Owning the Intangible/Sharing Music

Introduction
Can you imagine paying $675,000 for 30 of your favorite songs? Well in July of 2009, Joel Tenenbaum lost his court case against four record labels, and was forced to pay $675,000 in damages to the record labels for illegally downloading copyrighted songs off the Internet (Itzkoff 2009). The act of downloading music without permission has been around for quite some time and is increasing world-wide. According to a recent report, “The number of regular illegal file sharers rose 35% between 2003 and 2007” (RIAA 2008). Downloading music without permission is quiet simple. First, you just download certain file-sharing software, which can be easily found for free. Then all you have to do is type the title of a song, artist, movie, or any other media type that you would like to download into the search bar, and it pulls up many different locations of such file so all you have to do is click on one and it downloads it to your computer. Not having to pay is one of the many reasons why unauthorized downloading has become so popular, not only is it free, but it’s also easy to do.

When a consumer downloads music without permission, not only the consumer, but even the artist benefits. For example, it makes artists connect more with fans and work harder to create something new and fresh. However, there are also downsides of unauthorized downloading. The RIAA and the major record companies claim that peer-to-peer networking is the number one reason for the recent decline in total sales. Although downloading music without permission is illegal, the punishments don’t fit the crime and downloading without permission can be beneficial for everyone.

Background and Lawsuits
The act of downloading music without permission has been around for a while, but it didn’t go main stream until the early 2000’s when digital music service called Napster was released. Napster was an online music sharing service that allowed its users to easily share their music with other users with no cost. However, in 2000, several record companies via the RIAA sued Napster for copyright infringement under the US Digital Millennium Copyright Act. The RIAA claimed that Napster’s users were infringing on the record companies copyrights, and that Napster was liable. Napster’s attorneys argued that Napster wasn’t breaking any laws because it’s protected by the law as long as none of its members are making money from any of the songs. In the end, the court ruled against Napster and ordered them to shut down (Borland 2000).

Even though Napster only ran for about two years, it had a major impact on peer-to-peer file sharing and the future of the music industry. Napster made a lot of its users accustomed to having all the music they could want at their fingertips for free. Napster became such a huge hit that many other peer-to-peer services started popping up, and peer-to-peer sharing became a huge part of the internet. Today, there are many different peer-to-peer file sharing services to choose from.

After the RIAA successfully shut down Napster, they started going after individuals in 2003. At first, music executives were opposed to going after their own customers because they thought the legal attacks would alienate consumers and create a backlash. However, the major music executives decided they needed to send a message to its customers. So on June 25, 2003 the RIAA announced they would start pursuing individuals who downloaded music without permission and bring them to court for violating the copyrights of the music labels.

At first, the main challenge the RIAA faced was just how to identify the people who downloaded music without permission and what exactly they had downloaded. An article in Business Week explained how the RIAA went after individuals:


 * The hunt was largely conducted by automated Net crawlers operating around the clock. While the industry is loath to reveal its investigative techniques, RIAA sources say the crawlers began by plugging in names of popular songs, such as Eminem's Lose Yourself, into song search engines such as Kazaa. That search, in turn, produced a list of hundreds, and often thousands, of people offering to share it.  The crawler then conducted a second "user-name" search to find out what other material these individuals were offering (French 2003).

As the article explained, it wasn’t very difficult for the RIAA to come up with many candidates to go after with this technology. However, this process would only return ISP addresses, not the actual person’s name. So the RIAA had to ask the downloader’s Internet service supplier for their actual identity, which sometimes was met with hesitation, but most providers supplied the names when faced with legal actions.

Finally on September 8th 2003, the first lawsuits were filed against individuals for downloading music without permission. The individuals would receive a summons, a copy of the list of charges being filed against them, and a two-page letter explaining why they were being sued. Because there were so many lawsuits filed, the RIAA hoped for as many settlements as possible. To get as many settlements as possible, the RIAA would try to scare the individuals into settling by explaining how much they could sue them for if they took it to court, and how with all the evidence they had built against them that they wouldn’t have a chance to fight the charges. These threats led most of the individuals to reach a settlement outside of court, usually around $5,000 dollars or more each. The individuals also had to sign a contract restraining them from talking about their settlements. These lawsuits laid the groundwork for all the future lawsuits brought against people who downloaded music without permission (French 2003).

Only two cases have ever actually made it in front of a jury. The first case ever to make it to a jury was Jammie Thomas-Rasset vs. the RIAA. The RIAA representatives accused Mrs. Thomas-Rasset of downloading 24 songs off of the popular peer-to-peer sharing service Kazaa. When the case was finally brought to a jury, they ruled against Mrs. Thomas-Rasset, making her pay $1.92 million to six record companies. However, even though Mrs. Thomas-Rasset was found guilty of all charges, the case is about to return to court solely to determine how much damages Mrs. Thomas-Rasset actually has to pay (Itzkoff 2009). The second case to make it in front of a jury involved Joel Tenenbaum, who was accused of downloading 30 songs off of Kazaa without the record labels permission. However, Tenebaum believed he had a strong defense against the record labels. A recent New York Times article explained Tenebaum’s main defense:


 * Nesson (Tenenbaum’s lawyer) argues that the Digital Theft Deterrence and Copyright Damages Improvement Act of 1999 is unconstitutional because it effectively lets a private group -- the Recording Industry Association of America, or RIAA -- carry out civil enforcement of a criminal law. He also says the music industry group abused the legal process by brandishing the prospects of lengthy and costly lawsuits in an effort to intimidate people into settling cases out of court (Reynolds 2008).

Despite a strong effort, the Boston federal jury ruled against Tenenbaum, and ordered him to pay a total of $675,000, or $22,500 per song, to the major record labels for infringing on their copyrights. However, under federal law, the jury could have awarded the record labels up to $4.5 million. Recently the case has been back in court, with both sides appealing every court decision (Reynolds 2008).

The RIAA is motivated by money, so they will try to say or do anything they can to gain more. Just look at the cases they’ve brought to court. As I stated above, the RIAA sued a single mother of four for $1.92 million for only downloading 30 songs. Now how do you think that compares to the punishment she would have faced if she stole two CD’s from a retail store? Her punishment would have been much less harsh, a punishment that she could actually afford to pay at least. However this seems very counter-intuitive. When you steal something, you physically deprive the owner of their own property, but when you download something you just receive a copy of it. So it’s just unrealistic to claim that copying a CD deserves a much harsher punishment than stealing a CD. Just because the RIAA wants to send a message to individuals who download without permission doesn’t mean that they should be able to sue for everything the individual has.

When it comes to the actual lawsuits against individuals for downloading music, it is the record labels, not the artist themselves, who bring the lawsuits to court. All the record labels care about is the money, not what’s actually best for the artist. However, for the most part, new artists have to sign with a label if they want to make it in the music industry, even if they disagree with what the record label thinks is best. A great example of this is the band OK Go. OK Go was once just another small indie rock band, until they released songs such as “Here It Goes Again” and “This Too Shall Pass” which became huge hits, not only because it was a great song but because they came up with some of the most original and popular music videos ever. After this success, OK Go soon signed with the record label EMI, but the partnership didn’t last long. In a misguided attempt to make even more money, EMI decided to block embedding on all of OK Go’s music videos on YouTube, which meant the videos were no longer able to be shown on music and pop culture blogs, new sites, and personal blogs. This action caused a 90% total drop in views of their music videos (Nosowitz 2010).

So, when EMI made OK Go’s music videos less popular, it meant that less people out there knew about OK Go, which in turn meant less people buying tickets and merchandise. This didn’t sit well with OK Go. Soon OK Go started to voice their discontent with EMI. OK Go’s lead singer, Damian Kulash, even wrote an op-ed that appeared in the New York Times. So in April of 2010, OK Go left their record label EMI, and formed their own label called Paracadute Recordings. After leaving EMI and restoring their videos, OK Go saw digital album sales triple and digital track sales jump more than sevenfold (Nosowitz 2010). Benefits of Unauthorized Downloading

For consumers, downloading music without permission can be very beneficial. Unauthorized downloading allows consumers to listen to all different types of music, and find out what they enjoy without it costing them anything. When a consumer first hears a song they have never heard before, they can go download and listen to not only that song, but other songs from that artist. If the consumer finds out that they enjoy the artist’s music they can go out and purchase merchandise, go to their concerts, and buy the artist’s albums. Then they can share that music with friends, and help that artist get even more fans. Another benefit of downloading music without permission is how it allows for a bigger selection for consumers to choose from. Sometimes it can be hard to find exactly what you are looking for if you don’t know who the artist of a song is. Or you can even find songs on peer-to-peer networks that you might not find in stores, such as mash-ups and the music of underground bands. Also, having more exposure to different types of music can help everyone see what they like and if anything inspire them to play their own music.

Even though the RIAA and record companies are against downloading music without permission, it can actually benefit not only the consumers, but the artist as well. For example, if an artist or band is not well known, allowing their music to be shared over the internet would be a good thing because more people would listen to their music because it wouldn’t cost them anything. This exposure would lead to a bigger fan base, and would help them become a success in the music industry, which would allow them to tour full time, sell merchandise, and hopefully get signed to a label.

For more well-known artist and bands, unauthorized downloading can still be beneficial. Mainly, it would help to increase the size of their fan base. If people don’t actually have to pay to listen to a band’s music that they’ve never heard before, they are a lot more likely to listen to them. This would lead to a larger following, more people at their concerts, and an increase in merchandise sales. Also, for most artists, simply getting their music out there and knowing that their fans enjoy listening to their music is what matters, not just the money.

An example of a band that has had success during the digital age is Iron Maiden. Iron Maiden is a heavy metal band that first formed in 1975, and has recently embraced the internet and digital age. That’s what Mr. McIver concluded when he discussed the lessons that the music industry can take from Iron Maiden’s continued success “Invest in the long term. Apply an image. Give the fans what they want. Tour and keep touring. Play the festival circuit. Embrace new technology. Be innovative. Be honest. Be original. Write good songs.” (Pfanner 2010) As McIver concluded, if the artist just gives the listeners what they want, by being creative, new, and original then the fans will support them. For example, Iron Maiden’s manager finds that sales of merchandise can account for more than 20% of a record label’s earning from a band (Pfanner 2010). Hopefully other artists out there will notice Iron Maiden’s success and try to follow in their footsteps by embracing the digital age Objections to Unauthorized Downloading

The RIAA and major record companies, on the other hand, believes the people who download music without permission are ruining the music industry. The RIAA tries to point towards all the people who depend on the music industry for their income, and how they are the ones who are really being affected by the economic losses. They also try to portray people who download music without permission as common criminals who have committed a horrible crime against the public and should be punished to the full extent of the law.

Even though the RIAA wants people to believe that unauthorized downloading is the worst thing ever to happen to the music industry and that the people who participate should be faced with gigantic fines, it’s just not the truth. The RIAA and the major record companies have to realize that times are changing, and that people are going to share music over the internet no matter what they do. The major record companies have to start giving consumers a reason to actually buy the albums, instead of just buying a couple tracks off the album or downloading it without permission. For example, the major record companies could offer songs sold only on the CD version, or include special cover art or any other kind of collectable. The major record labels could also try using a subscription type system for those who enjoy downloading as much music as they want. The consumer would pay a flat rate every month, which would allow the consumer access to all the music they could want. There is even evidence that shows that those who download music without permission are actually willing to pay. Jeff Tweedy, the lead singer for the band Wilco, describes an example in an interview, “We were contacted by fans who were excited about the fact that they found [copies of A Ghost Is Born] on P2P networks, but wanted to give something back in good faith. They wanted to send money to express solidarity with the fact that we'd embraced the downloading community. We couldn't take the money ourselves, so they asked if we could pick a charity instead -- we pointed them to Doctors Without Borders, and they ended up receiving about $15,000.” (Jardin 2004) As Tweedy pointed out, fans are willing to support their favorite artists even if they download their music without permission. Other bands have also started releasing their music for free on peer-to-peer networks, such as Radiohead and Nine Inch Nails, to get feedback from their fans.

During this decade, the music industry is going through a shift from physical to digital media. This shift is one of the main reasons why the major music labels have lost so much money recently. With the introductions of ITunes and other digital music vendors, consumers no longer actually have to buy the whole CD if they were only interested in a couple songs. This freedom has changed the whole music industry because now if they want an album to sell they must give their fans a reason to buy the album itself instead of just a couple songs. According to the RIAA shipment database, from 2004 to 2008 the amount of single tracks sold in the United States increased by 669% while the number of album sales dropped 42%. Consequently, the income of the major record labels suffered because single tracks are less profitable than the actual album. If downloading music without permission is such a huge problem, it would be expected to see a hurt in digital sales, but they are booming instead.

Conclusion
During the last decade, the music industry has entered into the digital age, where the major record companies must adapt to make a profit. The major record companies must start listening to not only their own artist, but the fans as well. Going after fans with outrageous lawsuits won’t get the major record companies anywhere. It’s impractical for the RIAA to believe they can stop everyone from sharing their music with others. They need to realize they’re fighting a losing battle and how unauthorized downloading can actually help their artists. The major record labels have to give their consumers a reason to buy the albums and songs, and realize that the fans will support an artist if they enjoy their music. In the end, the RIAA and the major record companies must realize that their market has changed and they must adapt to it, or else they will just continue to lose money.