Piracy in the Music Industry - Research Paper Example

Piracy in the music industry The paper is a research on the piracy in the music industry. The paper consists of the details of the start of the piracy, the operations of the music industry, the illegal downloading sites and the reasons for the people using these sites. Piracy has been one of the major troubles in the music industry. Every year there are losses in the extent of millions of dollars in the global music industry. Music piracy has evolved with time. Earlier, the original records were copied in CDs and sold illegally. With the advent of the Internet and the illegal downloading sites, the piracy of music attained a new high. Technology developed to support downloading of the songs. The online music sales formed a big part of the music industry revenues. However, with that the piracy also continued to increase. This affected the livelihood of millions associated with the music industry. The music industry and the Government reacted strongly to the piracy in the music industry and put laws into practice. However, they have not been able to stop the piracy altogether. Introduction Piracy in the music industry has been a general phenomenon in the modern world. The financial effects of the piracy have been devastating and there has been measures taken by the industry to curb the instincts of the piracy. Music piracy is the unauthorized duplication of music. This includes downloading from the Internet and copying in a CD other than for using it as a backup. Music piracy is same as stealing and it is completely unethical. It has been viewed as a criminal offence and the trend is prevalent in the younger generation. The piracy has increased with the advent of the Internet. The online sales of the music have soared but at the same time, the piracy of the music has increased. Due to the piracy, the music industry in the USA lost $3.7 billion. The loss has resulted in employment problems in the industry. Thus, piracy in the music industry is a serious offence and it has a detrimental effect on the music industry and the livelihood of the millions. (Higgins, Wolfe & Marcum, 2008) The paper will deal in the facts about the piracy in the music industry and the effects of it. Evolution of Piracy The piracy in the music industry started with the evolution of the MP3. The MP3 are compressed files, which are available in the Internet. These files are easy to download and can be transferred between the computers very easily. The MP3 are better quality for their smaller size and clarity. Napster started the MP3 revolution in 1999. It transformed the world of music and file sharing became easier. It also gave rise to the piracy in the music industry. In 2001, there were 1.5 million users of the Napster. (Li, 20th January, 2008). The music industry underwent huge losses since the evolution of the MP3. Since then various technologies have been discovered which have fostered the growth of the piracy in the music industry. Music industry Music industry has been an integral part of the entertainment industry. The components of the music industry like the studios, singers, music directors etc. are highly valued and they are rewarded according to their merit. However, the music industry is competitive and it requires planning and talent to survive in the industry. The music industry runs on the earnings of royalty. The earnings of the components of the music industry vary according to the performances. For instance, the singers or the artistes of the songs do not earn when their songs are played in the radios or any other medias. The artists earn according to the sale of their recordings. They earn a part of their income on the royalties based on these sales. However, the publishers of the songs earn money when the songs are played in the Medias like the radios and the televisions. The “Digital performance rights in the sound recordings act” in 1995 stated that the singers are to be paid when their songs are played in the digital arenas like the satellite radios or in medias where the subscribers pay for the services. When the songs are made they fall under the copyright of the songwriters and the music makers of the song. The holders of the copyright have full discretion in the use of their work and they can use the songs for the production of the other variations. However, there are clauses in the contract in the production of the songs, which state that the copyrights of the song will be transferred to the producer. This practice is followed in every contract of the modern world. There are also instances like the producers of the song enter in to the contracts to share the ownership with the songwriters on a 50-50 basis. The performers of the songs in the public concerts are given license for the same by the music company. The performers may be other than the original singers of the songs. The original performers of the song receive the royalty on the actual sales of the albums. The royalty may range from 8% to 25% and depends on the credential of the performer. The songwriters who give the other performers to sing their songs in the public concerts earn a royalty. There has been an explosion of the Internet sales of the music in the recent years. The publishers of the songs pay a lot lesser amount of royalty to the singers in the Internet sales of music. In the recent years the Internet sales of the music has increased in large amount and has added to the financial gains of the producers. The broadcast of the music through the Internet medium has also increased in the recent years with the evolution of the satellite radios and this has increased the earnings of the producers. The above discussion underlines the fact that the music industry is highly profitable for the producers of the music as they have more avenues to earn money. However, the singers and the performers of the music do not get paid to that extent. The royalties of the sale of their records only pay them to a certain extent. However, most of the royalty income is deducted as way of the costs involved in the production of the music and its marketing. The performers earn by the performing in the public concerts as they get a license to perform by the producers of the music. However, there popularity still depends on the album they sold. (Obringer, n.d.) Music Piracy The above paragraphs have underlined the fact that the music industry is dependent on the royalties earned. The singers get a small share of the earnings and the royalty depends on the sales of the records. Piracy of the music has emerged as a growing problem for the music industry as it affects the sale of the records of the music. The piracy generally consists of recording the music illegally from the concerts or the recording CDs. With the evolution of the MP3 this kind of piracy is prevalent in the market. With the advent of the Internet the piracy has entered its domain and the medium is used for piracy of music. There are various sites in the Internet, which facilitate downloading of the songs for free. The P2P networks facilitate the downloading of the music. These sites do not pay for the songs and violate the copyright rules. These are direct infringement of the law and are subject to piracy. The downloading of the MP3 from the Internet has become a huge problem for the music industry as it has contributed to the loss of the industry. The piracy meant that the customers get the value of the original CDs at a much cheaper price and thus they are not interested in buying the original versions. The men and the younger people are more likely to pirate than the other people in the society. (Cuadrado, Miguel & Montoro, 2009) Illegal downloading The illegal downloading sites of music have been a huge problem for the music industry. The illegal downloading sites affect the music industry as they do not pay for the use of the music and it results in the direct violation of the copyrights. By illegal downloading the music industry do not get the amount they deserve. The music industry involves a lot of persons like the producers, songwriters and the performers. By not paying for the music, the consumers affect the income of these persons. (Gould, 4th March, 2010). Sharing the files in the peer-to-peer networks are illegal and there are numerous sites which offers illegal music. The US music industry has in the past marked some of the sites offering illegal music. The sits like Allcoolmusic.com and mp3downloadcity.com have been earmarked for the offences of illegal downloading. (Gross, 27th December, 2007). Effects on the music industry The music industry has been affected very badly by piracy. The piracy started with the evolution of Napster and their technology of MP3. After the closure of the company, there were other technologies, which evolved with time, and companies like Kazaa and Morpheus evolved which had transformed the arena of piracy. Music is vital to the entertainment industry and it has been estimated that an US citizen spends $50.17 on the purchase of music. Various software have evolved fostering the trade of piracy. Online piracy is hard to detect as no physical transaction takes place. The piracy in the music industry has a detrimental effect on the industry. The sites offer free music and thus the consumers do not hesitate to download the music from the sites. The economics in the industry runs on the substitution effect, as people will not purchase original records if he can get the same quality for the price of a blank disc. Some researches point out that the piracy in the music influence the growth of the music industry with the increase in popularity of the songs. This is due to the amplified popularity of the songs. They state that the effect on the music industry is very less. It requires five thousand downloads to affect the sale of one CD. However, it cannot be denied that the increase in the Internet usage in various countries the piracy in the music industry has increased. Researches conducted over various countries of the world state that 1% increase in the piracy affects 0.6% decrease of sales in music. (Bender & Wang, 2009). The increase in the Internet proliferation and the development of the broadband has increased the chances of piracy in the music industry. The development of the technologies meant that the quality concern of the downloaded music is lesser. The increase in the piracy resulted in 31% decrease in the sales of music albums from 1999 to 2002. In 2004, 29% of the music listened by the consumers were in the form of “burned CDs”. Customers find it ethical in downloading music from the sites. (Lysonski &Durvasula, n.d.) The music industry is grossly affected by the piracy. However, most of the effects are on the singers. The singers get royalties on the albums sold. With the decrease in the albums, they get paid lesser. The music industry is threatened by the piracy of the music. It is the responsibility of the Government to stop the piracy of the music. The Britain Government has devised a three-pronged plan for the purpose. The first step would be to issue a warning to the users. Second step would consist of suspending the account of Internet access of the individual. Thirdly, it will stop the Internet access of the individual completely. The Government cannot stop the development of the software enabling the downloading of the music. Therefore, it will do well to stop the users. The example of Britain can be followed in other countries to stop the piracy. (Gilmore & Armstrong, 17th February 2008). Conclusions The music industry has been affected by the piracy of music in a big way. This has affected the sales of the industry. With the decrease in sales, the earnings of the performers decreased. The Government of various countries has devised rules to stop the piracy of music and has stopped the operations of companies like Napster. However, it has not been able to decrease the amount of piracy. Therefore, it will be better for the Government to stop the users from accessing the sites offering the free downloading. Technology will develop by the day and there will be more ways for the downloading of music illegally. The users will have to be educated about the problem and they will have to be stopped from accessing the sites. By following this path, the industry will return to the earlier position. References: 1. Bender,M and Wang,Y. (2009). The impact of digital piracy on the music sales: a cross country analysis. Available at: http://proquest.umi.com/pqdweb?index=2&did=1948605891&SrchMode=2&sid=1&Fmt=6&VInst=PROD&VType=PQD&RQT=309&VName=PQD&TS=1270114521&clientId=14844 (Accessed on 1st April, 2010). 2. Cuadrado.M, Miguel.M and Montoro.J. (2009). Consumer attitudes of music piracy: A Spanish case study. International Journal of Arts Management. Available at: http://proquest.umi.com/pqdweb?index=2&did=1746863261&SrchMode=2&sid=1&Fmt=7&VInst=PROD&VType=PQD&RQT=309&VName=PQD&TS=1270190593&clientId=14844 (Accessed on 1st April, 2010) 3. Gilmore,H and Armstrong,K. (17th February, 2008). War on music piracy. The Sunday morning herald. Available at: http://www.smh.com.au/articles/2008/02/16/1202760662778.html (Accessed on 1st April, 2010) 4. Gould,E. (4th March, 2010). Illegal music. The Charleston Gazette. Available at: http://proquest.umi.com/pqdweb?index=1&did=1976177461&SrchMode=2&sid=1&Fmt=3&VInst=PROD&VType=PQD&RQT=309&VName=PQD&TS=1270191581&clientId=14844 (Accessed on 1st April, 2010) 5. Gross,G. (27th December, 2007). Watchdog Group Warns Consumers of Websites Offering Illegal Music Downloads. CIO. Available at: http://www.cio.com/article/168050/Watchdog_Group_Warns_Consumers_of_Websites_Offering_Illegal_Music_Downloads (Accessed on 1st April, 2010) 6. Higgins.G, Wolfe,S and Marcum,C. (2008). Music piracy and Neutralization: a preliminary trajectory analysis from short term Longitudinal data. International Journal of cyber criminology. Available at: http://proquest.umi.com/pqdweb?index=4&did=1906547961&SrchMode=2&sid=1&Fmt=3&VInst=PROD&VType=PQD&RQT=309&VName=PQD&TS=1270185271&clientId=14844 (Accessed on 1st April, 2010) 7. Li,J. (20th January, 2008). On Peer to peer content delivery. Springer Science. Available at: http://proquest.umi.com/pqdweb?index=0&did=1898130181&SrchMode=2&sid=1&Fmt=6&VInst=PROD&VType=PQD&RQT=309&VName=PQD&TS=1270188427&clientId=14844 (Accessed on 1st April, 2010) 8. Lysonski,S and Durvasula,S. (n.d.). Digital piracy of MP3s: consumer and ethical Predispositions. Available at: http://proquest.umi.com/pqdweb?index=17&did=1472856461&SrchMode=1&sid=1&Fmt=6&VInst=PROD&VType=PQD&RQT=309&VName=PQD&TS=1270119735&clientId=14844 (Accessed on 1st April, 2010). 9. Obringer,L. (n.d.). How music royalties work. How stuff works. Available at: http://entertainment.howstuffworks.com/music-royalties.htm (Accessed on 1st April, 2010) Read More