Andrew Lee
Problem and Solutions for Piracy
“In the race to adopt new technologies the music industry historically has finished just ahead of the Amish.” Stan Coryn, Former Executive at Warner Music Group
During the late 1990s music piracy exploded. There was a perfect storm of new technology during this time that gave rise to music piracy. Digitalized music that could be stored on a computer, also known as the MP3, paired with the explosion of the internet, made it possible for more people to share music than ever before. Record companies took notice and in 1998 they pushed through the first attempt, The Digital Millennium Copyright Act, to stifle the exploding piracy problem. Fourteen years later, after many other failed attempts to stop music piracy; it is still a huge and growing problem. If record companies want to survive while making a healthy living
the next ten years they need to stop fighting technology, and instead readjust their business models to adapt with the changing business and technological environment.
The music industries failure to adapt to the new technology is not a recent phenomenon. In the 1980s, just as cassettes were about to explode, there was a real fear in the music industry that cassettes would kill popular music. The British Phonographic industry, a music industry trade group, released an ad campaign called “Home Taping is Killing Music (And it’s Illegal).” Having the benefit of hindsight we can look back 30 years ago and call such a claim outrageous, but the fear of the time was real just as the fear that piracy is killing music is real today. A lesson can be learned from the way record companies were fearful of “home taping,” that is new technology is not something that should be feared by big record labels. New technology should be something that is embraced rather than feared, because it simply changes the game, it doesn’t end it.
Fast forward thirty years and the new menace to the record company is music file-sharing on the internet. Record companies are using the same rhetoric it used in the 1980s, but unlike the 1980s, the threat of today is very real. As music piracy becomes more widespread over the years, the number of legally bought albums drops significantly. Since 1999 “Music sales in the US have dropped 46%” costing a staggering seven billion dollars according to the RIAA.
1999 is an important year for music history, for that is the year Napster exploded onto the scene. Napster was the brainchild of 18 year old Shawn Fanning. It was the first file-sharing program and the first real test for the music industry. The program allowed for millions of computers to connect to one another over the internet to share perfect digitalized copies of music files. It took record companies until 2001, two years later, to shutdown Napster. By then it was too late and a can of worms had been open. The general population had gotten a taste of free music on a large scale and wanted more.
Following the shutdown of Napster by the record industry a new and improved way to share files came onto the scene in 2001. As Napster was being shutdown, computer programmer Bram Cohen was writing a new protocol that would work faster and more efficiently than Napster did. What Bram Cohen would release is a peer to peer service that would allow large file sharing to take place at a faster speed than that of Napster. The peer to peer protocol he would create was called Bittorent. Rather than writing a single program, Bram wrote the directions of how to make an efficient peer to peer service. He then founded a company that took the same name as Bittorrent, and would let the program be free to download. As of 2012 there are 150 million active Bittorent users. (Bittorent) Over the past ten years, as technology becomes more efficient, so too do the means to acquire and share free music. This translates to more money being lost by the record companies as time moves forward.
So the question begs, why does a program like Napster gets shutdown while people get to use Bittorent? Record companies would most certainly be interested in going after those using Bittorent. The number of Napster users peaked at around 26.4 million (Web Archive) while the number of users using Bittorent has passed the 150 million mark. Why Napster got shutdown and why Bittorent lives on is the center of the fundamental issue that record companies are facing as technology moves forward. That is, as new technology and new programs are written for file sharing, it becomes harder and harder for record companies to contain piracy. Bittorent is the improved version of Napster. Napster was able to be shutdown because it used one single server, was a program (not a protocol), and much easier to track. Bittorrent clients don’t use one main server, aren’t focused around one program, and material that is downloaded is taken from a number of sources, so it is harder to track. The creation of a Bittorent protocol has solidified piracy’s place in our culture.
Shutting down the services used my music pirates won’t simply stop the music piracy plaguing the recording industry. Nor will punishing those that partake in such activities. A study in 2004 asked teens if they believed music piracy was morally wrong. The study found only 8% of teens found illegally downloading music was “morally wrong.” (Barna Group) It’s impossible for record companies to continue with draconian measures of preventing downloading when only 8% of young people find music sharing morally wrong. If the other 92% find nothing wrong music piracy, they will be more inclined to download music files illegally. The recording industry cannot police a population that doesn’t understand why it’s being policed. It’s now more important than ever for record companies to adopt tactics I will lay out in the subsequent paragraphs.
Record companies, and those supporting the record companies, are going about solving the piracy problem the wrong way. As stated earlier, policing those that do not understand why they are being policed will only cause a rift between music consumers and the music industry. The recording industry goes about stopping piracy mainly using two tactics. Going after the services and websites and going after those unlucky individuals that do get caught. There is a fundamental difference between how the recording industry understands music and how those that pirate music understand music. Those that pirate music don’t believe that the record company and recording artists own every single copy of the music, just as the record companies and recording artists do in fact think they own every single copy of a record. If a solution is not reached in the future, both parties will suffer.
In October of 2007 the English band Radiohead took a step in the right direction by leaving EMI and releasing their 7th studio album, In Rainbows, as a digital download on their website. The theme of it was “pay what you want.” Fans were able to choose the price they would pay for the download. (Time) It sent shockwaves through the recording industry. Such a prolific band leaving a major record label to release an album with no set price was a major milestone in music history. The band chose to embrace technology and the internet rather than fight it, as record companies are so quick to do. The trend didn’t catch on with the record companies or any other major forces in music. At the time record companies were terrified, but it has since blown over and record companies are still trying to postpone the inevitable. Radiohead was the first major band to take such a drastic step towards the future of the music industry by leaving a record label and releasing an album in the way that they did.
Piracy is here to stay and no amount of lawsuits or websites shut down will stop it. As losses continue to mount for the recording industry, new voices are emerging calling for a real change in the recording industry. The recording industry has been able to embrace technology somewhat, through the means of Spotify. The setup of Spotify is similar to that of iTunes. Spotify boasts 15 million tracks, and they can all be searched for and most can be listened to if not “unavailable in your country.” Spotify produces money through advertisements between every five songs or so. For five dollars a month users can upgrade to Spotify premium. With Spotify Premium, users can have access to the music like a normal user, but without the ads. Now this model is a fantastic thing that record companies has allowed to exist but there is a better, if not more radical, business models record companies could adapt. Spotify is a great way to let people listen to music for free, but listeners do not own the music, and you cannot compete with free.
The way things are going music is going to be free eventually. So where does that leave the artists and the record companies? It won’t be easy, but much of the work would rest upon the shoulders of up and coming musicians themselves, whereas record companies would do all the work in the past. Instead of making money off of music being sold, artists would make money off of exposure. Because the cost of making a record has gone down significantly, bands could produce records themselves and upload them to websites that take on the same theme as Youtube. But instead of manually searching, people would be given recommendations based on the type of music they listened to. Unlike Youtube recommendations, this “Music recommendation” service, as put by internet entrepreneur Mike McCready (not the the Mike McCready from Pearl Jam) this service would be much more sophisticated. The service would offer you “enough of the ‘familiar’…to understand your tastes,” but then it would “expose you to enough of the ‘new’…for you to evolve in your own direction.” (Huff Post)
Such start ups would be difficult to take up, but this is where big time record would enter. As of now, record companies are still the main players in the game when it comes to finding and promoting music. Bands would take on more responsibility in promoting themselves through connecting with fans on social media while uploading the music they create to such websites. Record companies would operate the websites featuring the artists trying to make it big. There is no substitute hard for hard work, and in such a model recording artists would be left doing a lot of the promotion on their own. By connecting with fans and creating quality music a loyal base of fans would coalesce. Those fans would tell their friends and a following would ensue.
Just because the music is free in such a system doesn’t mean making money is sacrificed. Both the record company and the recording artist can make a decent living in this new system. Traditional means of making a large amount money in the business, however, would be in the past. Money could be made through advertisements on such websites where the artist is being promoted by record companies. If the website were to become as popular as iTunes, and it would if the recording industry fully invested in them, a healthy amount of money would be earned from such advertisements. There will still be the old fashioned way of selling overpriced T-Shirts, selling the rights to use the song in movies/TV shows, and of course concerts. No amount of new technology will be able to take away the experience of seeing your favorite act live, and if music artists are decent, they will do well with performing concerts.
No matter what happens in the ten years one thing is for sure, the status quo cannot continue. Something will have to give, whether it is the record companies and artists embracing technology, or governments imposing draconian measures on the internet on behalf of the record companies. There are multiple options for the record companies and artists to adapt to a changing world. What has been laid out is a radical change from how the music industry operates now, but if embraced, all parties involved will come out winners. The age of profiteering off of music will be over as the age of free music begins.
"BitTorrent and µTorrent Software Surpass 150 Million User Milestone; Announce New Consumer Electronics Partnerships." Prensa. BitTorrent, 9 Jan. 2012. Web. 15 Mar. 2012. <http://www.bittorrent.com/intl/es/company/about/ces_2012_150m_users>.
"The Barna Group - Fewer Than 1 in 10 Teenagers Believe That Music Piracy Is Morally Wrong." The Barna Group. Barna Group, 26 Apr. 2004. Web. 15 Mar. 2012. <http://www.barna.org/barna-update/article/5-barna-update/139-fewer-than-1-in-10-teenagers-believe-that-music-piracy-is-morally-wrong>.
Tyrangiel, Josh. "Radiohead Says: Pay What You Want." Time. Time, 01 Oct. 2007. Web. 15 Mar. 2012. <http://www.time.com/time/arts/article/0%2C8599%2C1666973%2C00.html>.
McCready, Mike. "The Future of the Music Industry." The Huffington Post. TheHuffingtonPost.com, 03 Nov. 2009. Web. 15 Mar. 2012. <http://www.huffingtonpost.com/mike-mccready/the-future-of-the-music-i_b_173481.html>.