Effects of Downloading

The amount of people using the Internet is virtually everyone. Many homes have personal computers that their children and families use to serf the Internet, check e-mail, and chat with friends. Millions of Internet users nationwide take part in downloading content off of peer-to-peer programs such as Kazaa, Grokster, and WinMX. Peer-to-peer programs enable users all over the world to share files off of their computers, no matter what it is. All the person needs to do is put the desired file or folder into the пїЅMy SharedпїЅ folder and millions of people can download it onto their computers free of charge, whether it is copyrighted or not. This act is highly favored by people since they can get practically anything they want for absolutely nothing. Many people download music, videos, programs, and images because they do not have to go out and buy the fifteen-dollar CD, twenty-dollar DVD, or three hundred dollar plus programs. Downloading can be examined in three areas: the amount downloaded, the amount of money involved, and the actual damage to the entertainment industry.

The amount of music that is being downloaded is slowly dropping because of the lawsuits that the industries have filed against hundreds of people relating to copyright infringement.

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Record labels have been blaming the fall of their profits on illegal distribution of music. Nearly 75 percent of college students have downloaded music from the Internet, 58 percent of them using Napster, according to a study by Greenfield Online, a Connecticut research firm, and YouthStream Media Networks. 6 billion in lost wages and more than $1. It is impossible to accurately estimate how many files are downloaded using peer-to-peer systems, but claiming that each download represents a loss is irrational. Many people download out of curiosity, to check out an artist, which often leads to a sale.

The other side of the story is that sharing music online does not kill CD sales. Although the record labels can legally demand around $150,000 per song, people well known with the cases have said most settlements have been for $2,500 to $7,500.

In conclusion, the topic of whether downloading hurts the industry or not is a very touchy and indefinite one. пїЅOur issues are financial, not operational,пїЅ E. Researchers at Harvard University and the University of North Carolina tracked music downloads over 17 weeks in 2002, matching data on file transfers with actual market performance of the songs and albums that were downloaded. The loss to the economy has significant impact, including more than 111,000 jobs lost, $5. 67% of all the music downloaded is actually saved and listened to illegally.

Since illegally downloading files has become more common, there has been much controversy about whether infringement of copyrighted music has either hurt or helped CD sales.

Some economic studies have found that file sharing has a negative impact on record sales. For example, three papers published in the April 2006 issue of the Journal of Law and Economics (Liebowitz, Rob and Waldfogel, Zentner) all found harm from filesharing. Alejandro Zentner notes in another paper published in 2005 (Topics in Economic Analysis & Policy), that music sales have globally dropped from approximately $38 billion in 1999 to $32 billion in 2003, and that this downward trend coincides with the advent of Napster in June of 1999. Finally, using aggregate data Stan J. Liebowitz argues in a series of papers (2005, 2006) that file sharing had a significant negative impact on record sales.

However, the most widely cited paper concludes that file sharing has no negative effect on CD sales. This paper by Olberholzer-Gee and Strumpf,[1] was published in the February 2007 issue of the Journal of Political Economy, and is the only paper which analyzes actual downloads on file sharing networks. As staff writer John Borland of CNET News.com reports, “even high levels of file-swapping seemed to translate into an