Music Industry Structure and Interaction Assignment- Music Piracy

Music Industry -Structure and Interaction
Illegal digital Downloading
Introduction:
Illegal digital downloading is sometimes called piracy. It is the downloading of content from the internet, without permission from the copywriter/s, in addition to not paying for it. Undertaking this activity is what we call a copyright infringement.
In the past decade, the music industry has had to adapt to the new digital era. Throughout its progression, we have seen the birth and rise of piracy, which has been the foundation of many financial losses totalling to billions not just in the Music industry, but also the Filming, Gaming and software industry’s.
The industry as a whole, over the years has tried to devise a solution to the conundrum, but endured allot more failure than success; despite their emphasis on legalisations in regard to organised piracy companies, and their users.
In this report, I will be analysing how illegal digital downloading/piracy, affects the UK &US Music Industry, and Global Economy.
When and how did it start? The info graphic below exhibits the diminution of CD sales, transpiring from the year of 2000. This quandary was due to organised Illegal digital downloading companies, capitalising off illegal downloading, via P2P file sharing. Napster- a P2P file sharing network was one of the main culprit s during 1999-2001, causing the music industry a mass loss of revenue.

P2P (Peer-to-Peer) file sharing, enables you to search, locate and download file/s to your computer or device, from others users of the same network; as long as they are connected to the network, and have the file you are looking for on there computers system.
P2P file sharing doesn’t’ rely on a central index server to host the demanded file; as the users of the network, together are the provider and consumer, hence the expression ‘’ file sharing”.
How has Illegal digital downloading, affected the music industry & Global Economy?
Since 1999, it has been exceedingly complicated for the music industry to be able to control illegal digital downloading, as the numbers of consumers supporting the illegal organisations were rapid expanding. Thought p2p file sharing is not as prominent today as previous; there are still other means for consumers accessing and downloading illegally.
The IFPI (International Federation of the Phonographic Industry) is an organisation that represents the music industry world wide. They endorse the value of recorded music, and protect the rights, of produced/recorded music. A Digital Music Report is composed annually.
The IFPI’S Digital Music Reports confirms:
1,000% increase in digital income between 2004-2010
31% decline in the value of the Global recorded music industry
Estimated loss of £203bn between 2008 and 2015, due to piracy
40bn music file were illegally downloaded in 2008
Estimated 95% of music downloads are illegal
Growth of 6% in growth in digital music income
(IFPI publishes Digital Music Report 2011, 2011, www.ifpi.org)

The RIAA (Recording Industry Association of America) is a trade organisation which looks after the major music organisations in the US. Theses organisations produce, assemble and/or dispense just about 85% of all legal recorded music created and sold in the US.
The RIAA’s statistics show:
In the last 10 years, U.S music sales have dropped by 47%, from $14.6 billion to $7.7billion.
During 2004-2009, 30 billion songs were illegally downloaded on file-sharing networks
In 2009, only 37 % of music in the U.S was paid for
An approximation value of among $7 to $20billon of illegal digital music is , consumed in the U.S annually
Illegal downloading, of music and movies take up 24 % of the internet bandwidth globally, and 17.5% in the U.S
(Scope Of The Problem, (Year unknown), www.riaa.com)

BPI (The British Phonographic Industry) It is a trade organisation, est.1973, and funded by its members; who are the UK’s four major labels and many independent music organisations. These members are responsible for nearly 90% of UK recorded music sales.
The BPI’s statistics show:
The BPI has reported that for the sixth year in a row, UK music sales have fallen.
Both digital and physical album sales fell 7% last year, from 128.9 million to 119.9 million.
The 2009 figures saw an overall drop of 3.5%, despite a rise in download sales
Organised Piracy Companies, Which Affected The Music Industry?
As technology and the capability of computers developed, organised piracy companies took advantage of the situation, and were proficient in capitalising off illegal digital downloading. Although illegal downloading has been a cause of monetarily loss to the music industry (a negative); they are also innovators for the introduction of digital music (a positive). Since 2003/2004 the music industry has been able to capitalise off legal digital music downloads, through companies such as Apples.inc’s iTunes store, and Amazon Music
Here are a few of the most famous illegal digital downloading companies:-
Napster
Launched in 1999, by student Shawn Fanning, the first pioneering p2p file sharing site, where users were able to illegally download music, for free.
100million users and 80millions songs available for download
Responsible for the plummet of Global Music sales in 1999
Lawsuit filed December 7th 1999 by the RIAA for copyright infringement
An injunction was processed on March 5th 2001, requesting that Napster put a stop to its service
A settlement of $26 million was made for copyright infringement of music, plus an additional $10 million early payment for future licensing royalties
Napster was officially shutdown in July 2001, re-emerging as a legal download company in 2004
Lime Wire.
Founded in 2000, by Mark Gorton (A former Wall Street trader)
Its 50 million users played a major role in the loss of revenue in music sales from 1999-2009
RIAA lawsuit, resulted in a permanent injunction (case lasting four-years)
Ordered by the courts to immobilize the websites functionality on Oct 26th 2010, after losing a legal encounter with the RIAA

The Pirate Bay
One of the most famous file sharing websites; not hosting the files its self, allowed users to search for web links to download media content for free.
Launched in 2003 by a four friends from Sweden, Operating on a non-hosting-file platform, although p2p is commonly used in the process.
In April 2009, Swedish courts found the four friends culpable in aiding people to copyright infringe, by the formulation of The Pirate Bay website
After an appeal in 2010 the verdict was upheld, and the site has still remained active

What can governments and organisations do to embark upon the problem?
The UK Government- ‘Digital Economy Act’
Introduced in 2010, the new law will work with ISP’s (Internet Service Provider’s) in tackling the ever increasing online copy infringement. If users are found to be copyright infringing online, up to three- warning notices will be issued. If users continue, a suspension or termination to the internet connection will occur, with possible legal action. The law is being reviewed, and is set to commence in 2012.
The law aim is to:
Get ISP’s to block users from downloading illegally/copyright infringing
Get ISP’S to send warning letters to users found to be copyright infringing online. If ignored, suspension or termination will occur to the internet connection. (Three warnings, then action will be taken)
Protect jobs in the creative industries
Decrease online copyright infringement by 70%
The French Government- ‘HADOPI’
Is an independent agency introduced in 2007, formed by the Creation and Internet law in France, which has been successful. HADOPI is acquiescent with the EU law, and they have a legal out look on their processes. HADOPI is designed to:
Signal copyright infringers about their unlawful doings (illegal downloading/file sharing)
Serve notices to these users, with a legal approach (Notices have bee served since2010)
My Opinion Alternatives to illegally downloading
Sine the outbreak of piracy, the industry has created incentives for consumers to buy music cheaply. Companies such as Tesco sell chart CDs at an affordable price compared to other shops such as HMV.
Thiers is also other avenues to legally access digital music, from services like Spotify; offering streaming/subscription models where the user can have access to millions of songs, but never personally own it.
If the consumer prefers to download digitally, and own the file, companies such as Apple iTunes Store, and Amazon Music offer albums and single tracks. Most singles are in the 79p to 99p bracket.
I think that the government cracking down on piracy, will make the public more aware of their wrong doings, and the threat of getting the law involved, will change the attitudes and their behaviour.
If the public became use to paying for music again, the music industry will bloom, and labels will be more willing to invest in new talent, as the revenue from sales will be much higher than in previous years. This can open doors for the struggling independent artists, getting the recognition they deserve, from a major label signing.
The process of getting the public to purchase music legally will be a long one, but if the government legislations stay strong, I believe the public will get the importance of the message, and we will see change.