Month: October

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It has been five years since the RIAA began its legal campaign against peer-to-peer file sharing and illegal downloading. At first, the 261 lawsuits filed in 2003 seemed to deter illegal downloading. The number of people under 13 years old who illegally downloaded dropped from 20% to 11.8%, even though that was an anonymous survey of Internet users conducted six times a year. RIAA supporters point to the fact that if this number had not gone down and if they had done nothing about this problem at the time then illegal downloading would be much worse than it currently is. Still, 2/3 of kids aged 9-14 say that they surf the web unsupervised and 59% say they download music themselves with no parental assistance. The industry needs to do more to help children obtain music legally, probably through prepaid accounts and gift cards. This PR nightmare for the labels has also started to see the individuals targeted by the lawsuits start to fight back. These lawsuits have frequently targeted children, grandmothers, and unemployed single mothers because IP addresses cannot identify the individuals. Judges have vacated judgments, overturned rulings, and slashed settlement fees. The RIAA has been countersued by some defendents and some major universites of Maine, Kansas, and Wisconsin have begun to refuse to cooperate. Rather than target its own fans and create more label-basing press, the RIAA needs to consider new tactics in fighting illegal downloading. This new services available that offer free, on-demand streaming and DRM-free downloads, the industry needs to focus on promoting these new sites rather than attacking their own consumers.

Month: September

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Presidential candidates Barack Obama and John McCain have their campaigns for the White House in full gear. While they typically discuss big-ticket issues, there are several issues at hand that directly affect the music industry, especially in the digital realm. While not necessarily a digital issue, radio royalties are the main concern on the agenda of the RIAA. They believe the next Congress is when the matter will be settled. While there has been a lot of progress to get performance royalties paid to artists, there is also a strong lobbying presence for broadcasters who do not want to pay the royalty. The Democrats have more openly backed the music industry's side, and any gains they have in the House or Senate would be a help. Net-neutrality is where the two candidates differ the most. McCain does not believe in regulation of the Internet and bandwith, while Obama strongly supports network neutrality to preserve open competition on the Internet. McCain wants an open market approach, whereas Obama says he will appoint FCC commissioners to reinstate the original net neutrality projections that the FCC eliminated in 2005. The music industry has not taken an official stance on the matter, but many artists (especially indie) have voiced their support for net neutrality. Their concern is that independent artists will suffer from bigger labels and sites getting preferential treatment with higher Internet speeds and bandwith. Both candidates have pledged to put an end to piracy and protect intellectual property, but neither has given any specifics on how they intend to do so. Although, Obama's VP candidate Joe Biden was the founding chairman of the Congressional International Anti-Piracy Caucus. Internet sales tax is not a main issue for the music industry, but the possibility of such a tax would raise prices for digital downloads and would not help in convincing consumers to pay for music and not steal it. While neither candidate has directly addressed the issue in their campaign, McCain has in the past advocated for a permanent ban on taxing Internet access fees and online commerce.

Month: July

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Music piracy has reportedly contributed to 70% of the reasons why global sales of recorded music fell 8% in 2007. But it has provided business with at least one advantage: statistics. It is helping management companies and more get insight into music-lovers interests and into what is truly popular. For every song purchased legally, 20 are said to be illegally downloaded. BigChampagne is a firm that compiles data about file-sharing to sell to its customers, like how many times a song is downloaded and where. Music executives are saying illegal downloading is no reason to put your head in the sand, because you might as well take advantage of the data available. These statistics are helping managers, labels, and more plan tours using the locations where artists are popular and can pair artists with groups their fans have similar tastes in based on people who download the same artists. Even though the execs are reluctant at first to use data from illegal use, they are coming to terms with its benefits.

Month: July

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Many Internet Service Providers (ISPs) are predicting that the Internet may soon break down. In a recent survey, 51% of ISPs think that the current rise of demand for bandwith will overwhelm the Internet. A quarter of those who said so believe this will take place in the next two years. This is a serious problem, especially for the music industry. With digital downloads on the verge of eclipsing physical sales, as well as being a great way to discover new music and more, the music industry cannot afford to lose the Internet as a form of monetization. Streaming video and illegal downloading of large music files over BitTorrent trackers are blamed to be the main culprits of the bandwith problems. Many different ISPs have presented possible solutions, but none are very popular with all interest groups. One possible solution presented to charge media companies and Web services premium fees for guaranteed fast lanes to their content. The Net neutrality movement has already lobbied for this to be outlawed, saying it will edge out smaller companies and turn the Internet into TV. Another option is traffic prioritization, where ISPs monitor what kind of content users are accessing with "deep packet inspection", where they delay certain types of traffic to clear lanes for more important information. Comcast had problems with this earlier in the year when they delayed BitTorrent traffic. BitTorrent may be used to download illegal files, but the program is used for legitimate purposes as well and Comcast underwent an FCC investigation. Even if Comcast saw if the content was illegal or not, there still would have been a backlash. Tiered pricing systems, where you pay more for more bandwith is another option. According to some, this is only a way to restrict traffic artificially to fit more customers into the network and raise prices. It is also a problem in areas where there is only one ISP. Ultimately, a solution will have to come soon and it will surely have a profound effect on the music industry and how it monetizes the Internet.

Month: June

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The RIAA has a team of individuals working hard to crack down on illegal downloading. This group investigates peer-to-peer (P2P) networks and is seen as vital to the successful future of the recording industry. Despite its efforts, the demand for pirated content online is still high and it is hard to see how much illegal downloading their actions have deterred. To root out illegal downloading activity, the RIAA works with MediaSentry, which has developed customized programs that operate over the Gnutella Network, the same as many popular P2P networks. The company has a list of song titles owned by RIAA-member company and gives specific hash codes to each song file. If more than one user on a network has the same song file with the same hash code, they know it is being shared illegally. The company can also download songs that they do not already have to see if they are RIAA-owned by "fingerprinting" the recordings. While a copyright owner cannot sue every person who downloads their song illegally, they can notify the infringer's Internet service and block their material. If the RIAA identifies a user with a popular hash code of just one digital file, it is enough to send a take down notice to the ISP. Many universities claim that they are being targeted illegally, but the RIAA says that is not true and not technically possible. They find what they find through public means. The RIAA uses litigation against only the most egregious of users. When that happens, they file the suit and target the IP address's registered user. OF the tens of thousands of suits filed against commercial ISP's, universities, and individual file sharers, only one has reached trial.