The Impact of Music Piracy

The Impact of Music Piracy

According to the Recording Industry of America (RIAA) the record industry loses $4.3 billion dollars, worldwide, due to music piracy (RIAA, 2003). The American Federation of Artists claims that on-line music piracy has caused some record store sales to drop by 20% and that 20.6 billion illegal downloads occur every month (AFM, 2004). Many experts believe that music piracy is currently the number one threat to the music industry. RIAA sources claim 278 million people, worldwide, use peer to peer networks such as KaZaA and Grokster to trade music files. RIAA and AFM are fiercely fighting music piracy and enlisting government support to put and end to this crime. Congressional committees are currently addressing on-line music piracy and are generating bills.

Many people do not understand why music piracy is such a big deal and see it is a “victimless” crime. Contrary to this belief, there are many people who argue there is a wide range of victims who suffer the consequences of music piracy.

The main group who suffers are the actual music artists who receive no reward for their talent. Anyone with a computer can download whole entire albums without paying a dime to the music industry. Copyright laws and intellectual property laws are being completely disregarded. Music artists are not receiving the royalties they are entitled to for sharing their talent with their fans. This creates a lack of incentive artists need to continue creating new music.

Secondly, many groups feel as if government and our own economies suffer greatly due to this crime. According to a report created for the International Intellectual Property Alliance (IIPA) in 1999, the copyright industry accounted for $348.4 billion in value to the U.S. economy, approximately 4.3 percent of the Gross Domestic Product (USINFO, 2000). The IIPA estimates that the American copyright industry loses $22 billion due to piracy. Internet music piracy cancels job positions for Americans and fewer job positions harm the economy. The government loses millions in tax revenues and the economy is deprived of consumer investment.

Consumers and record producers also suffer the effects of music piracy. Consumers will feel an increase in concert ticket sales and legitimate album sales to compensate the artists for lost revenue due to internet music theft. Record producers will have less revenue to work with which is needed to scout and produce new talent. So, ultimately the consumer is hurt again because less money is available to “buy” new talent, so the music pool does not grow and music becomes stagnant.

Measures Taken to Stop the Piracy

The RIAA represents many major recording labels and they are taking lead in the fight against music piracy. The RIAA feels as if educating the public of the consequences illegal music sharing has on the industry will be key to decreasing the crime occurrences. The RIAA along with other groups has launched a major public awareness campaign.

The RIAA is also working together with Congress to enact new bills which would specifically give legal power to prevent music piracy.

HR 2517, the Piracy Deterrence and Education Act is being considered in the House Judiciary Subcommittee on Intellectual Property. This act would mostly attack peer to peer networks and force the FBI and the U.S. Copyright office to develop anti-piracy programs (AFM, 2005).

Since 2003 the RIAA has aggressively pursued music pirates on the internet who have committed a “substantial” amount of illegal downloading. They have won hundreds of guilty pleas averaging a reported $3000 per case settlement (Dean, 2004). RIAA President, Cary Sherman stated “the legal actions taken by the record companies have been effective in educating the American public that illegal file sharing of copyrighted material has significant consequences. Consumers are increasingly attracted to the host of compelling legal online music alternatives. These lawsuits help to foster an environment that provides a level playing field for these services to succeed.”

Road Blocks to Piracy Prevention

In 1984 there was a Supreme Court ruling which protected Sony Betamax from being held liable for propagating copyright