Whats Goin On: Music and The Internet (Part I)

In August 1999, the world saw the first public release of Napster. That moment set off a chain of events that, to this day, provides hours and pages of debate. Napster wasn’t the first technology to become the whipping post of the Recording Industry Association of America (RIAA), but rather the latest, and probably the most publicly debated.

The technology used to copy music has been around for three decades or more. When blank cassettes and consumer recorders were introduced in the 1970s, the RIAA pronounced impending doom. Sales of recorded music would sink and people would stop buying as much music as they used to. Even Alan Greenspan said, “Unless something meaningful is done, the industry itself is at risk.”

The Digital Home Recording Act was passed by Congress in 1992, mostly due to the lobbying of the RIAA and other such organizations. The act insured that digital audiotapes (DAT), and other devices that allow personal copying of music would be required to incorporate technology that would prevent consumers from making a copy of a copy from a copy. In other words, if you were to make a copy of something on a device, there would have to be technology in place that would prevent someone else from making copies from the copy you made. The act further mandates that a tariff be paid on each recording device sold. All of this meant that DAT never caught on as a consumer device, though it’s widely used in the professional audio business.

Let’s be clear about something: the RIAA is not out to protect consumers’ interest. It is out to protect the record companies. Their mission statement reads as follows:

“The Recording Industry Association of America is the trade group that represents the U.S. recording industry. Its mission is to foster a business and legal climate that supports and promotes our members’ creative and financial vitality. Its members are the record companies that comprise the most vibrant national music industry in the world. RIAA members create, manufacture and/or distribute approximately 90% of all legitimate sound recordings produced and sold in the United States.

In support of this mission, the RIAA works to protect intellectual property rights worldwide and the First Amendment rights of artists; conduct consumer industry and technical research; and monitor and review – state and federal laws, regulations and policies.”

Their goal, as stated above, is to see to it that the record companies make money. There’s nothing wrong with this, but when they seek to control and mandate what consumers can and cannot do with music that they purchase, therein lies a problem. If the RIAA, record companies and other such organizations had their way, trading files on the Internet would not be allowed (without proper payment), ripping (or digitally extracting) music from CDs that you purchase to make your own compilations, put on a portable digital device or play on your computer would not be allowed either. In the eyes of the RIAA, all of the above is the same as stealing, and furthermore has and will continue to cause a decline in the sale of pre-recorded material.

The music industry has seen the largest decrease of music sales in the last ten years (5 percent overall, but approximately 12 percent from the same period last year). Research done by firms such as In-Stat/MDR, the labels, scholars and especially the RIAA say that decline in sales is due, by and large, to the downloading of music over the Internet. While that may be partially true, many studies fail to take into account that over the last ten years the prices of CDs have gone up even though the economy has been declining, especially over the last few years. Consumers are also much more savvy than the record companies would like to think. They don’t want to pay twenty dollars for the one song they heard on the radio, and in many cases that’s exactly what’s being sold. Essentially, the labels are asking consumers to pay twenty dollars for a single. Consumers know how much it costs to manufacture a CD and in protest, some are turning to the Internet to get their music for free.

The number of people who download music from the Internet without any intention to purchase, I believe, is less than those who intend to buy. In fact, a study done by Jupiter Media Matrix said that Internet users who download music from unauthorized peer to peer (P2P) services are more likely to increase their music purchases. A whopping 34 percent said that they spent more money on music than before they started using P2P services, while 15 percent said they spent less. The remaining 50 percent said their purchasing habits did not change.

This all proves one thing: the music industry is missing out on a great way to promote music, and more importantly, make money. Their biggest mistake was shutting down Napster, and now they’ve got real trouble on their hands. They can shut down services like AudioGalaxy (which they did recently), but while they sit around patting themselves on the back, thinking they are winning the war, a new technology is born that is much more difficult to trace, therefore proving that it’s only a small battle that they have won.

[DISCLAIMER: The purpose of this article is to inspire intelligent discussion, educate and empower you as a consumer (who hopefully gives a shit). I’m not an academic writer and I don’t pretend to be one. While I’ve read many articles, studies and legal documents, I’m not an expert. I do consider myself a well-informed person on the subject. The article is full of information for which I do not cite my sources, but these are my words and opinions. I will provide links to all of the articles, studies and legal documents at the conclusion of this article.]