The Internet’s Effect on the Music Industry Essay Example

to use and can be quickly downloaded ("www.")

Both Limewire and Kazaa are file sharing programs. Limewire is free and can be accessed at "limewire.com". On the other hand, Kazaa is also free, according to Graham's article titled "Ruling sets back music industry's".

The music industry suffers greatly from piracy, resulting in long-lasting lawsuits as the only source of revenue for these companies. Music piracy has been attributed by record companies as the main cause for the decline of the industry (Gundersen). Illegally copied discs led to a loss of over 300 million dollars in sales for the industry in 2005 (Bridis). CD sales also decreased by 8% in 2003.

According to Gundersen, piracy has resulted in a worldwide decrease in music sales. Mansfield's report reveals that the music industry suffered an 11% decline in sales last year because of piracy, making it the worst year for the industry in more than 25 years. Both music companies and artists are experiencing financial losses due to piracy. In response, they are implementing new strategies to combat piracy, such as raising concert ticket prices and scheduling additional shows ("The end of music?").

Dan Cryan, an analyst with Screen Digest, suggests that some musicians are willing to ignore illegal downloads as long as they can satisfy the public's craving for live music (Mansfield). This belief reflects the idea that certain artists offset the impact of piracy by earning money through concert performances. In fact, a significant portion of income for the top 35 pop artists now comes from concerts rather than recorded music ("The end of music?").
Piracy affects both consumers who abide by legal purchase methods and those who engage in illegal

downloads and acts of piracy. Those who choose to violate the law face the risk of being involved in costly federal lawsuits (Roach). Consequently, illegal downloads contribute significantly to the increase in concert ticket prices.

From 1996 onwards, the cost of concert tickets has increased by an average of 8.9 percent each year, according to "The end of music?". This rise in ticket prices affects not only those who engage in music piracy but also innocent individuals. On the other hand, stock prices within the music sector have declined as a result of piracy, as stated by Hauke. Consequently, numerous individuals have suffered financial losses due to this decrease in music stock prices.

Piracy has led to the creation of laws, which can be frustrating for consumers. Additionally, piracy has caused music companies to improve accessibility and purchasing options for their works. Legal issues and court cases have arisen between music pirates and record companies, such as the University of Tennessee, where students have been the subject of numerous complaints regarding online music piracy. In 2007 alone, the Recording Industry Association of America sent 959 notices to the university about a user on its network illegally offering music for download. The University of Tennessee has faced a total of 700 music copyright infringement cases.

"Music piracy is a widespread issue," according to Kristi Bogle, the president of the University of Tennessee's Student Government Association (Eder, "Music plunderers"). The University of Tennessee has taken action against this illegal activity by implementing punishments. Initially, students are given warnings to cease their illegal downloading. If they persist, file sharing programs on their computers are removed. In cases where offenses are repeated,

internet services will be suspended until a trial can be scheduled (Eder, "Music plunderers"). This problem extends beyond just the University of Tennessee and affects other institutions and individuals as well. Ray Beckerman, a New York lawyer who has represented many defendants in RIAA lawsuits, states that the association typically demands $3,750 in settlements. However, if the defendant possesses an exceptionally large shared file folder, the demanded amount increases to $4,250 (Eder,"Recording industry issues settlement letters")."

A raid conducted by the FBI in Detroit in November 2005 uncovered a music store that was selling counterfeit CD's for $5 each. The raid revealed over 100 recording drives and approximately 10,000 fake CD's (Bridis). The widespread problem of businesses engaging in online music piracy necessitated the implementation of stricter regulations by the music industry in cities where CD reproduction and sales take place (Bridis).

According to Bridis, Houston, Atlanta, Austin, Chicago, Dallas, Los Angeles, Miami, New York, Philadelphia, Providence San Diego and San Francisco are the cities with the highest rates of illegal downloading. These cities were chosen based on data from various surveys. Bridis also mentions that Brad Buckles from the Washington-based Recording Industry Association of America (RIAA) explained that they targeted these areas in their fight against piracy. This statement provides insight into their new strategies. Additionally,Roach reports that the RIAA has initiated advertising campaigns in college newspapers to discourage piracy.

Students play an active role in creating dynamic advertisements to promote legal music purchases, as stated by Roach. Additionally, Butler suggests that the Task Force on Intellectual Property proposes new laws and regulations to discourage future acts of piracy. The issue of music piracy extends beyond

the United States and affects multiple countries worldwide. For example, in France, individuals who engage in online piracy may face losing their internet connection, according to "France to Shut Off Internet for Pirate Users." This preventive measure necessitates collaboration among internet service providers, the government, and music rights owners. As part of this system, service providers initially issue warnings before imposing restrictions on internet access.

Both Africa and the UK are combatting music industry piracy by enacting stricter laws, resulting in an annual loss of $10 million ("Music Industry Loses 10 Million Dollars Annually"; Masson). Moreover, the impact of the internet on this industry is evident with the rise of internet radio. Unlike traditional radio, internet radio provides users with a wider range of choices as they can tune into stations instead of just listening to individual songs (Blethen).

Internet radio offers the opportunity for listeners to tune into radio stations worldwide, regardless of their location (McKibben). With internet radio, individuals can enjoy music from different countries such as Jamaica and Ireland without hassle. Depending on the device, some radios may require a Wi-Fi connection, while others can be accessed directly from a computer. Furthermore, online radio has its advantages for the music industry. Certain radio companies may charge users for accessing their stations, which in turn allows them to pay royalties to music companies (Costa).

Internet radio serves as a beneficial tool for the music industry as it enables the introduction of new artists (Mansfield). The introduction of these artists leads to the creation of employment opportunities across various music-related professions. Additionally, the promotion of new music prompts listeners to increase their music purchases. However, internet

radio also has its drawbacks. For instance, certain stations allow users to listen to music without any cost incurred (McKibben).

If radio stations do not receive income from listeners, they are unable to pay royalties to record companies and artists. Additionally, even when customers pay for radio access, internet radio offers a cost-effective alternative to purchasing entire albums. This option is particularly appealing as it is cheaper than a low-cost monthly subscription (Costa). Moreover, it is essential to understand consumers' attitudes towards online radio. Unlike satellite radio, most internet radio is available for free as long as there is an internet connection (McKibben). Given the widespread preference for free services, this aspect greatly pleases the majority of consumers.

The ability to discover and enjoy new music is a major appeal of internet radio (McKibben). Slacker, an internet radio station, exemplifies this by providing a portable MP3/radio player that can download music while connected to the internet or Wi-Fi (Costa). This player automatically updates its music selection based on the owner's preferences, which are indicated in their internet profile (Costa).

The Slacker player can be used for free with ads or can be purchased for an ad-free experience ("Slacker Music Service Launches Portable Player"). In addition to internet radio and piracy, the internet has other advantages for customers in the music industry. It provides consumers with easier access to the music they desire. Steven Marks, the executive vice president and general counsel for the RIAA, states that the music industry is constantly developing new digital models that provide fans, including college students, with their favorite music in the format and location of their choice (Roach). People can search

for music using search engines or popular platforms like YouTube (Mansfield). There are also numerous websites solely dedicated to music (Lieberman).

Apple's iPod, an MP3 player, is a customer advantage as it stores and organizes music (Hauke). It also provides access to iTunes, which allows customers to purchase songs or albums (Mansfield). Apple's contribution to the economy is remarkable as they generate revenue. For example, their online store in Japan sold one million songs in just four days (Hauke).

The music industry has been greatly impacted by the Internet, with both positive and negative consequences. While it has brought in significant revenue for consumers, it has also presented challenges for record companies and the industry as a whole. One major concern is that the Internet provides options other than purchasing and listening to music. For example, online games like Everquest and game sites like Pop Cap Games have become popular substitutes. Additionally, social networking platforms such as Myspace and Facebook, where millions of users spend countless hours, also function as alternatives to consuming music ("The end of music?" and "Composers to gain from YouTube").

According to Mansfield, legal downloads are having a negative impact on the music industry. Platforms like YouTube allow people to legally listen to songs and watch music videos for free. Online record stores such as iTunes offer the option to purchase single tracks at lower prices instead of buying entire albums, which are usually more expensive. Mansfield points out that songs typically cost around one dollar each, while albums can cost approximately fifteen dollars. It is worth noting that albums are typically sold in traditional music stores.

The music retail industry is experiencing ongoing challenges

in 2008, making survival and success increasingly difficult. Edwards highlights the impact of legal downloads on music stores. Additionally, Bill Plaster, owner of Dr. Strange Records, discusses how record stores have been severely impacted by the internet. These challenges are affecting not only record stores but also other businesses, with record stores bearing the brunt of the impact. Even large retailers like F.Y. are not exempt from these challenges.

E.(For Your Entertainment) shops, Tower Records, and Virgin Megastore have had to close some of their businesses because they are unable to generate enough revenue as they face tough competition from online music vendors (Edwards). The music industry has been significantly influenced by the internet, which has made piracy easier and introduced online radio, along with providing certain advantages and disadvantages for companies. The impact of the internet on the industry is a mixture of positive and negative outcomes, leading to a transformative effect. The government, music companies, and the World Wide Web are all working towards resolving the issues it creates in order to achieve overall satisfaction. Both the internet and the music industry will continue to coexist, ensuring that they eventually find a resolution for the best.