PIRACY

Online piracy and its impact on music industry



Abstract

Downloading digital products for free may harm creators and intermediaries because consumers may no longer buy the version for sale. However, as we show in this paper, this negative effect may be overcompensated by a positive effect due to sampling: consumers are willing to pay more because the match between product characteristics and buyers' tastes is improved. This indeed holds under sufficient taste heterogeneity and product diversity.

In recent years, illegal music downloading has become a large focus of the music industry. It has brought a huge drawback to the music industry mostly caused by the great force of MP3. Although more and more people are aware of this issue, there are still others who overlook the negative sides of downloading MP3 and the copyright laws and insist on downloading illegal music files due to it being difficult to trace these online illegal acts.

The aim of this essay is describe how MP3 has impacted on the music industry. It also includes basic information on MP3 technology, music file-transferring technology, music copyright laws, and will give three suggestions to prevent online music piracy.

Table of Contents

Chapter 1: Introduction3

Background of the Study3

Problem Statement4

Purpose of the study5

Rationale of the study5

Significance of the study7

Research Questions9

Chapter 2: Literature Review10

The Transfer of music files11

File sharing11

Downloading12

Online music piracy12

The problem of online music piracy12

Preventing music piracy13

Chapter 3: Methodology15

Time Scale16

Conclusion17

References18

Chapter 1: Introduction

Background of the Study

Digital music files (mostly in MP3 format) have become widespread on the Internet. File-sharing technologies pioneered by Napster and for a while dominated by Kazaa have become popular among certain online communities and a target for legal prosecution by record companies. Industry representatives largely attribute the recent drop in music sales (in Dollars and in units) to a rise in online file-sharing, which, from their point of view, simply reads as piracy of copyrighted material.

Advocates of online file-sharing, however, believe that file-sharing should be free and unrestricted. One argument goes that downloader's use the downloaded files for sampling in order to make more informed purchasing decisions. Hence, the argument continues, the music industry may actually benefit from file-sharing networks.

When looking at the research that is backing music pirates the industry is of course saying that the research has no creditability. They are scrutinizing the research because they did their time frame of research during the holiday season and that did not take into fact of what happens after the holidays in the normal time of the years and that during the holidays there is of course going to be widespread consumer purchasing of music. (Cave) The research that was conducted by Harvard Business School and North Carolina also did research on music sharing and downloading in the months that are not around the holidays.

Problem Statement

Everything has been affected by technology, and it helps make life more convenient and simpler. The technology of the computer has obviously become vital to humans' lives. One form of computer technology which has quickly become widespread is known as the ...