Recent events in Iran support this statement—through Twitter and YouTube, Iranians exposed the violence and the government's suppression of protesters. What was the Iranian regime's first act? Trying to bar access to the Internet, as they understood its ability to reach the world in seconds. Of course, freedom of expression differs somewhat from the right to download files. But denying access to sites smacks of censorship, which undermines the Internet's purpose of freely distributing information.
An equally important question remains—how did Internet file sharing boom in popularity? Consumer rebellion against high CD prices is a major factor. The average CD can cost up to $16; according to a 2004 analysis (cited in Rolling Stone) by the independent research firm Almighty Institute of Music Retail, the money breakdown for a $15.99 CD is the following:
$0.17 Musicians' unions
$0.80 Packaging/manufacturing
$0.82 Publishing royalties
$0.80 Retail profit
$0.90 Distribution
$1.60 Artists' royalties
$1.70 Label profit
$2.40 Marketing/promotion
$2.91 Label overhead
$3.89 Retail overhead
Note that, contrary to public opinion, the artist does not receive the bulk of a CD’s proceeds. The majority goes to the middle man, or retailer. Thus, in the current price scheme, the customer and even the artist can lose money. iTunes used to sell all singles for 99¢, but in April 2009 prices rose to a three-tiered system: 69¢, 99¢, or $1.29. This move appeased music labels who complained about having no control over pricing standards. Due to this new policy, more albums, such as Green Day’s 21st Century Breakdown, retail at $14.99 on the online music store. Angry at ever-rising costs, consumers have turned to torrent sharing sites, in part, to protest these ever-rising prices.
As mentioned earlier, fast-moving technology such as faster Internet connections and CD burners have brought a seemingly new set of problems to the recording industry. In reality, music piracy has been a concern since the 70s, reaching paranoid heights in the 80s with high-bias, low-noise blank tapes readily available. As Hank Stuever wrote in his 2002 Washington Post article “In the Digital Age, the Quaint Cassette Is Sent Reeling into History’s Dustbin,” blank cassettes were supposed to ruin the record industry, the way almost every technological shift is, at first, supposed to ruin the record industry.” Obviously this dire prediction never was realized, which may also be true for peer-to-peer file sharing. In a 2009 Norwegian study, 2,000 online music users 15 and older were surveyed on whether they purchased music that they had initially downloaded for free. The results: these users were 10 times more likely to pay for music, making so-called pirate sites a large resource for digital sales. While the study draws from an admittedly small sample, it shows some evidence that torrent-sharing sites may not necessarily destroy the music industry, just as blank cassettes failed to do so.
Article comments
1 - Robert M. Barga
The thing is, as the big players disappear, people are going to run out of areas to go
2 - Al Sussman
I'm old enough to remember all the examples of old media paranoia. TV was going to kill radio and heavily damage attendance for movies and theatre. Then, VCRs were going to completely kill movie attendance. Cassette dubbing decks were going to kill the record business. Same with CD recorders and, later, computer CD burning software. And remember the Mini-Disc? None of the dire predictions came true so, while I know less about bit torrent sharing than I know about video games (which is next to nothing), I suspect that won't destroy an industry already rotting from within, much like those now-unplayable CD-Rs a lot of us recorded a decade or less ago.
3 - Robert M. Barga
50 billion a year indicates real harm
4 - Blackskunk
If music wasn't such a rip-off, then people wouldn't use P2P so much. £2.50 is a reasonable price to pay for a CD... no more. If you rip people off, they will rip you off!
What goes around , comes around. Fact.
If CD's are really worth what they sell for initially, up to £15.00. Then how come stores can sell the same CD for £4.00 years later and presumably still make a profit.
Also, when the rich are getting richer and the poor are getting poorer, fact, and music continues to become more popular, people can't afford to pay £15.00 every time they want a new album.
Music industry, the ball is in your court!
Stop ripping us off!
5 - Brian aka Guppusmaximus
50 Billion could be lost for a lot of reasons as there is no evidence that "file-sharing" is the only cause.
The music industry have been hurting themselves financially for a while now by pandering to the popular formula & overcharging the consumer for an inferior product. But, no one gets to sue the music industry for ruining technology,do they? It's a well known fact(and as the article has shown) that artists thrive from concert & merchandise revenue and,even, quite a bit from "word of mouth". The RIAA is only masquerading their frontal assault with the motive of artist concern so they can protect their assets because they are desperate & are having a hard time justifying their existence. I'm not for taking away anybodies' livelihood,BUT,just like newspapers, the music industry didn't invest in their future & are now paying the price. Unfortunately, under this deceit they are destroying the future for this great tool, the internet. If people are always just going to be concerned about monetary gain as opposed to what benefits a culture & progresses technology then we will always be on the losing end.
6 - Kit O'Toole
Thanks for all your comments--this will continue to be a controversial issue, and as some of you have pointed out, the music industry needs to deal with it in a reasonable manner.
7 - Ruvy
A cousin of mine owns his own label. He is a musician, a musician's musician even, and is thorougly aware that you can't rip off the public without expecting them to rip you off. What comes around goes around indeed.
The issues in my mind are fair compensation for the artist, and reasonable prices for the consumer. All the rest can be worked out without burdeneing the consumer too greatly. The key is for the musician and the label owners (preferably indepoendent artists themselves, like my cousin) to be fully aware of technology as it comes down the pike, and before it comes off the exit ramp. The key, as always, is to cut out the middleman as much as possible.
8 - Kit O'Toole
Very true, Ruvy--cutting out the middleman does seem to be the key. Thanks for your comments!