File Sharing: A Positive Affect on the Music Industry

File Sharing: A Positive Affect on the Music Industry

When Shawn Fanning sat down to begin a sixty-hour programming marathon back in the fall of 1999, he did not know what he was getting into. Shawn's marathon was sparked by his struggles in downloading music on the internet via underground operations. His completed software, called Napster, allowed users to share and download music from each other's computers therefore eliminating the need for expensive servers. After just a few weeks, the Recording Industry Association of America (RIAA) sued Shawn Fanning and Napster Inc. and eventually won the case along with $36 million in damages (Napster). The question that has crossed everyone's mind is: did Napster's commencement of the file sharing revolution warrant $36 million in damages not to mention the thousands of RIAA lawsuits against everyone from children to grandparents that have followed? No. Sharing of music via peer-to-peer file sharing has positive effects on the music industry. Independent or "indie" bands that deserve publicity can now have their music heard by thousands of people without paying anything more than studio costs. Also, music sharing has spawned new billion dollar industries which have given jobs to thousands and boosted the economy. Finally, having the ability to download some songs from an album persuades file sharers to go and purchase the album.

Independent bands have benefited greatly from the mass-usage of music file sharing applications such as Napster. For example, a small independent rock group called Ten Mile Tide from San Francisco, California was able to place its first album on the internet in just a few minutes. In just a matter of months, they had received 8.6 million downloads of their songs and thousands of fan letters. Financial support accompanied these fan letters and, in August 2004, they were able to go on a national tour while still remaining unsigned. "What file sharing has done for independent bands is absolutely amazing," says bass player Jeff Clemetson (Band Praises Downloads and Online Support). Without file sharing, they would have been forced to pay thousands of dollars to market their album to music industry executives who may or may not feel that it has the potential to recover the production costs and earn a decent profit. For a band to distribute their music using file sharing, they only need to pay studio costs and place the file(s) on their computer, where it can be downloaded within a matter of minutes by anyone who comes across it. Music file sharing has positively affected Ten Mile Tide and countless other independent bands by allowing their music to be heard by fans.

Music filesharing and the ability to store entire songs in relatively small files have spawned a few new industries. Portable music devices such as the Apple iPod were created because of the plethora of MP3's and the ease of downloading. These devices are creating thousands of jobs. Also, with the need to make these new devices as small as possible, computer chip manufacturers are pushing themselves to improve their technology which is keeping the industry evolving. By 2008, portable music device sales are expected to rise to USD$58 billion per year (Sherwood). CD burning drives were very rare before file sharing but have since become very popular and much cheaper. They provide a great storage and distribution method for large files. Online music distribution is a very new industry (began in 2004) and is based around the concept that people would rather pay a very cheap price ($USD0.88 to USD$1.99) per song instead of paying a higher price for fifteen songs they don't actually want. Apple is the largest company in this market as well as portable market devices. They have sold 250 million songs at USD$0.99 per song as of January 24, 2005 (Smith). iTunes song purchases are rising to over 1.25 million purchases per day. Other online music distributors such as Microsoft and Walmart are not as prosperous as iTunes but this is definitely a beneficial market for them (Best). The RIAA takes a percentage of all sales of CD burners, portable music devices, blank discs, and all other music-related storage devices because of piracy, therefore, the music industry benefits from the spawn of these new industries.

The ability to download music does not hinder the ability to purchase music but does influence purchases of music in a positive way. From a seventeen-week study conducted jointly by the Harvard Business School and the University of North Carolina, the effect of music downloading on record sales was concluded to be "statistically indistinguishable from zero" (Strumpf). Online music sharing is seen by many as a way for people to try music before they purchase the CD. In the case of one of last year's best-selling artists, Norah Jones, research firm BigChampagne's CEO