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Music Industry & Technology: Benefits and Threats Research Paper

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Updated: Jun 16th, 2020

Introduction

The music industry is one of the industries that have gone through extensive changes due to technological advancements. The advancements in technology have had both positive and negative impacts on the industry. One of the advantages that technology introduced to the music industry is that it has enabled the distribution of music all over the world, thus increasing sales. While technology allows musicians to market their music worldwide, it also creates space for cartels to reproduce and sell music illegally without obtaining the artist’s consent.

Music piracy refers to the unauthorized reproduction of music or other intellectual properties that are protected by copyrights. Music piracy has gained popularity over the last few years as individuals and companies get more involved in the business in order to make profits at the expense of artists. Technology has facilitated piracy and other illegal reproduction of music, thus leading to huge losses in the music industry. Efforts by the music industry to combat the vice have not produced the desired results.

Fighting piracy is an arduous task for the industry players since they do not have exclusive control over the Internet. Numerous laws protect the rights of artists, but despite the laws being in place, cases of illegal reproduction and downloading of music and movies are rampant. However, Kot laments that Internet piracy “in developed countries is a reflection of failure of the industry as a whole to develop an appropriate copyright response to the distribution and remuneration options made possible by the new technologies” (2).

This essay analyzes both the positive and negative impacts of technology on the music industry and comes up with a conclusion on how to contain the problem. The essay will also analyze the strategies that have been put in place by the industry players in an attempt to cause the technology to work in their favor.

Music piracy

Bhattacharjee, Gopal, and Sanders posit that the first case of music piracy was reported in the 1920s when radio stations were authorized to air records (107). The stations acquired the music legally, but there lacked proper mechanisms to regulate the frequency of broadcast.

Artists received no extra payment from playing the music in radio stations, and thus they only benefitted from the sale of albums. Katz notes that concerns from the performance rights societies compelled the authorities to pass legislation for artists to receive some payment in the form of airtime whenever their music is aired on a radio station (124).

The nature of music tapes at that time made the reproduction of music difficult, and thus piracy was low. However, the scenario changed following the invention of the first cassette tape, which simplified the process of music reproduction. With the cassette tape, it was possible to reproduce music since only the sound quality of the music would be comprised.

Molteni and Ordanini indicate that the year 1982 marked the beginning of large-scale piracy following the invention of CDs (389). The first CDs to be introduced in the market could not be copied, but soon after, technology facilitated the production of versions that could be copied easily.

The music industry received a major blow with the invention of the MP3 file in 1987, which came into use in the 1990s. The technology-enabled Internet users to access their favorite music from anywhere. In addition, the new technology created a venue through which Internet users could download and save their favorite music in their devices at no cost. It would also allow file sharing with people all over the world. Kats states that this invention enabled the establishment of companies that allowed P2P files sharing, such as Napster, Kazaa, and Grokster (135). In 2010, digital music accounted for 47% of the music in the market, which was an upshot from only 9% in the year 2005.

Sales of original music have had a decreasing trend over the past decade. This decrease is attributed to the new technology that has enabled illegal music downloads. Kats adds that in 1999, the sales of the recorded music were estimated to be at $14.6 billion dollars, but due to illegal recording and sales of music, the turnover has tremendously decreased and according to a report released by RIAA, the music industry only recorded a sale of $11.5 billion in 2003 (143).

This decreasing trend in sales of original music is not only experienced in the US alone. According to the International Federation of the Phonographic Industry report, sales from original music decreased by 20% internationally between the year 1999 and the year 2003. In a bid to fight illegal downloads and improve the music industry, various legitimate sites such as iTunes have been established over the Internet where prospective customers can purchase their favorite music.

Barnett notes that recent statistics show that sales from music had continued to decrease with the music industry recording sales of $8,480.2 billion in 2008 down from $14,584.5 billion in 1999 when piracy was not a common phenomenon (48). The RIAA reports that the industry loses close to $12.5billion annually through piracy and other unauthorized recordings. The loss is huge, and it contributes to the loss of employment and government revenues. Piracy is the largest threat to musicians, and it is threatening to kill creativity since it discourages new and upcoming artists.

However, the industry has launched a fight against piracy and illegal reproduction of music through the adoption of certain strategies aimed at eradicating the vice. The industry has moved to court on several occasions, demanding injunction orders to be issued on some companies. The industry succeeded in causing the closure of Napster, which encouraged peer-to-peer (P2P) sharing of files, thus posing a great danger to the music industry. However, some scholars argue that piracy can only be eliminated through moral grounds as opposed to legal means.

Benefits of technology

Despite technology coming out as the cause of the music industry’s downfall, it has also boosted the industry in a number of ways. Technology provides a venue through which musicians can market and sell their music internationally as opposed to the conventional overreliance on the local market. Artists can now market and sell their work through legitimate Internet sites such as iTunes.

Internet marketing may boost a musician’s income through increased sales in a piracy-free market. In addition, Molteni and Ordanini note that social media networks such as Twitter and Facebook help an artist to interact with their fans, and through this interaction, artists gain insight on their strengths and weaknesses, and thus they can improve on their weak areas (393).

However, the aforementioned benefits are realized at a cost. Even with the existence of legitimate sites aimed at providing consumers with legitimate music, the overall sales of music in the US continues to decline. The current sales of music is about half of the sales in 2003.

The decrease is attributed to the cheap music prices as iTunes music store struggles to keep the price of music low in order to deter customers from purchasing illegal versions from illegitimate sites, which is available over the Internet (Katz 123). Therefore, creating legitimate sites over the Internet may not offer a durable solution to the problem in question.

Music industry reaction to illegal downloads

The music industry has launched various strategies to help in fighting illegal downloads. One of the successful attempts made by the industry came out when the industry won a suit against Napster as aforementioned (Bhattacharjee, Gopal, and Sanders 110).

The company was forced to bankruptcy, even though this move did not end the issue of illegal downloading of music. The closure of this company provided incentives for the establishment of other similar companies to replace Napster (Molteni and Ordanini 391). Gnutella, Kazaa, and LimeWire are the some of the many examples of companies that emerged immediately after the closure of Napster (Cammaerts and Meng 8).

The companies are better placed to win in a suit instituted against them due to their founders’ experience, which was gained from the proceedings against Napster. Firstly, the companies had learnt that the legal procedure was slow and they could make huge profits before their termination in the event that they lost in a legal suit (Easley 166).

Secondly, the companies benefited from their decentralized nature that could frustrate any legal action against them. Attempts to bring the companies down failed due to the aforementioned factors. Kot laments, “In 2003…a federal court handed the business its significant legal defeat on the Internet front” (42). The federal judge declined to issue an injunction order to Stream Cast Network Inc. following a suit filed by the music industry (Easley 167). The judge claimed that the company only created software, but it had no control over its users.

In conjunction with the Recording Industry Association of America (RIAA), the music industry has shifted its focus from such companies to individual users of peer-to-peer services. Kot posits, “In September 2003, the music industry filed its first major round of lawsuits, naming 261 consumers who had shared more than a thousand songs each on music-swapping sites” (44).

Even though the industry claims that such legal means would lead to reduced cases of piracy, it has been criticized for its social irresponsibility and critics argue that the industry stands to lose public confidence (Dolfsma 5). The critics cite the case instituted by the industry against a 12-year old girl in its attempts to show its seriousness on the issue of copyright infringement (Bhattacharjee, Gopal, and Sanders109). The industry has justified its steps by claiming that it aims at sending a warning that anybody will incur penalties for downloading music without consent from the involved artist.

Another strategy that the music industry has employed is destabilizing peer-to-peer networks with dummy files (Bhattacharjee, Gopal, and Sanders 113). The industry has employed small companies, which are popularly known as “spoofers” that establish accounts in major P2P sharing networks (Molteni and Ordanini 389).

Contrary to the files shared by other peer networks, the spoofer files are corrupt or without content. The files are meant to deter the public from relying on peer networks to download music. Supporters of this move claim that the strategy is well informed, as it will erode public’s confidence on such sites in the end (Katz 123).

The final strategy adopted by the industry in its fight against illegal downloading of music is providing legitimate sites where customers can purchase music legally.

This strategy is a response to the argument that many people result in illegal file sharing due to the high cost of original albums in the market (Easley 163). In addition to the high cost of the album, customers have different tastes and preferences, and thus the album may contain a number of files that the customer does not need. In response to this claim, the industry has licensed a number of companies to provide online music sales services to the public (Dolfsma 5). Such companies include the iTunes and Music Match, which have gained public confidence and they account for a huge percent of overall music sales.

The Recording Industry Association of America (RIAA)

The Recording Industry Association of America (RIAA) is an international organization that was founded with the aim of supporting and promoting creativity (Cammaerts and Meng 7). It offers financial and other support to music companies all over the world.

Its membership is composed of major recording industries distributed all over the world. The RIAA’s main function is to produce and distribute music to the public. It is estimated that the organization distributes over 85% of genuine music in the United States (Bhattacharjee, Gopal, and Sanders 107). RIAA has been in the frontline in the fight against illegal production and sale of music and it has successfully instituted legal proceedings against companies believed to be perpetuating copyright infringement.

RIAA works closely with the music industry to eliminate P2P networks that have posed great challenge to the industry. RIAA has instituted civil claims against individuals and companies that facilitate illegal downloading of music. In addition to legal suits, the organization endeavors to educate the public on the illegality of downloading music without consent from artists.

The RIAA’s boss Mitch Bainwol has been quoted on several occasions saying that she will drop proceedings against any company or an individual who voluntarily pledges to quit illegal sharing of music over the Internet (Barnett 48). RIAA has also mobilized the university community to join in the fight against piracy. Various universities in the US have illegalized swapping of music through university Internet connections.

Conclusion

Technology has affected the music industry both positively and negatively. Technology has facilitated Internet marketing where musicians can market and sell their music all over the world. The same technology has affected the industry negatively by creating room for cartels to reproduce and sell music illegally without the artists’ consent. The first incidence of piracy was reported in the 1920s where radio stations would play music without paying a fee to the concerned artists.

However, the cases escalated as technology grew. In addition, Kot notes that the “next generation is not interested at all in radio” (23). The problem of piracy and illegal downloading of music has worsened in the past one decade due to inventions and creativity over the Internet. Companies have established Internet sites that enable downloading and sharing of music files. It is estimated that the music industry loses about 12.5 billion dollars to pirates. The Recording Industry Association of America (RIAA) has attempted to stop piracy through legal means and educating the public on the subject.

Works Cited

Barnett, Emma. “Spotify now makes record labels money.” The Telegraph 10 Jan. 2010: 48. Print.

Bhattacharjee, Sudip, Ram Gopal, and Lawrence Sanders. “Digital music and online sharing: software piracy 2.0.” Communications of the ACM 46.7 (2003): 107-111. Print.

Cammaerts, Bart, and Bingchun Meng 2011, . Web.

Dolfsma, Wilfred. “How will the music industry weather the globalization storm?” First Monday 5.5 (2000): 16-21. Print.

Easley, Robert. “Ethical issues in the music industry response to innovation and piracy.” Journal of Business Ethics 62.2 (2005): 163-168. Print.

Katz, Mark. Capturing sound: how technology has changed music, Oakland: University of California Press, 2010. Print.

Kot, Greg. Ripped: How the wired generation revolutionized music, New York: Simon and Schuster, 2009. Print.

Molteni, Luca, and Andrea Ordanini. “Consumption patterns, digital technology and music downloading.” Long Range Planning 36.4 (2003): 389-406. Print.

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