not be able to reach.

Acknowledging the economic impact of music piracy to the recording industry is very important to measure the significance of the problem. From 2004 to 2010, the online music business has increased its revenues by 1000% world-wide. However, in the same period, global physical and digital music market has suffered a decline of around 31% due to online piracy. The Internet revolution clearly has a negative impact on the music industry. The emergence of digital distribution channels such as iTunes or Amazon music store in the United States and Spotify in Sweden (launched 2008) did not compensate the losses of the overall industry. Particularly in the first half of 2009, global music sales were down double-digit by 12% (physical and digital sales). Similar trends are expected until the end of the year (RIAA, 2010). Without the implementation of current copyright law regulating music downloading practices, newly invented techniques for peer-to peer file transfers such as BitTorrent seem to benefit the pirates.

South Korea may be the first government  to come up with an official policy to tighten copyright laws in 2009. They also enforce harsher punishment such as cutting the pirates’ Internet service. The new copyright laws allow media firms to demand that Internet service providers send warnings to music pirates. Ignoring  such warnings will result in Internet disconnection. The new law is usually referred to as “three strikes” law because of the number of warnings. This approach seems working for Korea because their digital sales in 2009 went up to 27% after two consecutive flat years since the law came into effect in 2008 (Borthakur et al., 2010). However, more research needs to be done by legislators before similar laws could be adopted in America. The reason is that legislators do not want new provisions of the copyright laws to violate American civil rights which support consumerism and Internet user privacy.

Thesis Statement and Memo Format

Date:

To:

From:

Subject:

A report of International Federation of the Phonographic Industry in 2010 shows that anti-piracy laws lift music sales (physical and digital combined) in one out of three top 20 markets world-wide.

Online piracy has caused a decrease in digital and physical sales of the music industry in America because instead of buying legitimate song tracks, people download it for free. To many people in the States, it is consumers’ right to freely access any materials available online including music. Others consider music sharing without its creators’ consent illegal. Regardless of the rising concerns of the artists, record label companies and others seeking compensation in the music industry, illegal file-sharing sites remain existent. On the other side, supporters of freely downloading music claim that making music readily available contributes to the increased popularity of the artists. Music listeners will eventually buy the copyrighted sound tracks if they really want to own it. The involvement of multiple stakeholders including Internet Service Providers (ISPs) and legislators might help to settle the unresolved debate.

Memo format sample is suggested following this link:

http://owl.english.purdue.edu/owl/resource/590/4/

More information for memo format at Purdue Online Writing Lab (Purdue OWL) at the following site:

http://owl.english.purdue.edu/owl/resource/590/03/

Purdue OWL

Internet User Awareness Aspect

Digital development essentially enabled Internet users to get their favorite music online for free. Buyers certainly love the free idea and nobody questions the concept of free music on the Internet. One survey indicates that 67% of Internet users who download music do not care about copyright laws (Stefannie, 2003). But attitudes have changed since people realize this free concept causes damages to the music industry, specifically to people seeking compensation in this industry. Comparing the Internet access revenues (fixed line and mobile) and music industry revenues earlier in the decade, the Internet business quadrupled from 2004 to 2009 to $266 billion. Meanwhile, music sales decrease in the same period from $25 billion to $16 billion (McGuinness, 2010). Free content clearly profits of the technology and telecoms industry but hampers the music business.

In 2004, the RIAA started a 5-year lawsuit campaign against individuals as a response to illegal downloading by Internet users. The movement spent over $64 million and brought in about $1.4 million in settlement money (Techdirt, 2010). Some violators are fined up to $3,000 because of their illegal file-sharing activities. It is hard to conclude whether this strategic movement was successful even though major record labels fully supported them at a time. The media suggested that RIAA should find other supportive alternatives rather than directly attack online pirates who are also music lovers. Filing lawsuits against thousands of individuals is clearly unfeasible and uneconomical. Regardless, the movement attracted media attention and awoke Internet users’ awareness toward online piracy issue.

It is human nature that people want free stuffs. It is also consumer perception that once Internet users paid for ISPs, they bought the right to use any information available on the Internet, not excluding music, movies or other entertainment products. It is hard to change people’s mind unless companies have a strong incentive to do so. Imagine  day there was no illegal movie up-loaders, there would be no movie down-loader consequently. Until that day, entertainment industry has to find a way to deal with illegal file-sharing.

Source: http://www.mipi.com.au/Home.html

Raise user awareness

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