Music is an art form which plays a significant role in the lives of many people worldwide, and has done so for decades. With the advancement of new communication technologies and music programs over the past few years, the question begs, ‘has the music industry been affected by the advancement of internet technologies and music piracy?’ Through thorough investigation into the history of music piracy, the flow effects within society and other various literature examinations, it can be found that while some aspects of file sharing may be beneficial to the economy, overall, illegal downloading and sharing of music has immeasurable consequences on the music industry and subsequent sales.
The music industry is typically dominated by four main corporations consisting of AOL-Time Warner, Sony/BMG, Universal and EMI. These four companies were responsible for 80 per cent of global music sales (Crewe et al 2005, p.177) in 2005 and hold significant importance in the music business. The ‘Golden Era,’ as it is often referred to, was a time in which the music industry ‘enjoyed fifteen years of steady growth in record music sales following the introduction of the compact disk, better known as the CD’ (Crewe et al 2005, p.177). However, since this time, the major companies have experienced a turnaround in success which is linked to falling sales due to increasingly popular internet downloading technologies. After the post war period it is said music truly developed and began to grow in popularity. Increasing levels of income in the 1950s were linked to teenagers and people in their early twenties who thus represented the majority of music revelers (Crewe et al 2005, p.184). From the 1970s onwards however, when music cassette recording was increasing in popularity, it was disputed that ‘home taping was killing music as the straightforward way in which cassette recorders could duplicate music encouraged large-scale counterfeiting activities’ (Crewe et al 2005, p.180). Such claims reveal music piracy is not a new activity and highlight the scale in which this criminal activity has magnified. With the increase in internet usage moreover, came the statistics from surveys released in July 2003 that ‘30 per cent of internet users felt entitled to download copyright protected music’ (Richardson 2003, p.95), and thus highlighted the emergence of the digital age in which companies such as US based Kazaa, introduced flexible, market based music downloading. While some believe free distribution of music is good for the industry in that it allows previously unheard of musicians to become more easily recognized, others claim such acts to be unlawful and among other things, stealing (Greiner 2006, p.58). Launched in April 2003, Apple iTunes developed a response to music piracy by distributing music online, selling ‘10 million songs in the first four months of operation’ (Richardson 2003, p.96). Such an idea is purposeful in developing strategies to decrease the number of people downloading music illegally. ‘From the development of cheap and simple tape recording technology in the seventies and eighties’ (Richardson 2003, p.90) to the illegal downloading of Mp3’s and other music files nowadays, it is evident to see how far technology has come and makes it necessary to discover the flow on effects within society before further action can be taken.
While music piracy is nothing new and with it being virtually impossible for an audio pirate to experience legal trouble – prosecution is extremely uncommon, it is not surprising that in 2000 alone, the International Federation of the Phonographic Industry (IFPI) declared the global value of pirated music to be $4.2 billion (IFPI in Marshall 2004, p.163). With this in mind, it is evident there has been innumerable effects within the music industry, mostly of a negative nature. While, according to Francesco D. Sandulli and Samuel Matrin-Barbero, Associated Professors in Spain, ‘legitimate digital music sales have increased steadily, reaching an estimated US$1.1 billion in 2005 and accounting for approximately six per cent of global music sales’ (2007, p.63), global music sales on the whole have fallen by over nine per cent in 2002 alone (Crewe et al 2005, p.177). Such immense declines in sales have prompted most major recording companies to reassess their financial position and, at times, resort to terminating underperforming acts contracts in a bid to avoid spending money on material that may not regain sales. Such efforts have forced many record company executives to pay more attention to the ‘significantly increased rate of circulation of illegal copies of copyright music’ (Crewe et al 2005, p.179) and foreshadow the death of the music industry due to such practices. Moreover the fact that ‘only one CD sold more than ten million copies world-wide between 2001 and 2002’ is claimed by the head of IFPI to be the ‘direct result of the internet’ (Crewe et al 2005, p.179). A result in which the illegal copying and transferring of music over the internet is decreasing sales rapidly and forcing money that would otherwise be spent on discovering new talents, to be used to save the company. Despite the fact that illegal copyrighting of music has seen rapid declines in the profitability of record companies, other areas within the economy have also suffered.
While file sharing and other music downloading programs are damaging the music industry, there is also evidence to suggest that music piracy cannot be held solely responsible. Some claim that ‘the problems facing the music industry have not suddenly been manifested overnight, or even in response to on-line digital file exchange, but rather have accumulated over time in response to a set of broader cultural forces that have changed the role of music within society,’ (Crewe 2005, p.184) highlighting the versatility and vulnerability of the music industry and its ability to adapt in numerous ways. Other than the identification of music piracy as a reason for decreases in sales within the music industry, newer media and consumer electronics can also be to blame as the amounts of money people spend on such products subsequently reduces the amount of capital received by record companies. The Economist explains this best when stating ‘new passions, be it computer games, mobile phones or even the internet itself, have all attracted expenditure that, in many cases, was previously spent on music’ (2003). However, it can also be found that through music piracy, new businesses have been formed in order to take advantage of innovative modes of production, distribution and consumption. While this may be the case, it is indisputable that the music industry is a volatile and fickle market and is thus very difficult to predict with changes in fashion and taste also indicators as to the success or in most cases, failure, of the market.
Either way you look at it; there are certainly many factors to take into account when considering how the music industry has been affected by the advancement of internet technologies and music piracy, with it difficult to single out one reason. While numerous issues render the argument complex however, it can be said, considering the above information, that the development of music downloading has, overall, had a damaging effect on the recording industry and left its’ future in question.
