The Online Music Industry - Essay Example

of the of the of the The Online Music Industry It has become common for people to download music via the internet. There are several P2P networks in the internet, which provide their subscribers an opportunity to download music without imposing any charges. This could be construed as the stealing of music by these persons, and similar to stealing a music CD from a retail store. There were several incidents in the past, in which most of the large music producing companies initiated legal action against such P2P networks, like Napster, Grokster, Kazaa and Limewire. In all those cases the court decided in favor of the music companies and ordered these P2P networks to desist from such music sharing (Dong, Li and Chen). Subsequent to the closure of the first generation P2P networks, other companies, like Gnutella, entered the fray. Gnutella is a P2P network that operates by means of proxy servers. This network permits its subscribers to be anonymous. These types of networks are less vulnerable to legal action. Freenet functions as a parallel network to the Internet. It has all the feature of a P2P network, and it was developed on the P2P network technology. In this technology, the required information or data is not stored on servers at permanent locations. The information is delivered to the user only when the user demands the information. The subscribers to this network can therefore act anonymously; and the flow of data or content cannot be tracked (Dong, Li and Chen). The present Internet Service Providers or ISPs are not providing sufficient protection to the content that is stored on the servers. Similarly, the ISPs are not safeguarding the interests of the users of the internet. Even the most famous and well established internet based companies are not respecting the rights of the users. There are several cases against these companies on the charges of copyright infringements. One such company is Yahoo, which blatantly ignores the rights of the internet users. Similarly, there are a number of infringements of music industry’s rights on the internet. In order to address this problem, the WIPO had provided several guidelines, in its Treaties in the year 1996 (Kennedy). The music industry is losing its legitimate revenues due to this illegal downloading of music through the internet. At present, the music industry is the largest loser. In the future, the new budding music stars would publish their music works on the internet and make it available for the general public, without any cost, in the hope of gaining fame (Seifert and Hadida). At the moment there are several online systems, which provide rating and customization services. For instance organizations like Amazon and Yahoo have initiated the social community, which provides ratings for upcoming music artists, and the existing launchcast systems are to be improved. This transformation would rescind the traditional control of music companies over music works. Ultimately a music industry, as such, would cease to exist (Fisher III). In the recent times, music has become public to a great extent and available for free. Thereby it has transformed into a public good. The underlying objective of this public good is to enable a person to enjoy the music he likes, without any other person or entity affecting his enjoyment of music. Furthermore, music cannot be excluded from being accessed by several people, when the access to it is made available to one person. It is well nigh impossible to make music excludable. It is also impossible to prohibit people from having free access to music (Fisher III). The novel activity of file trading has been claimed to be promotional advertising by traders. However, the music industry is not accepting these claims. For it, file trading is nothing but loss. Thus, music companies refer to file traders as pirates of music. They claim that every file trade activity constitutes a loss of revenue to them. In the same manner, producers of media content are losing their revenues through the broadcast of radio plays (New Media and Free Market Choice). This situation prompted the requirement of a balance between the interests of the consumers and the rights of producers of the media content. It was estimated that media producers were losing billions of dollars due to radio plays. Radios distribute the music on a mass level, which contributes to the loss of the producers. The existing laws that protect copyright material are poorly designed and complicated. These laws do not cover the MP3 format; under this environment, it is difficult to establish a fair market for music industry and music companies (New Media and Free Market Choice). A group of musicians and other technologists got together to conduct a comprehensive analysis of music. This group strived hard to create a substantive basis for music at the fundamental level. It developed a strategy to identify the structure of a music work, which included the melody, harmony, musical instruments employed, orchestration, lyrics in case of songs, and other elements. This method clearly recognizes and identifies each and every aspect of the song or piece of music. This group was constituted in the year 2000, and since then it has analyzed a large number of song tracks, of various artists. It documented the elements and structure of each and every individual song. This system is still continuing and includes the works of artists from all over the world (Westergren). Music companies should not employ any possible method to identify persons who share music online. This is an illegal activity, as had been opined by a US court. Similarly, the Dutch Supreme Court ruled that Kazaa, the online P2P file sharing program was not infringing copyright law provisions. These decisions adversely affected the music industry, and prevented music companies from curtailing music sharing. The music companies claimed that the online sharing of music resulted in a decline of sales of music albums (BBC NEWS). They requested the courts to permit them to prevent the free downloading of music from the internet. However, initiating legal action against users on charges of music sharing, without obtaining the prior permission of copyright owners, would be very complicated ad entail dire consequences. The Recording Industry Association of America issued a large number of writ petitions and subpoenas against ISPs. For instance, Verizon was asked to identify its subscribers who were suspected of having indulged in music swapping (BBC NEWS). However, Verizon contended that the recording industry was not empowered by the copyright law to pressurize it to provide details of its subscribers. This contention of Verizon was accepted by the judges. The court disallowed the issue of subpoenas, by the recording industry. The decision of the US appeals court left a significant mark on the strategies of the music industry (BBC NEWS). The music industry emerged victorious in the first war waged against music piracy, by obtaining a favorable decision against Napster. The court ordered the closure of Napster’s website and its central servers. Subsequently, the music industry continued its war against digital piracy of music with renewed vigor. However, the later attempts remained futile and did not provide such spectacular results. Although, the recording industry emerged successful in closing down an array of music sharing programs and websites, and suing the individual users on charges of piracy, digital piracy and the demand for pirated material has been on the increase (Bruno, Ferguson and Koranteng). According to one report, nearly 19% percent of the American internet users in the age group of thirteen years and above indulge in downloading music for free through the P2P services. In the year 2003, the Recording Industry Association of America commenced its campaign of legal action against pirates. As the internet’s sophistication increases due to new technologies like broadband, the more advanced file sharing technologies are also increasing (Bruno, Ferguson and Koranteng). BitTorrent is one such high level program, in which sophisticated piracy activity is carried out. The users of this program exchange high volumes of information and music content. The closure of eDonkey, Kazaa and OiNK websites did not have much effect, as they were supplanted by new programs. The previous users switched to these new programs, and this trend seems to be never ending (Bruno, Ferguson and Koranteng). The invention of the mp3 format for songs came like a blow to the music industry. This format provides the original quality of the song or music to the user and occupies very little space, and makes sharing easier. Some websites have offered the mp3 version of songs and music in the internet file – sharing programs, such as Napster and Gnutella. While suing Napster, the music companies argued about the loss of their profits and failed to accept the new technological development (Farmington). Pandora is a new service available online. It introduced a novel and innovative search engine for music, which Pandora termed as music genome. The users of this service have to fill in the names of their favorite music performers. Subsequently, Pandora operates an algorithm, which generates the full list of musicians that match with the names entered by users. The user can select any item from that list and stream the music. Pandora kept secret its licensing arrangements with musicians. The user can record this streaming music on his personal computer, which constitutes a pirated version of the original number. Despite this drawback, Pandora is a healthy music search engine that does not harm the music industry like other file sharing websites (Frost). Tim Westergren had developed the music genome project, in which the songs were categorized according to their structure. For this purpose genome markers are used, and the team of the genome project used more than four hundred genome markers. These genome markers help to classify the song by creating a special code for a particular piece of music. Genetic markers consist of fundamental features of the song, such as whether it is acoustic or electronic; and they contain the significant qualities of the singers’ voices. The orchestration is included in the markers; and other important traits are dissonant harmonies, effects of guitars, drum beats and cymbals, syncopation and minute influences, which are incorporated in the DNA map of the song (Kayne). The genome project’s team comprises of highly qualified technicians and musicians. In order to classify a single song, this group spends nearly thirty minutes. After having analyzed the song, they add it to the project library. Users of this service have to enter the name of the artist or the song, in the appropriate place on the website. The music search engine then goes through its large database and provides the list of songs that match with the request of the user. Then the user can listen to that song and the user can shift to another song in the list, by clicking the next tab (Kayne). Moreover, the user is allowed to create custom radio station, which would permit the coverage of a large number of music genres. QuickMix is an option available to the user to shuffle between radio stations. Thus, a wide range of songs are made available to the user. However, this service is limited to US users, owing to the limitations of licensing arrangements (Kayne). Internet based programs and applications require a new genre of legislation. The traditional laws and their interpretation are not of much relevance to the internet. Similarly, there is a need to either reform the old legislations or implement new acts for the internet and the ever developing technologies. The latter enable the internet users to download copy and distribute music, without paying anything to anybody (Kayne). In the United States, authors and inventors obtain copyright protection under the aegis of the Constitution of the US, specifically under section 8 of Article 1. On the basis of this constitutional empowerment, the Copyright Act of 1976 was implemented by Congress (An Act for the general revision of the Copyright Law, title 17 of the United States Code, and for other purposes). In order, to countenance the threat posed by internet piracy, the Digital Performance Right in Sound Recordings Act of 1995 was enacted. This act provides copyright holders to obtain remuneration for their copyrighted sound recording that are transmitted digitally. In order, to circumvent the provisions of this act; a number of entities commenced to transmit audio recordings over the internet. This so called webcasting could not be classified under any of the groups that had been specified in the act. To protect copyright against this latest maneuver, Congress enacted the Digital Millennium Copyright Act or DMCA of 1998. This new act, was in conformance with the various international treaties that were aimed at copyright protection, and was made applicable to even non – interactive webcasting (To amend title 17, United States Code, to implement the World Intellectual Property Organization Copyright Treaty and Performances and Phonograms Treaty, and for other purposes). This DMCA empowers an arbitration panel to arrive at a statutory rate, in the event of failure by the industry members to arrive upon a royalty rate that conforms to a reasonable market value. At that juncture, some music providers on the internet, like Napster had called for legislative changes that would ensure a mandatory license for the provision of interactive online music. In A&M Records, Inc. v. Napster, Inc., Napster’s plea for the implementation of a mandatory schedule, in respect of royalty payments, was not entertained by the Ninth Circuit Court of Appeals. The admission of this plea would have permitted Napster to make royalty payments and continue with transmissions, or to discontinue such transmissions (A&M Records, Inc. v. Napster, Inc.). This would have left music copyright holders with no choice than to transact with an entity that utilized intellectual property rights without proper authorization, while depriving them of right to exercise control over what were rightfully their exclusive intellectual property rights. Even if these entities had attempted to do business with Napster, the latter’s plea for a mandatory schedule would have precluded any opportunity for a contractual agreement (A&M Records, Inc. v. Napster, Inc.). There is considerable argument, in respect of the manner in which copyright holders are to be reimbursed for the use of their copyrighted material on the internet. The US Constitution’s Takings Clause disapproves of the use of a person’s private property, without adequate compensation. The US Supreme Court is partial to tangible property rights, while ruling in cases dealing with the violation of the Takings Clause. Copyright law, per se accords protection from illegal use of copyrighted material (Messerly). However, this is defeated by compulsory licensing, which compels copyright holders to permit the use of their work, against their wishes. Such an eventuality deprives copyright holders of the protection granted by Congress, under the copyright laws. In addition, such measures, breach the provisions of the Fifth Amendment to the US Constitution, and entail the payment of adequate recompense (Messerly). The courts have displayed a penchant for promoting such compulsory licensing, because it is their considered opinion that it benefits public use. It is therefore contended that such case law is ill conceived, and such dissemination of copyrighted material on the internet is at variance with the objectives of the Fifth Constitutional Amendment. As such, Congress should not desist from offering protection to copyrighted material, and in respect of music copyright holders, it should ensure that the latter have the latitude to negotiate any move to utilize their property (Messerly). The music industry continues to loss their legitimate profits due to digital piracy. The CD sales continue to decline at an alarming rate and legitimate digital revenue registered a growth of nearly 40% or $850 million. The music CD sales declined by 10%, or $1.75 billion, and this increased the gap between profits and the cost of lost sales. The music company WMG added a surcharge to the price of music, which was termed by its opponents as music tax. The ISP WMG claims that this surcharge is to protect themselves from legal actions by the music companies. Such imposition of surcharges by ISPs would be a further burden for the music companies which are already struggling (Bruno, Ferguson and Koranteng). The users in developed countries would have to pay an additional $5 per month to purchase the legitimate content. So the customers would see for alternatives to evade this surcharge. Music companies sue the ISPs for infringement of copyrights. ISPs impose surcharge on their users to meet the compensation. This is a continuous battle in the piracy world. The outcome of this battle would determine the future of digital music, and victory in this battle is important for the music world (Bruno, Ferguson and Koranteng). To surmise, it is evident that additional legal safeguards have to be enforced to protect copyright holders. However, the welfare of all the parties involved, like the users, music companies and other stake holders in this industry, should not be ignored, in this process. Works Cited A&M Records, Inc. v. Napster, Inc. No. 239 F.3d 1004. United States Court of Appeals for the Ninth Circuit. 12 February 2001. "An Act for the general revision of the Copyright Law, title 17 of the United States Code, and for other purposes." Copyright Act of 1976. 94th Congress, 1 January 1978. BBC NEWS. Blow to online music piracy fight. 19 December 2003. 11 October 2008 . Bruno, Antony, Tom Ferguson and Juliana Koranteng. "ISP MARKS THE SPOT?" Billboard (5/24/2008, p24-27): Vol. 120 Issue 21. Dong, Y, et al. "Research of intellectual property rights problems of peer-to-peer networks." The Electronic Library (2002, pp.143-150): Vol.20, no.2. Farmington, MI. Piracy. In World of Criminal Justice, Gale. 2002. 11 October 2008 . Fisher III, William W. Promises to Keep: Technology, Law, and the Future of Entertainment. Stanford University Press, 2004. Frost, Robert L. Rearchitecting the music business: Mitigating music piracy by cutting out the record companies. August 2007. 11 October 2008 . Kayne, R. What is the Music Genome Project? 11 October 2008 . Kennedy, John. Unlocking the music market in China. 25 may 2006. 11 October 2008 . Messerly, Laurie. "Taking" Away Music Copyrights:Does Compulsory Licensing of Music on the Internet Violate the Fifth Amendment’s Takings Clause? . May 2003. 11 October 2008 . New Media and Free Market Choice. 20 July 2006. 11 October 2008 . Seifert, M and A L Hadida. "Facilitating talent selection decisions in the music industry." Management Decision (2006, pp.790-808): Vol. 44, no.6. "To amend title 17, United States Code, to implement the World Intellectual Property Organization Copyright Treaty and Performances and Phonograms Treaty, and for other purposes." 105th United States Congress, 28 October 1998. Westergren, Tim. The Music Genome Project. 11 October 2008 . Read More