Paper 3 Final

Jose L. VazquezO. Quimby Melton

English 206

March 23, 2006

Hard Time for a Song

File sharing, according to the RIAA (Recording Industry Association of
America), has had devastating consequences to CD sales and they compare it to a crime such as stealing a car or another more serious felony. However, research clearly indicates that although the trading of music through the internet or other means has proliferated, CD sales continue to be high. Research conducted by
Harvard
University and the

University of
North Carolina indicates that file sharing has minimal to no affect on CD sales. Furthermore, the slowdown of sales in CD’s that the RIAA claims, may be attributed to the lack of spending during the recession and the increase competition from other sources of entertainment like are DVD’s and videogames of which sales have grown during the same timeframe in which CD sales slumped, according to an article by John Borland on Cnetnews.com.

The claim by Harvard and
North Carolina universities can be easily corroborated. The economy has a lot to do with CD sales. According to information provided on the RIAA website, CD sales saw a downturn between 2001 and 2003 the years recession hit the
US economy. The same information indicates growth in CD sales in 2004. According to the chart; CD sales in 2001 went down -6.4%, in 2002 -8.9%, and in 2003 -7.1%. The same chart clearly indicates a growth in sales of 2.8% in 2004. Another chart on the same website clearly shows continued growth in CD sales for 2005. This information can be easily accessible to anyone at the IRAA website.

In a recent CBSnews video report by reporter Vince Gonzalez, the RIAA wants to portray file sharing as a crime equal to stealing a car. This I find hard to believe, you can’t make the claim that stealing a car which can dramatically affect a person’s life be the same as sharing a song, having your car stolen can lead to severe consequences like losing your job for not being to work on time amongst many others. According to the report, there has been a recent court order by a federal judge ordering an internet service provider this time being Verizon, to turn over information on any customer who is said to be sharing pirated material, Verizon says they will appeal. File sharing might help CD sales say some people, I agree, people want to hear music before they buy it.

According to information provided also by the RIAA website, “perhaps the most [affected are], the creative artists…Musicians, singers, songwriters, and producers don’t get the royalties and fee’s they’ve earned.” The internet however has also benefited the recording industry, including the artists. A recent article on Clicks.com, and online marketing solutions firm, claims that digital music sales will be high. According to their research, the European online music market was expected to “quadruple” from $13.17 million at the end of 2003 to $57.5 million the year after; and eventually go up to “$1.03” billion by 2009 in
Europe alone. In the
US the 2004 figures were expected to be at $270 million by the end of the year, and eventually reach $1.7 billion by 2009. CD sales are, of course predicted to remain the top medium of choice in both the US and
Europe.

Another factor that can be claimed to affect CD sales is MP3 player sales and the portability of these devices; do you remember when you were walking around carrying that bulky personal CD player, wasn’t that annoying? Well do you see that now? Of course not, according to and article on twice.com by Joseph Palencher, data from Consumer Electronics Association says that; MP3 sales in 2005 reached the all time high of close to $5 billion dollars compared to just over a billion sold in 2004 and even less in previous years (see table below). These portable MP3 player devices obviously do not need CDs to function, this is what has kept the sale of online music sales up and will eventually continue to do so.

MP3 Players
Units	24,811,852		7,126,182	248%
Dollar value	$4,228,554,530	$1,288,557,324		228%

 

Eric S. Boorstin claims in his thesis that other factors which affected CD sales during this time are; Album prices, the RIAA claims that CD sales are hurting because prices are too high, because of file sharing this Boorstin claims is false, the RIAA is basing its argument on “nominal instead of real prices” (p. 22). Real prices according to him have remained nearly constant over the last several years. So far to a certain extent we have clarified and discredited the claim that CD sales are hurt by file sharing. This is a complete falsehood and being utilized by the IRAA as a marketing tool, they want to make the consumer feel bad for  them in order for CD sales to soar.

Furthermore, according to oberholzer and Strumpf file sharing allows people to; learn about music they would not have been exposed to and chat rooms permit people to discuss new music which can in turn create more music sales. They also claim that P2P traded material being in many times so low quality leads consumers to purchase the music they listen to first for free online. I agree with this, the internet has served as a great tool for new artists to get recognition for their work. For many artists the internet and file sharing programs provide them the opportunity they would not have had. It gives them a world wide audience; amongst that audience, recording industry scouts may be found. The RIAA also claims that the artist is severely affected by the trading of music, as I have said earlier this is not true. As a matter of fact, evidence clearly points to the artist not being affected. Artists in many cases do not make the royalties they are supposed to make from their album sales. Many times, this money is kept by the record company who owns the work of the artist.

As stated before, the RIAA is over exaggerating when it claims that the trading of music online should be considered a crime like stealing a car or another form of crime. Information points to the artist in many cases being benefited by this. The internet as a whole is a beneficial tool for any new artist, it opened a whole new world to these people and some of the services available online which streamline the process of putting out an artists work financially benefits the artist directly, instead of the greedy music industry executives. Many services which can be found online offer users the possibility of promoting, selling, and distribution thief music online for a low fee, or at least lower than what the recording labels charge. A Google search for “Online music distribution” returns over 66 million hits.

Online music distribution is the thing of the future and will only serve to benefit the artist and the consumer.   

 

 

 

 

 

 

 

 

Works Cited

Borland, John. “Music Sharing doesn’t kill CD sales, Study says” CNET News.com. March 2006. March 23, 2006. < http://news.com.com/2100-1027_3-5181562.html>.

Gonzalez, Vince. “Music Piracy vs. Record Labels.” CBSnews.com. April 3, 2006. < http://www.cbsnews.com/sections/i_video/yahooVideo_frameset.html>

Greenspan, Robyn. “Online Music Sales to Cresco.” Clicks.com. October 1, 2004. April 5, 2006. < http://www.clickz.com/stats/sectors/retailing/print.php/3416221>

Palenchar, Joseph. “Portable Audio Sales Top Home Units.’ Twice.com. March 27, 2006. April 3, 2006 < http://www.twice.com/article/CA6319031.html>

RIAA. “2004 Yearend Statistics.” 2004. March 24, 2006 <http://www.riaa.com/news/newsletter/pdf/2004yearEndStats.pdf>

RIAA. “Anti-piracy.” RIAA website. April 3, 2006. < http://www.riaa.com/issues/piracy/default.asp>

Boorstin, Eric S. “Music Sales in the Age of File Sharing.” Diss. Princeton U, < http://www.cs.princeton.edu/~felten/boorstin-thesis.pdf>

Oberholzer-gee, Felix and Koleman Strumpf. “The effect of file sharing on Record Sales, An Empirical analysis.”

Missouri
U. June 2005. April 4, 2006. < http://economics.missouri.edu/Seminars/PDF/strumpf.pdf>