INFO TECH ARTS QCM1712

Assignment 1 – Desk-top Publishing Project

Devise and answer an appropriate research question addressing one aspect of how
digital technologies have impacted on music.

Has music piracy encouraged music listening, therefore assisting the

recording industry by widening its audience; if so, why does it need to
be discouraged?

Name: Ellen Dutton

Student Number: 2699585

Word Count: 1029

[good work – some inconsistent referencing of online sources in text – some

minor grammatical errors throughout]
 2 Ellen Dutton

Has music piracy encouraged music listening, therefore assisting the recording
industry by widening its audience; if so, why does it need to be discouraged?

Abstract

Music piracy and internet file-sharing has become an increasingly prominent

activity in the past decade; it is not only illegal but heavily discouraged by
companies in the music recording industry. This paper explores the idea that music
piracy is not as damaging to the recording industry as it is made out to be, by
comparing its acclaimed negative effects on the industry's revenue with the more
positive outcomes, including a larger listening audience and the introduction of new
distributing methods and technologies. The paper concludes by demonstrating the
less well-known benefits music piracy and its technology has brought to the music
industry, and suggests that record labels rethink the constraints their copyright laws
and inhibition of file-sharing put on music distribution and promotion.

Introduction

Music piracy is a prime example of how digital technologies have impacted

on music and the music industry. It is illegal, and generally frowned upon, but could

it be that by making music easier to access for consumers, music piracy has

encouraged music listening, and therefore assisted the recording industry by

widening its audience? If this is the case, why should it be discouraged? This essay

will investigate these claims by assessing what impacts music piracy has had on the

way people listen to and buy music; music sales figures, expanding distribution

channels and the potential growth of music awareness in consumers through file-

sharing will be focused on. In addition to both sides of these effects, the ethical

reasons behind discouraging music piracy will be briefly examined, and thus

question the validity behind the negative view of the practice.

 3 Ellen Dutton

Literature review

The journal articles most relevant to this essay covered a variety of opinions

and ideas about the effect of music piracy on the music industry. The majority of

studies and articles consider music piracy to be a problem for the recording industry,

blaming it for declining sales (Marshall, 2003, pp. 1-8), and detailing how unethical

the practice is (Freestone & Mitchell, 2004, pp. 123, 126-127). Other articles also

look into reasons behind the downloading, such as “social consensus” (Chiou, Huang

& Lee, 2005, p. 161), and Freestone and Mitchell (2004, p. 121) connect the practice

primarily to Generation Y consumers. Some articles take a more positive approach to

downloading, claiming the recording industry is old fashioned and that music piracy

is helping the industry progress (Easley, Michel & Devaraj, 2003, p. 93-96). A

particularly useful article by Easley (2005, p. 161-168) questions the recording

industry's reluctance towards file-sharing and explains the benefits of downloading in

regards to widening the listening audience and consequentially increasing music

sales.

The alleged effect on music sales by music piracy

The most prominent problem in the music industry that music piracy has been

blamed for is a decrease in the industry's revenue. Chiou, Huang & Lee (2005) claim

that “piracy is the greatest threat facing the music industry worldwide today” (p.

161), a notion supported by Peitz and Waelbroeck (2004) in declaring “the very

existence of the industry is at stake” (p. 71) as a direct result of the practice. These

claims are somewhat supported by figures across a number of studies; however the

severity of the impact of music piracy is extremely varied. Between 1998 and 2002,

the different effects world music sales have reportedly felt range from a drop by “7%
 4 Ellen Dutton

in value and by 8% in units” (Chiou, Huang & Lee, 2005, p. 162), to a “20%

reduction in music sales worldwide” (Peitz & Waelbroeck, 2004, p. 78) to an

industry decline of “$40 billion to $32 billion” (Marshall, 2003, p. 1). The RIAA,

whilst only financially representing the American industry, impressively states that

music piracy is directly responsible for “$12.5 billion of economic losses every year,

71,060 U.S. Jobs … a loss of $2.7 billion in workers' earnings, and a loss of $422

million in tax revenues, $291 million in personal income tax and $131 million in lost

corporate income and production taxes.” (http://www.riaa.com/faq.php)

Evidently, and as the RIAA also mentions, calculating these losses is “a

difficult task” (http://www.riaa.com/faq.php) meaning the numbers may not be

correct or reliable; something to take into account is that whilst CD sales may have

decreased, the record labels' response to internet file-sharing was to develop websites

encouraging paid internet downloading, meaning MP3s are taking over as the main

medium being sold (Easley, Michel & Devaraj, 2003, p. 92). Another notable claim,

outlined in Easley (2005), is that independent researchers Oberholzer and Strumpf

were “not able to find any significant connection between downloading and the drop

in sales.” (p. 165)

More positive, and less advertised, effects of music piracy

There is no mention from the RIAA about the other, more positive effects

free file-sharing has enabled. Scholars such as Easley (2005) claim that record labels

are overreacting to the pirating technology, that they have “more to gain than to lose

from embracing many of the innovations [the music industry] is currently battling”

(p. 163), and others claim that the more heavily involved younger generation (Peitz

& Waelbroeck, 2004, p. 77) (Freestone and Mitchell, 2004, p. 121) are retaliating
 5 Ellen Dutton

against what they believe were unnecessarily high prices for entertainment

technologies (Freestone & Mitchell, 2004, p. 126). The negative approach record

labels have to music piracy could be severely holding the industry back in terms of

increasing its listeners and consequently consumers. Easley, Michel and Devaraj

(2003) agree that file-sharing, whilst seeming to harm to sales income, is an efficient

way to distribute music (p. 96), and it has additionally been found that listeners who

pirate music also “exhibit a willingness to pay” for music (Easley, 2005, p. 164).

This reveals a different view point against the rules opposing music piracy: it

is better to have people listening for free, than to not have them listening at all. Jeff

Tweedy, from American band Wilco agrees, “We live in a connected world now.

Some find that frightening. If people are downloading our music, they're listening to

it. The internet is like radio for us.” (Easley, 2005, p. 164) It could be that the music

industry leaders are simply wary of this new medium for connecting listeners, and

are not taking into account the increase in audience they are reaching through free

music downloading. There are, however, more reasons to discourage the practice

than the supposed drop in sales income.

Copyright and moral implications of music piracy

Music Piracy is illegal, but it is also considered unethical (Freestone &

Mitchell, 2004, p. 123) and a breach of copyright (Beer, 2005, Hero or Villain

section, para. 1). Freestone and Mitchell (2004) believe that consumers should be

made more aware of exactly what they are receiving for free when they file-share,

such as the cost of manufacturing the recording itself, the intellectual property, and

how they are damaging the future of the products (p. 126). The RIAA also claims

that music piracy is “depriving the industry of the resources it needs to find and
 6 Ellen Dutton

develop new talent”. As Easley (2005) points out, however, there are flaws in record

labels' approach to condemning piracy: they have paid to have control over what the

radio plays, yet discourage consumers for accessing “perhaps the very same music

through internet file sharing” (p. 165). This casts doubt on the moral quality of their

side of the argument. As suggested previously, their reluctance may also be an

obstruction to a more efficient future for the industry; it may be time to rethink their

attitudes towards file-sharing. “We think the natural tendency is for producers to

worry too much about protecting their intellectual property. The important thing is to

maximise the value of your intellectual property, not to protect it for the sake of

protection.” (Easley, 2005, p. 165).

Conclusion

File-sharing and music piracy was made easier with the invention of the MP3

(Easley, Michel & Devaraj, 2003, p. 92), and as such is likely to remain an activity of

music listeners in the future. Throughout this essay, however, it has become clear

that there are many hidden benefits to music being passed between consumers for

free, despite the music industry's discouragement of the practice. Music piracy

“actually played a role in pushing record labels to adopt internet technologies”

(Easley, 2005, p. 165) and, for the consumers, has acted as a democratisation of the

price of music (Beer, 2005, Unrealised Potential section, para. 1). Whilst free

downloading is considered illegal, a point made by Beer (2005) is that copyright can

be both positive and negative in this instance: “Copyright both protects musicians’

incomes whilst restricting distribution and playback, and, therefore, limits audience

scope and accessibility.” (Hero or Villain section, para. 1) Through the promotional

value of file-sharing, the number of people able to listen to music increases, as does
 7 Ellen Dutton

the variety of music they can access, meaning logically that all target audiences

grow. Music piracy is not as damaging to the industry as it is made out to be;

technology and social culture are permanently influencing one another (Beer, 2005,

The impact of digital technologies section, para. 1), so perhaps it is time the music

industry renewed their ideas about what is considered right and wrong in terms of

sharing music with and between the public.

 8 Ellen Dutton

Bibliography [reference list]

Beer, D. (2005, February 7). Reflecting on the digit(al)isation of music. First

Monday 10(2). Retrieved March 24, 2010, from
http://www.uic.edu/htbin/cgiwrap/bin/ojs/index.php/fm/article/view/1209/1129.

Chiou, J., Huang, C., & Lee, H. (2005). The antecedents of music piracy: Attitudes
and intentions. Journal of Business Ethics, 57(2), 161-174. Retrieved March 8, 2010,
from JSTOR database.

Deutsch, C. H. (2002, October 1). Suit Settled Over Pricing of Recordings at Big
Chains. The New York Times. Retrieved March 24, 2010, from
http://www.nytimes.com/2002/10/01/business/media/01DISK.html?pagewanted=1.

Easley, R. F. (2005). Ethical issues in the music industry: Response to innovation

and piracy. Journal of Business Ethics, 62(2), 163-168. Retrieved March 8, 2010,
from JSTOR database.

Easley, R. F., Michel, J. G., & Devaraj, S. (2003). The MP3 open standard and the
music industry's response to internet piracy. Communications of the ACM 46(11), 90-
96. Retrieved March 24, 2010, from
http://portal.acm.org/citation.cfm?id=948383.948386.

Freestone, O., & Mitchell, V.-W. (2004). Generation Y attitudes towards e-ethics and
internet-related misbehaviours. Journal of Business Ethics 54(2), 121-128. Retrieved
March 8, 2010, from JSTOR database.

Hunt, K. A., & Mellicker, A. (2008). A case study of the music industry. Journal of
Business Case Studies 4(3), 79-86. Retrieved March 24, 2010, from Google Scholar.

Marshall, B. Music Piracy: The Struggle of the Recording Industry. (2003, July 3).
Retrieved March 24, 2010, from
http://www.associatedcontent.com/article/1888942/music_piracy_the_struggle_of_th
e_recording.html?cat=15.

Peitz, M., & Waelbroeck, P. (2004). The effect of internet piracy on music sales:
Cross-section evidence. Review of Economic Research on Copyright Issues 1(2), 71-
79. Retrieved March 24, 2010, from www.serci.org/docs_1_2/waelbroeck.pdf

RIAA: For Students Doing Reports. (n.d.) Retrieved March 24, 2010, from
http://www.riaa.com/faq.php.