An Important Issue in Music Marketing Today - Term Paper Example

Audio Piracy and the Distortion of the Music Market The statistics are astounding. According to various resources every month 3.6 billion songs are downloaded illegally resulting in an economic loss of $12.5 billion every year, a loss of $2.7 billion in workers earnings, and a tax revenue loss of $422 million, $291 million lost in personal income tax, a loss of 71,060 U.S. jobs and $131 million in lost corporate income and production taxes (“Piracy: Online and on the street”). These numbers are indeed staggering. They signify the slow but inevitable decline in the quality of the music in the music industry. These figures are not just to be read as dollars lost but as livelihoods being slowly but inexorably shattered. Audio piracy has manifested itself in more ways than one. The most popular of them being illegally copied or burnt CDs. They are most frequently circulated in the streets, school and college corridors. By the accounts of various articles, in the year 1991 it was estimated that one out of four CDs in the market was pirated. By 2001 the number of these pirated CDs had risen so much that the number of legal ones sold equaled the pirated ones burnt. The ratio has climbed still further since the increase in the number of individuals who own CD burners has nearly tripled since 1991. Unfortunately this brings two of the biggest industries at logger-heads with each other. On one hand the music industry is trying to defend itself by using anti-piracy technology. On the other the Information Technology industry with it’s increasingly user friendly software rips apart (no pun intended) many of their efforts. But it has to be said that the music industry has developed some ingenious ways to prevent copyright infringement. For example Sony has come out with its anti-piracy software called “key2audi” which prevents CDs from being played on personal computers and CD-ROMs. They also have released the next version of the software called “key2audio4PC” which allows the consumer to play on one PC only. Another big name in the music industry, BMG Entertainment also has developed its own self defense mechanism called “Cactus Data Shield” anti-piracy software which prevents songs from being formatted in the MP3 format. The Cactus goes one step beyond the other soft wares. While the others simply do not play the CDSs in CD-ROMs and the like, Cactus can potentially damage stand alone CD burners. Yet another technology called SafeAudio prevents copying from music CDs. The earlier versions of the software did not allow playing on CD-ROMs. Later versions, developed as a result of poor response from customers allowed CDs to be played in CD-ROMs and PCs. However any attempt at copying would be futile as it adds background noise to the play back thereby spoiling the copy completely (Hall). These major steps taken in a desperate attempt to combat piracy, unfortunately, cannot be considered successful as they almost always came at the expense of customer satisfaction. As mentioned before the music industry’s market is not the only one at stake here. The government of the United States is trying a balancing act between the Music and IT industries. In order to do that the government is attempting to pass a legislation that would make it mandatory for the IT manufacturers to produce products that will not permit unlawful copying of music on their products. The IT industry is understandably against the idea of itself being held responsible for copyright infringement issues. They say that it is not practically possible to implement such drastic measures once the music goes public. Also from their point of view, technology which makes it difficult to play a protected CD on more than one of their products will prove cumbersome to their consumers. As a worst case scenario, in the event of pirates finding a way around this latest road block, the Music industry will be left with an unholy number of pirated material and the IT industry with an equally high number of extremely disgruntled customers. (Hall) Keeping all of this in view it is essential that the market of one industry is not compromised at the expense of the other. A tentative measure in this direction is the Audio Home Recording Act passed in 1992. Under this act digital recording devices must include SCMS- Serial Copy Management Systems. This system allows a copy to be made from the original CD only i.e. a first generation copy. No copies can be made from the copied CDs. The glitch was that a user is allowed to make as many “first” copies as they want! The law makers back in ’92 also did not foresee the computers being potential recording devices and computers do not incorporate SCMS. This serves as a convenient back door. It is imperative that laws need to be amended to suit the technology of today; the outdated laws can in no way be the means by which this threat to the music industry can be addressed. The Pirated CDs are only one side of the story. The other menace is the illegal uploading and downloading of digital music on the internet. This practice is most observed in school and college campuses. The RIAA- Recording Industry Association of America has named top 25 piracy Universities in the country. This list has been made on the basis of the number of Copy-right notices they sent in the past year. According to an article this number has increased by 3 times this year since last year. Many universities take this issue seriously and offenders are punished accordingly. This cannot be said for a number of Universities who do not consider it their duty to notify their students of these complaints against them ( Cheng ). If this is the apathetic attitude of an educated and informed management then it is horrifying to ponder that of the general not-so-informed public. It is absolutely necessary that the public are made aware of the fact that illegal uploading and downloading of music using peer-to-peer networks or otherwise also is stealing. There are laws under which the severity of punishments can be as high as five years in prison and $250,000 in fines with the minimum penalty being $750 for downloading one song. The user can be sued by the copyright holders for as much as $150,000 for every song downloaded from them. (“The Law”). Another point that needs to be driven home is that downloading is illegal whether or not it is done through software that is bought “legally” by the user. The software and its developers are committing a criminal act by creating a product that allows free illegal downloads possible. Similarly being a part of a network which is not authorized to distribute music freely is also against the law. It is also an offence if the user downloads it just for his personal use with no intention of commercializing the music. They can be sued in a civil court for loss of profits by the copy-right holders. Most people who commit these offences are also unaware of the fact that it is easy to trace them when they download. Each PC has a unique IP address which is registered with their service providers and all activity on the internet can be monitored. Another innovation in this direction (which is still in the process of being patented) is DIF- Digital Interactive fingerprinting. This unique piece of technology can be incorporated in a legitimate website where it interacts with the audio files when it is downloaded. If there is illegal activity and any of the audio files resurface elsewhere on the internet the fingerprint will also accompany the audio file thus making it traceable. This technology also includes an in-built search engine which continuously searches the internet for the fingerprints to surface (“How to stop online Music Piracy”). If and when the finger prints are detected the copyright holder is immediately notified. Users continue to be unafraid of the law only because of their blissful ignorance of these facts and the only panacea to this problem is widespread education. The music industry also offers legal downloading alternatives. Recording companies have tie-ups with various partners so that they can offer downloading services by subscription. Registering with authorized audio-video sharing networks, legal peer-peer internet services are all legitimate services offered by the industry. On line music stores like iTunes, iLike, AOL music etc also offer varied forms of legitimate music on the internet. The pirates have encroached in this area as well. There are a number of web-sites which deceive the user into paying for the services while distributing music without paying license to copyright holders. Between sites that offer illegal free music and those that are legitimate and still others which are deceptive, it will indeed be a challenge to convince the average person to do the lawfully right thing. Educators should first take these facts, and the issue of piracy as a whole, seriously and the magnanimity of the issue must be impressed firmly upon their students for the situation to get any better. Also what needs to be understood is that the statistics and percentage represents bigger picture. While these numbers seem frighteningly large the stories behind these numbers are depressingly sad. Piracy is not only a threat to the big labels in the recording industry or the big names in the music world. Almost all artists depend on the royalties from their music to cover the production costs. It affects livelihoods of the lesser known and yet significant portion of the music community. The song writers, musicians and hordes of others are laid off due to the fall in business brought about by piracy. New artists are unable to gain footing as there are few who are willing to sign them. It is estimated that from the sales of a new record companies receive 15% profit and the 85% goes into covering the production costs alone. With increase in piracy the vital 15% which used to for new ventures, signing up new artists and taking care of the risk that entails, is lost (“For Students doing Report”). Due to this every year an untold number of these unsung heroes and the gift of their music are lost forever. The world of music is one that is ceaselessly evolving; shifting from one form to the other, obeying no specific laws, bound by no constraints, save one- the discovery of fresh music. This is the essence of the industry which keeps it going. Whether the music manifests itself in the form of a composer, song writer, singer or performer is immaterial. What matters is that evolution should go on and new forms, genres and techniques in music should be given a chance to make their mark. But the scope for this budding artist to make himself known, broadcast himself to the world or maybe even usher in the new era in the world of music, is stunted due to the malignant presence of piracy. If unchecked, piracy can bring the growing culture of music with its beauty and joys to a grinding halt. Only when people understand this, will they wilfully restrain themselves from purchasing pirated material. Only then will students, so far used to getting all their music for free be willing to buy it. Only when they are made to understand the weight of their actions and the cumulative effect it has on the music industry will they be willing to subscribe to licensed websites alone. It is a an uphill task to make the multitudes who have been enjoying these free services to suddenly find their pockets a tad lighter . There are those who even argue that this free availability of music makes it possible to access old “dead” audio files. Still others argue that piracy increases music fans. None of these arguments make piracy legal in any way. The industry and law makers together should work out a strategy to combat piracy as it is clear what the repercussions would be if this issue is not immediately addressed. Work cited "Piracy: Online and On the street." RIAA. Recording Industries Association of America, Web. 3 Dec 2009. . Hall, Tia. "Major Music Labels Develop Anti-Piracy Technology." MUSIC PIRACY AND THE AUDIO HOME RECORDING ACT 2002 : n. pag. Web. 2 Dec 2009. . Hall, Tia. (“The Consumer Broadband and Digital Television Promotion Act” MUSIC PIRACY AND THE AUDIO HOME RECORDING ACT 2002 : n. pag. Web. 2 Dec 2009. . Cheng , Jacqui. "The RIAA lists the top piracy schools in the US." Ars Technica. February 22, 2007. Web. 1 Dec 2009. . "The Law." RIAA. Recording Industries Association of America, Web. 1 Dec 2009. "For students doing reports." RIAA. Recording Industries Association of America, Web. 3 Dec 2009. . "How to stop online piracy." PAN. Copyright 1989-2009. The Pan network, Web. 3 Dec 2009. . Read More