Project Proposal: Indie Music Online <p><p> Subtopics

• Online Indie Music Distribution

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Annotated Bibliography

Topic: The impact of free mp3 downloads on the music industry and how record companies, artists and audiences are reacting.

Burnett, R. and David Marshall, P. (2003) Web Theory: An Introduction, London: Routledge. ISBN 041523834X.

Chapter 9 (‘Entertainment’) of this book explores the impact of digital technology and the Internet on the entertainment industry, particularly the music sector. Burnett and Marshall delve into the effects of mp3 downloading for artists, record companies and music listeners. The book gives voice to key players in the debate, such as Napster, music artists (such as Korn, David Bowie and Prince), file-sharing site MP3.com and the Recording Industry Association of America.

Burnett and Marshall offer an insight into the "Napsterization of the Internet", the shift in control from record labels to artists and audiences (Burnett and Marshall, 2003:186). It outlines the breakdown of intermediaries and the ensuing ability of artists to promote and distribute on a global level, without dependence on labels to release songs and MTV to play videos. Solo artist Prince believes that:

young people... need to be educated about how the record companies have exploited artists and abused their rights for so long and... that online distribution is turning into a new medium which might enable artists to put an end to this exploitation (in Burnett and Marshall, 2003: 187).

The book also examines the music industry’s underestimation of the Internet; its fear instead of adaptation of mp3 technology; and its view of downloading fans as criminals instead of walking promotions. Burnett and Marshall emphasise that “above all, the music industry must move from selling CD albums to servicing fans�, because it is the fans buying the concert tickets, wearing the T-shirts and spreading the word (Burnett and Marshall, 2003: 195).

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Bhattaharjee, S. Gopal, R.D. and Sanders, G.L. (2003) ‘Digital Music and Online Sharing: Software Piracy 2.0?’ Communications of the ACM, vol 46, no.7, pp.107-111.

This article explores the motivations for downloading free music, comparing the mp3 frenzy to software piracy. For Bhattacharjee, Gopal and Sanders, the impact of technology-generated file-sharing is inconclusive and considerations must be given to issues such as costs of CDs, mp3 quality, consumer income and bandwidth.

The article is supported by data from an extensive survey of over 200 people, primarily college students who are the main offenders of ‘music stealing’.

It examines whether music buying behaviour is affected by the availability of free music files on the Internet. Bhattacharjee, Gopal and Sanders believe that unless high prices of CDs are “reduced from current levels to impact a user’s buying decision�, illegal downloading will continue due to accessibility of mp3s and the convenience of high-speed connections (Bhattacharjee, Gopal and Sanders, 2003:110).

Bhattacharjee, Gopal and Sanders note that although mp3 recordings have far poorer quality of sound due to compression than CD audio, over 90% of those surveyed believed mp3 quality was almost identical to that of CDs. This suggests that:

with widespread prevalence of compressed digital audio, users have become accustomed to and now accept this level of quality (Bhattacharjee, Gopal and Sanders, 2003:110).

The different views of music downloading are also briefly outlined. For example, as an “effective advertising channel� for artists; to a threat for the music industry that is undermining sales (Bhattacharjee, Gopal and Sanders, 2003:107).

It also examines the suggested measures of combating music piracy, such as copy-protected CDs, comparing it with similar preventive strategies used for software. Bhattacharjee, Gopal and Sanders suggest that like software, “listeners may simply do without the copy-protected goods� (Bhattacharjee, Gopal and Sanders, 2003:110).

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Westaway, N. (2003) Campaign Launched to Stop Youths From Downloading Music [Online]. Available: http://www.cbc.ca/artscanada/stories/music100493 [Accessed: 6 Aug. 2004].

Westaway’s article introduces a Canadian marketing campaign aimed at encouraging students aged nine to 17 to purchase CDs and stop illegal downloading.

Initiatives include public service announcements featuring commercial radio stations playing animal noises, bodily sounds and bad music; threatening that if consumers don’t start purchasing music, this is all that will be heard on Canadian radio. Videos and posters promoting music buying are also being distributed to schools.

Due to a 20 percent decrease in CD sales and an estimated loss of $CA250 million, Canada is one of the first countries to launch an extensive battle against illegal downloads.

Brian Robertson, president of the Canadian Recording Industry Association believes that today’s generation is simply not buying music and are not aware of the consequences for the recording industry:

“They’re enjoying [music] and not realizing that without their support, there will be less music in the future and less artists’ careers developed� (in Westaway, 2003).

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Ipsos-Reid (2001) ‘Online Music Distribution: Revolutionary Aspirations’. World Monitor, First Quarter, 2001, pp.53 to 59. [Accessed 6 Aug. 2003].

This article examines the impact of the availability of mp3 downloads, file-sharing and free online music; and questions whether audiences are bypassing CDs in favour of digital downloads.

Ipsos-Reid believes that although the mp3 wave has forever altered the recording industry, it has not replaced traditional music sources such as CDs and radio. It is also noted that CD sales have been growing, although the music industry argue this increase would have been higher without free online music.

For Ipsos-Reid, Napster is a promotional tool rather than an accessory for theft:

The service has allowed music lovers to sample songs that if enjoyed, have often propelled the purchase of CDs that might not have otherwise been purchased (Ipsos-Reid, 2001:58).

Regarding Napster and similar file-sharing networks such as Gnutella, the article states that North American surveys reveal the popularity of online downloading is due more to accessibility of music rather than freeness of music. Consequently, the music industry should be “working on providing even better access to music files than Napster did… at reasonable subscription rates or fees� (Ipsos-Reid, 2001: 58).

It also examines the issue of copyright and privacy. Ipsos-Reid notes that:

digital distribution has exposed the vulnerability of intellectual property rights in the Internet age. Anything can be digitized and… transmitted via the Internet, and music is just the beginning (Ipsos-Reid, 2001: 53).

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Australian Copyright Council (2000) Recent Developments 2000, NSW: B103v1.

The Australian Copyright Council sets out the developments and amendments of copyright in Australia, which is governed by the Copyright Act 1968 (Cth).

Australia has implemented a WIPO (World Intellectual Property Organisation) treaty (signed in December 1996) to legislate sanctions against digital conversion of artistic works to protect the owners’ copyright. Article 8 of the WIPO Copyright Treaty states:

…authors of literary and artistic works shall enjoy the exclusive right of authorizing any communication to the public of their works….including the making available to the public of their works in such a way that members of the public may access these works from a place and at a time individually chosen by them (in Australian Copyright Council, 2000:8).

It addresses changes made to the Copyright Amendment (Digital Agenda) Bill 2000 (the "Digital Agenda Bill" ). This bill provides that an Internet Service Provider will generally not be liable for copyright infringements by users for whom they provide Internet connection for, under proposed sections 39B and 112E (Australian Copyright Council, 2000:19).

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Burgunder, L.B. (2002) ‘Reflections on Napster: The Ninth Circuit Takes a Walk on the Wild Side’ , American Business Law Journal, vol. 39, no.4, pp. 683-707.

This article is an extensive evaluation of the 2001 case of A & M Records Inc v Napster. Burgunder explores the significant issues arising in the court battle, as well as the defects of the landmark decision, holding it up against legislation and similar cases.

Burgunder particularly compares it to the case of Sony Corporation of America v Universal City Studios Inc (1984), where the manufacturers of a Betamax VCR was held not liable for copyright infringements simply because it sold a device that may be used for such practice.

The Ninth Circuit did not follow this case and held Napster responsible due to their actual knowledge of copyright infringements of individual users. Burgunder believes the court’s ruling was a contradiction of the law:

this distinction is flawed since Sony also had actual knowledge that many Betamax purchasers would use the machine to violate copyrights (Burgunder, 2002: 684).

Burgunder also explores one of Napster’s case arguments: that file-sharing programs are legitimate because users don’t make commercial use of copyrighted songs and often merely “sample� music before buying CDs. The court determined that “those involved with Napster do make a commercial use because they “get for free something that they would ordinarily have to buy� (Burgunder, 2002: 686).

The article briefly examines user adaptation to the court ruling that Napster had to remove infringing material at the notification of record companies:

Users became increasingly clever, developing special codes and encryption that they transmitted among themselves, but that could not be discerned easily by search algorithms (Burgunder, 2002: 701).

Burgunder notes how the Napster case led to the birth of “an altogether different breed of file-trading services� (Burgunder, 2001: 702), particularly Scandinavian models (Music City, KaZaa and Grokster) where the sharing occurs through individual computers instead of company-owned computers.

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Trakin, R. (2004) ‘From Piracy to Promotional Tool’ , Advertising Age, vol.75, no.28, pp.14 – 16.

Trakin’s article explores the convergence of companies from completely different areas, to profit from the growing market of legitimate music downloading. For example, Napster has joined with Miller Brewing Co and Molson USA, Energizer batteries and Citigroup Credit.

Jay Samit, General Manager of Sony Connect, has teamed up with Toyota Motor Sales USA, eBay and United Airlines in ventures to transform digital music into an “alternative currenc[y] to cash� (in Trakin, 2004:16):

“We’re all about luring people from the pirate experience to the legitimate download… Being able to give you high-quality music without a computer crashing from spyware, brought to you by products and brands you know and love, is a natural fit. And the promotions can be customized to reach any demographic� (in Trakin, 2004:16).

For Trakin, Online promotions are not only appealing because consumers choose music to their satisfaction, but they “also eliminate the expense and labor of having to pick, pack and send physical product for fulfilment� (2003:16).

Forrester Research predicts that legal downloading will increase from $36 million in 2003 to $201 million this year. By 2008, legitimate music downloads is estimated to total $4.57 billion.

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Lam, C.K.M. Tan, B.C.Y (2001) ‘The Internet is Changing the Music Industry’ , Association for Computing Machinery (Communications of the ACM), vol.44, no.8, pp.62 – 69.

This article explores the changes to the music industry effected by the Internet. Lam and Tan believe that the recording industry is not threatened by mp3 technology, but the emergence of a new channel that allows public distribution of music, but cannot be controlled by the music industry.

As a result of this disintermediation, there are more possibilities for artists to handle aspects of music creation, production and circulation. Artists are given more artistic freedom and more opportunities to collaborate with other musicians and distribute music, without complications of record companies. They would also receive a larger cut of the profits that labels traditionally retained.

Lam and Tan note that retailers are no longer needed by consumers to locate recordings. Individual songs can be downloaded without buying whole albums and purchases can be made directly from the artists.

Lam and Tan believe that consumers will be “the biggest winners with the new music distribution paradigm� due to intense competition in the music industry to deliver quick, first-rate, convenient and cheap music.

In part, the history and operation of mp3s is discussed along with its uses, appeal and implications. Due to the threat of mp3s and the ease of distribution and piracy, the Recording Industry Association of America is constantly developing controllable alternatives such as Liquid Audio, streaming media, and music files that ‘expire’ if a subscription is not renewed.

Lam and Tan question the practicality and appeal of these alternatives and believe that “the piracy issue can be alleviated through secure standards, legislation and education� (2001:67).

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Gal, T. Singer, H.M. and Laird, P. (2003) ‘The IP War – Apocalypse or Revolution?’ ACM Workshop on Digital Rights Management: Proceedings of the 2003 ACM Workshop on Digital Rights Management, pp.39-46.

Unlike many articles written on piracy, Gal, Singer and Laird acknowledge the significant damage online piracy is doing to the music industry and simultaneously maintain objectivity.

They suggest several ‘scenarios’ to combat piracy, such as pay-per-song, copy-preventing encryption and subscriptions. These suggestions are evaluated for practicality in society and its technological, legal and business implications.

Gal, Singer and Laird also focus on the reality of whether these scenarios will be effective in today’s world and compare it against the appeal of free, but illegal mp3s.

Will legitimate downloads stop or decrease ‘music stealing?’

While one highly doubts that students (who make up the majority of downloaders), will be willing to pay for what they can virtually get for free (plus whatever Internet connection fees, which are likely to be paid by their parents), recent developments might push them along the legit road.

The Recording Industry Association of America, infamous for its huge court battle to shut down Napster, has prosecuted teenagers for illegal downloads. Many contemporary artists such as Metallica and Chad Kroeger (Nickelback) have also spoken against the practice.

Whether teenagers are likely to be worried about lawsuits is debatable, but perhaps purchasing mp3 files that are guaranteed to be of good quality without skips and distortions, will attract them. By buying digital music, they won’t need to worry about the viruses and spyware of many file transfer programs.

One can’t help but wonder how kids will pay for legit recordings, particularly those with five-dollar allowances. Will legal downloading be another money-making strategy to drain dad’s credit card?

Christelle Tan 11:02, 13 Aug 2004 (EST)

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