Now That's What I Call Music, Piracy!

Now That’s What I Call Music, Piracy!

I bought my first CD when I was about 10 years old. My mom had drove me to Target and allowed me to purchase one CD of my choosing; I chose Now 11. I spent what felt like hours scouring the aisles of the store looking for the 11th edition of Now That’s What I Call Music and finally found it on the shelf. I remember being filled with excitement and anticipation as we drove home; I was so anxious to put it into my CD player. I remember the only reason I wanted it was because there was a few rap songs my brother listened to on it. Since my mother didn’t allow me to listen to his music, I knew this was a great way to slide it past her. I will never forget that CD; I listened to it for days on end. As I played the CD, I poured over the insert book, reading the lyrics and singing along. Today if I wanted to own that same Now 11 CD the experience would be entirely different. A few simple searches on the Internet would lead me to various file-sharing websites where I could easily download the album for free. Instant gratification. I wouldn’t have to look through aisles, no waiting in line, and no money necessary.
This change in technology has done more harm than good to the music industry and the economy. Downloading music, whether legally or illegally, has completely changed the record industry. Consumers seem perfectly content to click their computer mouse a few times and download whatever songs they want at their leisure. It all makes perfect sense; the technology world is changing and we are taking what we are given. Almost everyone has an iPod or some other portable music device and the days of sitting around a stereo and listening to an album from start to finish seem lost forever. Digital downloads are far more convenient than buying physical albums. They don’t take up shelf space in your home and as long as you back up all your files, you don’t need to worry about losing your favorite album. However, common music pirates tend to lack the knowledge of who or how they are affecting.
The transition from physical copies of music to digital downloads has made music a commodity in the United States. It seems that music has been completely devalued by this evolution in technology. The excitement of going out to a record store and having to look for a specific album is gone. Virtually everything is available online and whether music fans realize it or not, society has come to take this art form for granted. According to the Record Industry Association of America, “global music piracy causes $12.5 billion in economic losses every year” (Who). There is no doubt it takes an affect on our $16 trillion plus national debt. This economic loss also affects the employees of record labels with 70,000 lost jobs (Who). With the US unemployment rate currently at 7.9%, it definitely takes a toll on that as well (Databases). Consequently these economic downfalls music piracy is creating detracts from revenue that could be spent on finding and promoting new artists and allowing signed artists to record more albums.
Losing money to piracy also has a profound effect on working musicians themselves. Artists are now forced to make up a large part of their earnings through licensing their songs to television commercials and shows, touring relentlessly, and selling merchandise. Even with these alternatives to offset the fall in record sales, artists can still struggle to make ends meet. Renting a tour bus and paying for a driver and gas can cost a small music artist almost a $1,000 (Arnold).
In 2007, the Boston based band, The Dresden Dolls, told National Public Radio (NPR) Music in an interview that their record contract had them receiving about $1 in royalties for every CD sold, but “before a band gets to see any of that, it has to sell enough CDs to cover all of the label’s production expenses, which can amount to hundreds of thousands of dollars” (Arnold). Most artists try to dig themselves out of this hole through relentless touring, but even selling tickets comes with a price. Venue and concert promoters take a share out of an artists ticket sales, they even have sound technicians and others workers to pay for too.
One could look back on Noah Webster, who is primarily known for his early and influential dictionary; he campaigned in the 1780’s for copyright laws to protect American author’s content (Paulson). He would not have been amused with today’s copyright issues. The printers of the 1780’s were not large corporations. They were small shops making their living largely by stealing the content of books published in Europe (Paulson). What’s so different about music piracy and the music industry today? Webster wanted to make sure his work would not be published without compensation, just like the music industry is trying to do today.
The debate over illegal downloading often focuses on technology. Those who defend the unauthorized sharing of music say that critics are living in the past and had better get used to the new reality. But that new reality is taking a toll. “Over the past decade, America has lost a staggering number of professional songwriters and composers, primarily due to the impact of illegal music downloading,” says Bart Herbison, executive director of the National Songwriters Association. “Those that remain in the profession are struggling to earn even a minimal income” (Paulson).
Most illegally downloaded songs come from major stars and labels, but the food chain surrounding major artists includes struggling songwriters, producers, and musicians trying to get by in a damaged industry. Unauthorized downloading is a global issue, and no one nation will provide a solution, but America’s origins suggest we should care more than most music pirates. It’s not about business models or emerging technology. It’s about living up to what Webster and the first generation of Americans believed. Art should be free, but not necessarily free of charge.
Consequently record labels and artists are not taking these losses lightly. In addition to public campaigns against piracy, the record industry has prosecuted numerous people suspected and guilty of downloading music illegally. Most recently The Boston Globe reported that a Boston University graduate student was fined $675,000 in damages for illegally downloading 30 songs and sharing them online (Valencia). That’s a far cry from the $30 he would have paid had he simply bought the songs on iTunes. Yet shockingly some say this graduate student got off lucky. In June of 2009, CNN reported that a 32-year-old Minnesota woman was found guilty of downloading music illegally and ordered to pay $1.9 million dollars for 24 songs (Friend).
In the midst of battling online piracy, the record industry is desperately trying to find ways to encourage consumers to buy albums again. In September of this year, Apple announced its newest version of iTunes called iTunes LP. This new program will include album artwork, photos, lyrics, and videos as part of an album purchase, in effect recreating the physical album experience (Apple). The company hopes that by offering these extra incentives to consumers, people will be more likely to spend their money on music as opposed to sharing files with each other.
Some may wonder what caused this digital music war; I say it could be blamed on Napster, invented by Shawn Fanning in 1999. Napster was a peer-to-peer file sharing program that bas “let the cat out of the bag” by allowing digital music to be accessed by virtually anyone for free. However on March 5th, 2001, Fanning and Napster were sued and prevented from sharing their copyrighted music. Not long after that came LimeWire, started by Mark Gorton in 2000. It was another free peer-to-peer file sharing program that expanded on what Napster created.
Finally on May 12th, 2011, the Recording Industry Association of America announced its $105 million case settlement with major recording companies (Sisario). In the lawsuit, the labels identified “more than 9,000 recordings made since 1972 that had been traded on LimeWire without permission and sought damages of up to $150,000 for each song” (Sisario). Although the $105 million settlement is far from the $1.4 billion the labels had sought as a maximum penalty, the companies are hoping that the case will restrain further piracy since Mr. Gorton, a former Wall Street trader with millions in personal assets, also faced liability (Sisario).
Fortunately there are a few music programs like Spotify and Pandora that are doing their best to combat music piracy. Pandora launched in 2000 but has since become increasingly popular today. With Pandora you can create up to 100 personal radio stations that play the music you like with advertisements in between every couple songs. It has over 150 million registered users today (Sasario). Spotify is a music-based streaming service that is based out of Sweden since 2009. It just opened in the US in July 2012. They offer users unlimited music for little (or no) money. Pay just $10 per month – the cost of a single album – and you can literally play music non-stop on your computer or mobile device. Don’t want to pay? No problem. Spotify has various options (depending on whether you’re in the US or Europe) for getting at least some music for free (Couts). Not only that, but you get to choose from Spotify’s catalog of 15 million songs (Couts). In Sweden, since 2009 when Spotify debuted, music piracy has dropped 25 percent. Including 9 percent alone this last year (Couts). There is no actual way to tell if it’ll do the same in the US, only time will tell. It’s hard to argue that we won’t see similar decreases in piracy if Spotify keeps the popularity it has today.
Although Pandora and Spotify rake in millions of dollars there is one thing that keeps them from gaining money: the cost of music royalties. Pandora, who just went public last summer, “has never had a profitable year”, and in its most recently reported quarter lost $20 million on $81 million in revenue. Spotify’s accounts for the last year, recently filed in Luxembourg, show that it lost $57 million in 2011, despite a big increase in revenue, to $236 million (Sasario). With artists and labels hit hard by declining sales over the last decade, it’s hard to argue for lower royalty rates. It’s fair to say that the graveyard of failed digital services, and the financial struggles of Pandora and Spotify show that the music industry hasn’t yet figured out the balance between licensing costs and how much money a digital service can make.
Altogether the music industry will never fully be rid of music piracy. Will music piracy destroy the economic wellbeing of the music industry? Only time will tell. People will continue to burn CDs and share music with one another, and file-sharing websites will probably always exist. I believe the best way to combat piracy is to keep consumers informed about the consequences of downloading music illegally, not only for the record companies but for everyone working in the music industry. The next time you consider downloading music from a file sharing website or giving a CD of yours to a friend, consider this: is 99 cents per song really too much to ask for all the months of labor musicians, producers, engineers, and record labels put into creating an album for you? If you still feel it is, I hope you plan on spending $40 on concert tickets sometime soon.

Works Cited
"Apple - ITunes - ITunes LP and ITunes Extras." Apple - ITunes - ITunes LP and ITunes Extras. Apple Inc., n.d. Web. 01 Nov. 2012.

Arnold, Chris. "Band Tries to Make It Big Without Going Broke." NPR. NPR, 17 Jan. 2007. Web. 01 Nov. 2012.

Couts, Andrew. "Spotify Linked to Major Decline in Music Piracy." Digital Trends. N.p., 29 Sept. 2011. Web. 01 Nov. 2012.

"Databases, Tables & Calculators by Subject." Bureau of Labor Statistics Data. United States Department of Labor, Oct. 2012. Web. 16 Nov. 2012.

Friend, Elianne. "Woman Fined to Tune of $1.9 Million for Illegal Downloads." CNN. Cable News Network, 18 June 2009. Web. 01 Nov. 2012.

Paulson, Ken. "First Amendment Center." Real Cost of 'free ' Downloads. USA Today, 21 Aug. 2012. Web. 08 Nov. 2012.

Sisario, Ben. "Major Record Labels Settle Suit With LimeWire." Media Decoder Blog. The New York Times, 12 May 2011. Web. 01 Nov. 2012.

Sisario, Ben. "Pandora and Spotify Rake In the Money and Then Send It Off in Royalties." Media Decoder Blog. The New York Times, 24 Aug. 2012. Web. 01 Nov. 2012.

Valencia, Milton J. "Supreme Court Refuses to Hear Music Downloading Appeal." BostonGlobe.com. N.p., 22 May 2012. Web. 01 Nov. 2012.

"Who Music Theft Hurts." Http://www.riaa.com. N.p., n.d. Web. 01 Nov. 2012.

Cited: "Apple - ITunes - ITunes LP and ITunes Extras." Apple - ITunes - ITunes LP and ITunes Extras. Apple Inc., n.d. Web. 01 Nov. 2012. Arnold, Chris. "Band Tries to Make It Big Without Going Broke." NPR. NPR, 17 Jan. 2007. Web. 01 Nov. 2012. Couts, Andrew. "Spotify Linked to Major Decline in Music Piracy." Digital Trends. N.p., 29 Sept. 2011. Web. 01 Nov. 2012. "Databases, Tables & Calculators by Subject." Bureau of Labor Statistics Data. United States Department of Labor, Oct. 2012. Web. 16 Nov. 2012. Friend, Elianne. "Woman Fined to Tune of $1.9 Million for Illegal Downloads." CNN. Cable News Network, 18 June 2009. Web. 01 Nov. 2012. Paulson, Ken. "First Amendment Center." Real Cost of 'free ' Downloads. USA Today, 21 Aug. 2012. Web. 08 Nov. 2012. Sisario, Ben. "Major Record Labels Settle Suit With LimeWire." Media Decoder Blog. The New York Times, 12 May 2011. Web. 01 Nov. 2012. Sisario, Ben. "Pandora and Spotify Rake In the Money and Then Send It Off in Royalties." Media Decoder Blog. The New York Times, 24 Aug. 2012. Web. 01 Nov. 2012. Valencia, Milton J. "Supreme Court Refuses to Hear Music Downloading Appeal." BostonGlobe.com. N.p., 22 May 2012. Web. 01 Nov. 2012. "Who Music Theft Hurts." Http://www.riaa.com. N.p., n.d. Web. 01 Nov. 2012.