(A bit of a format departure for the site, below is an academic type paper for your viewing pleasure. Let us know what you think.)
By Will Bryant
It is a phenomenal time to be a music fan. There are millions of bands to sample, hundreds of thousands of concerts on a given night and devices the size of a credit card to keep a collection of favorite tunes while you’re on the go. Consumers have more choice than ever before, all thanks to developments in digital technology. Music fans are no longer limited to what the radio stations play or what their local music store sells; they can jump online and have access to a virtually limitless pool of new music. It is a shame that all of this freedom is coming at the price of the music industry.
The RIAA (Recording Industry Association of America) is doing a phenomenal job promoting its recent campaign: piracy equals stealing. They subpoena targets ranging from soccer moms to college kids – anything to get the media abuzz about the injustice of downloading music illegally. In their mind, “The record company incurs the recording costs, while the pirates…steal the profits…artists lose out on royalties, music publishers lose out on mechanical license fees and union members lose payments to the trust funds” (Krasilovsky p70). During the past decade, the RIAA has spent millions upon millions of dollars combating music piracy because, evidently, the technology is causing them to bleed money: “In 2001 the record industry worldwide lost about $4 billion due to piracy, including on-line piracy via peer-to-peer transfers or by other means” (Krasilovsky 70). Those are staggering numbers. Also staggering is the average $6,100 penalty per song the RIAA imposes on “pirates” to deter others from procuring music through non-traditional means. Only a small portion of these fees goes to the artists; the majority is used to support the RIAA and the label’s efforts to curtail piracy. Jammie Thomas-Rasset, a natural resources coordinator and mother of four from Brainerd, Minnesota, became a household name in 2009 when she was ordered to pay $1.92 million dollars for her 24 illegally downloaded tracks (Sandoval). The amount was reduced to $54,000 but it is amazing to think of the money she could have saved if she had purchased the tracks through a sanctioned channel.
“The battle for paying digital customers may have been lost before it had truly begun” (Goldman). Simply stated, the record industry was slow to adapt to the world of digital recordings. The file-sharing site Napster hit its peak in 1999 – around the same time CDs shot up exponentially in price. Instead of embracing the technology as a way of strengthening consumers’ affinity for music, the labels hiked prices even higher. Music piracy was given another shot in the arm with the technological breakthrough of the portable MP3 player. Suddenly the need for a CD player was gone altogether – simply download a few tracks and take them anywhere. But there is a disconnect between the MP3 players and the cost to fill them with music. Rob Sheridan, a record-industry insider best known for his art direction with the band Nine Inch Nails, explains:
“iPods have become synonymous with music – and if I filled my shiny new 160gb iPod up legally, buying each track online at the 99 cents price that the industry has determined, it would cost me about $32,226. How does that make sense? It's the ugly truth the record industry wants to ignore…the idea of music being something you collect in large volumes, and trade freely with your friends.”
And that is exactly what is happening within the labels themselves. Music fans working within the company are exchanging the files with their friends, therefore leaking the material to the outside world. In essence, the labels are to blame for the music’s existence on the Internet. Sheridan continues:
“The RIAA loves to complain about music pirates leaking albums onto the Internet before they’re released in stores.... But you know where music leaks from? From the…source…the labels! Most bands know that once their finished album is sent off to the label, the risk of it turning up online begins, because the labels are full of low-level workers who happen to be music fans who can’t wait to share the band’s new album with their friends…and before long, it turns up online. Why? Because people love music, and they can’t wait to hear their favorite band’s new album! It’s not about profit, and it’s not about maliciousness.”
More often than not, music is being shared with others for the joy of sharing a new artist with others. Many see it as an extension of the artist sharing their material with their fans.
Both sides agree piracy is a byproduct of technological advancements designed to enable rapid and robust information exchanges. The question is, why do people download music in the first place? For the past two years, I closely followed the case of Allan Ellis, owner and creator of OiNK’s Pink Palace, a BitTorrent tracker that operated from 2004 to 2007. The site was a phenomenal catalog of independent artists, live recordings and unreleased material from musicians from around the world. Though users were sometimes guilty of sharing mainstream music (i.e. a recent Wilco album), the site was primarily focused on exchanging files not available through traditional channels. Trent Reznor (of Nine Inch Nails) publicly admitted he frequented the site, calling it “the world’s greatest record store” (Westhoff). He went on to explain that the users are “not stealing because they’re going to make money off of [the recordings]; they’re stealing it because they love the band. I’m not saying that I think OiNK is morally correct, but I do know that it existed because it filled a void of what people want” (Westhoff). Interpol, the International Criminal Police Organization, shut down the site in 2007. Ellis was acquitted January of this year.
Is file-sharing morally “wrong?” Legally, “One is allowed to make a digital copy of a CD one owns and store it on one’s home computer, and also to give the file to a friend… Music file-sharing programs simply facilitate this…behavior on a much greater scale” (Callahan 187). As many Americans can attest, just because something is “legal” does not mean it is moral. Callahan continues, “Surveys show that less than 10 percent of music swappers think that piracy is wrong – even though 20 percent believe it hurts artists and not just the record company” (186). Pundits of file-sharing technologies often cite the music industry’s greed and lack of ability to adapt to the change as reasons for the rampant increase in music piracy. Also, fans would be hard-pressed to find fault in sharing music as it’s a form of praise for their favorite artists and potentially “converts” others who may become devotees and even legally purchase their music. In short, “The determination of fans to share music is much, much stronger than the determination of corporations to stop it” (Sheridan).
Is piracy single-handedly killing the music industry? Yes and no. It is true that record labels are bleeding money. They simply can no longer compete with illegally downloaded music and there is no way of keeping up their deterrents. Digital Rights Media (DRM) limitations and RIAA scare tactics, the most recent efforts by the majors, are doing little to curtail piracy. Since music sales represent the majority of labels revenues, it appears piracy is indeed bringing the major labels to their collective knees – the old model used for more than six decades is no longer relevant. Piracy is cutting off the means for their survival. If piracy did not exist, then (theoretically) record labels could continue their paths of artist exploitation. So, yes, piracy is a problem. That said, the labels are extremely slow to develop other means to support themselves; they are not adapting to technology. The major labels desperately need a new approach as Reznor explains, “[Record labels] seem to be doing everything they can to make sure that [their demise] happens as quickly as possible” (Westhoff). For the first time in their existence, they need to rethink their business model. Piracy is hurting them and they are doing very little to turn their situation around. That said, some are optimistic about the future, “The problem for the music industry may actually be its greatest opportunity. Despite the great decline in sales, the Internet has exposed consumers to more music than ever before. But that accessibility has been difficult to monetize” (Goldman).
Piracy is the great scapegoat of the major labels. They are spending more time crying foul than embracing the future of music. Does piracy translate to the end of the music industry? No. Artists are going to continue to record albums and play shows, fans will still support their favorite bands. We may not have as many pop sensations, but the music industry, as a whole, will continue to thrive. Music labels, on the other hand, need to adapt and adapt soon. The old model is no longer relevant.
Music sharing is an inevitable side effect of digital technology. I believe it can be leveraged to increase a band’s visibility and, in time, be monetized so both labels and artists can profit. Either way, there is no going back to the traditional record label model; artists and consumers simply have more control than ever before. The battle of piracy is likely to rage on for a number of years but the music industry is in no danger.
Associated Press, “Speaking of Music Piracy...,”Associated Press (linked viaWired), April 8, 2004, http://www.wired.com/entertainment/music/news/2004/04/62995
Callahan, David, The Cheating Culture: Why More Americans Are Doing Wrong to Get Ahead, United States: First Harvest, 2004
Goldman, David, “Music’s Lost Decade: Sales Cut in Half,” CNN Money, February 3, 2010, http://money.cnn.com/2010/02/02/news/companies/napster_music_industry/
Krasilovsky, William, Shemel, Sidney and Gross, John M., This Business of Music: The Definitive Guide to the Music Industry, New York: Watson-Guptill Publications, 2003
Sandoval, Greg, “Court orders Jammie Thomas to pay RIAA $1.92 million,” CNET, June 18, 2009, http://news.cnet.com/8301-1023_3-10268199-93.html
Sheridan, Rob, “When Pigs Fly: The Death of Oink, the Birth of Dissent, and a Brief History of Record Industry Suicide,” Demon Baby, October 27, 2009, http://www.demonbaby.com/blog/2007/10/when-pigs-fly-death-of-oink-birth-of.html
Westhoff, Ben, “Trent Reznor and Saul Williams Discuss Their New Collaboration, Mourn OiNK,” New York Magazine, appeared in print November 5, 2007, online October 30, 2007, http://nymag.com/daily/entertainment/2007/10/trent_reznor_and_saul_williams.html