The Current State of the Music Industry - Essay Example

The current of the music industry The music industry has gone through numerous changes and challenges over recent 30 years. Initially, tape media was introduced, and also compact discs and latterly the wealth and abundance of music availability via the Internet. The major problem facing the small number of very big firms which make up the majority in the music industry is the illegal sharing and downloading of music files over the web. This practice has been blamed for the decreasing rate of record sales, and which has in turn, affected business profit. According to Michael Greene, President/CEO of the National Academy of Recording Arts & Sciences Illegal file-sharing and ripping of music files is pervasive, out of control and oh so criminal. Many artistes, especially the new, less-established artists, are in immediate danger of being marginalized out of our business. Ripping is stealing their livelihood one digital file at a time, leaving their musical dreams haplessly snared in this World Wide Web of theft and indifference. (Greene, M) The fact that the Recording Academys leader would say something this serious on an occasion as joyous as the Grammy awards, indicates that the music industry knows that it is indeed, in dire straits. In 2001, more blank CDs were sold than CDs that already had music recorded on them. This was probably because a lot of people were downloading music files File sharing in the music business In the study of traditional ethics, the starving man depicts the classic problem. Is it ethical for a man who is starving to steal food because he has no money? This can be directly interpreted into whether a person is right to steal music it if he feels that the music is too expensive for him to buy. The topical escalation of media coverage besieging the demise of Napster has instigated widespread debate over the implications file sharing and the Internet will have for the record industry. The Napster software allowed its millions of users to share and download music mp3 files, which are of near CD quality, from each others hard drives. This infringed copyright laws and provided a very real threat to both musicians and record companies alike. In response Napster was sued by the American heavy metal band Metallica, and then taken to court by The Recording Industry Association of America; where they were subsequently ordered to cease operating. (http://theoptionblog.blogspot.com/2006/01/file-sharing.html) Even after a verdict like this, many of these companies, like imesh, limewire and Kazaa continuously offer facilities for file sharing, and some also grant internet users free access to music that is otherwise, copyrighted. There are many arguments which have arisen as a result of this, from various sides of the debate, some of which are mutually exclusive and cannot be substantiated. In 2000, McDougall published an article online, in which he stated the main arguments, as listed below: * Copying is fair use * Copying is theft * Music wants to be free * Napster users buy more CDs * Music companies make too much money * Music companies will make more money with Internet distribution * Musicians cant make money with Internet distribution (http://www.allfreeessays.net/student/Click_vs_Brick.html) Consumers Perspective There are 2 major arguments that have continuously tried to justify he piracy and unlawful reproduction of music online, from the perspective of the consumers. Firstly it has been stated that copying actually is fair use. “Many believe that subsequent to buying a recording; consumers should be entitled to do with it as they please. This is a very difficult matter to police, as the Internet is a global entity, and all nations have their own laws and regulations.” (http://www.allfreeessays.net/student/Click_vs_Brick.html). Most legal disputes on this matter, have taken place in the United States, where both the RIAA and Napster are based. According to the United States constitution regarding American copyright laws: "The Congress shall have power... to promote the progress of science and useful arts, by securing for limited time to authors and inventors the exclusive right to their respective writings and discoveries." (U.S. constitution regarding American copyright laws) The law allows for activities like criticism, teaching, news reporting, comment, or research or scholarship, and copies of music products may be made for teaching purposes, but copying for recreation or entertainment is prohibited, as this amounts to piracy. The Recording Industry Association of America has been active in the enforcement of this law, as regards to online piracy. There is a lot of antagonism especially on the part of the consumers over this development. There have been several protests, and an organization has been set up to promote a boycott of the RIAA because of this. This indicates that consumers have the right to download music freely. Also, the practices of the RIAA and some major labels in the music industry are questionable. Another issue in the defence of file sharing is that the peer to peer networks have increased the growth of overall record sales. This supports the theory that consumers are more likely to spend money on records, cassettes, and CDs when they are allowed to listen to free music online. This rhymes with the consumer behaviour theory, because after hearing and liking a song, the risk factor is removed from the purchase, and it is now a case of trying out the product before buying. The Musicians Perspective The musicians on their part have been contesting the practices of the various record labels, although this does not necessarily mean that they are in agreement with the arguments from the consumers’ perspective. The music industry is essentially an oligopoly, and five global entertainment companies have dominated and distribution and sales of music work all around the world. Some of these companies also have a history of turbulent relationships with the various artists that they promote, and an unethical reputation. There are some musicians who support the peer to peer networks because they believe that these networks can help new and upcoming artists to break into the mainstream industry. Some musical groups like the American punk rock band “The Offspring” have been known to actively encourage their fans to download their music, by creating a prize draw for fans who downloaded their music. The winners were to receive a sum of one million dollars, funded by the band themselves. The lead singer of the band, Dexter Holland stated that the group was not afraid of the internet We think its a cool way to reach our fans. If a band sells 12 million albums, what are we supposed to say? Oh, maybe we could have sold 13 million if we had just been Internet Nazis. Frankly, at a certain point, you have to say. Hey, let the people have the music. (Holland, D) This is interesting, but not every artist is successful enough to sell millions of records, and some musicians do struggle to earn their living, due to the effects of P2P networks and file sharing. Alternately, these networks might become a useful marketing tool for the artistes to increase the size of their audience, and their fan base. It is perfectly feasible that file sharing could be a promotional tool akin to commercial radio. It is also feasible that it could help break struggling acts into the mainstream. However, whether this promotional tool is utilised or not should be the artists prerogative and not the consumers. Artists and record companies can choose which songs to play on the radio in order to endorse an album, which is a greater body of work that the consumer may then buy. File sharers can download the entire album of there own free will. This is why it is unethical, an element of control is lacking, and without consent it is theft of intellectual property. (http://www.allfreeessays.net/student/Click_vs_Brick.html) Recording Companies There are 2 types of record companies in the music industry. Firstly, there are the major labels, and then there are also the independent labels. There are five major labels, each part of global entertainment conglomerates: EMI (Thorn), Warner (Time Warner), BMG (Bertelsmann), Polygram (Seagram), and finally Sony. These five labels have a combined global market share of 71.1%. Conversely, there are literally thousands of independent labels worldwide, which compete for the remaining 28.9%. Burnett (1996) found there to be hundreds of independent companies in the majority of countries he studied. Many independent labels are embracing the Internet and file sharing as a way to promote their artists. This may be because they exert less influence over the media, and may not be able to get radio or television airplay. (http://www.allfreeessays.net/student/Click_vs_Brick.html) According to the New Musical Express, a lot of independent music acts in the fore-front will end up with their songs legitimately returning to peer to peer networks immediately their paid membership service takes off, through their independent labels. Consequences Some parties in the industry feel that a minor degree of piracy can benefit the copyright holders in certain circumstances. They believe that this is possible by boosting the popularity of an artist or a particular type of music. Others point out that online piracy has been a valuable source of innovation, both to entrepreneurs and the industry itself. They say this is so because the online pirates have introduced the use of some new technological advances like file transfer, although this has been used both illegally and legally. They also feel that online piracy has encouraged the creation of innovative and legal models for business. However, it can be seen that the negative effects of online music piracy are much more than the possible benefits. Also, it has been observed that the society as a whole is in fact, also suffering from the effects of music piracy, because even though the music industry is not a major part of the GDP of most countries, a sizable decrease in sales of music products can cause a reduction of tax benefits to the whole society. Suggestions and Recommendations In order to minimise online piracy in the music industry, several steps have to be taken, including decreasing the price of legal music products, countering piracy by making free samples available to internet users, and music listeners, and offering extra incentives to consumers that buy legal products. Efforts should also be made to switch to a less vulnerable business model, to reduce piracy, and peer-to-peer networks should be integrated into the industry. Education of the customers should also be embarked upon, so as to increase their awareness of the disadvantages of piracy in the music industry. This can be achieved by enlightening people, especially young children and college students about the legal aspects of sharing music files and publicizing the fact that piracy is doing a lot of harm to the music industry. Conclusion It is very difficult to determine what is ethical and what is not when it comes to downloading of music and file sharing on the internet. However, it is clear that legally, copying is not fair use. Stealing of intellectual property still amounts to stealing, the substantiation of physical products notwithstanding. With these disadvantages of piracy and copying, it becomes more difficult to justify these acts, regardless of the procedures in the music industry. This is another issue entirely and consumers do still have a choice. “The ethics become even more questionable when it is pointed out that a lot of people make a lot of money from online music piracy. The IFPI claim the global pirate market is worth US.3 billion (this includes pirate CDs as well as online piracy.” (http://www.allfreeessays.net/student/Click_vs_Brick.html). Even though this does not automatically make it unethical, it should be noted that it is still an act of stealing. In trying to justify this, some say that the major record labels are corrupt anyway, or that copying really is a victimless crime. However, it is a known fact that piracy does damage this industry that a lot of people rely on for a living, and so the consumer is now becoming more educated about these ethical issues. References Greene, M (retrieved from http://www.joeydevilla.com/2002/02/28/this-world-wide-web-of-theft-and-indifference/) Holland, D (retrieved from http://iml.jou.ufl.edu/projects/Spring01/Linsenbaum/page3.html) http://www.allfreeessays.net/student/Click_vs_Brick.html Intellectual Property, D. Kearns, www.ITworld.com 04/09/01 Napster & Ethics Network World McDougall (2000) How the Internet Will Make The Record Labels Evaporate. Retrieved from http://world.std.com 06/08/00 U.S. constitution regarding American copyright laws U.S. Constitution, Article I, U.S. Government U.S. Government Unknown Section 8 www.Boycott-riaa.com Boycott-riaa www.Boycott-riaa.com Dec. 2002 www.fluidpage.com Read More