Effect of Piracy on The Indie Music Industry.
RIAA’s success in shutting down Napster did not stop countless other sites from utilizing the new technology. As discussed in my blog Indie Artists and Record Labels, initially, it was relatively easy to legally quell and trace the file sharing piracy methods, however, when an undergraduate student at Northeastern University, Shawn Fanning, launched Napster, it made tracing piracy difficult because the system hosted files from millions of individuals and did not store music on its server. After Napster shut operations in June 2002, after losing the copyright infringement suit by RIAA, other sites started using its technology, after removing the main legal vulnerability that hurt Napster, by working on decentralized servers in peer-to-peer file sharing.
Programmes like Gnutella were more advanced form of P2P file sharing, directly connecting computers and actually creating a dispersed network which consequently removed the need for a centralized directory; unlike Napster that hosted file names on its own server. However, in 2003, RIAA again filed a suit, this time against individuals who had used Kazaa, the P2P program, to share large number of files illegally. While the system was difficult to fully shut down due to its diluted nature, the record companies (again) managed to win large settlements from these cases.
As discussed in my blog Legal Foundations of The Indie Music Industry, the rise of online peer-to-peer file-sharing services such as Limewire, Napster and Kazaa at the turn of the millennium, led to the prediction that like other entertainment sectors, the music industry, including indie music and artists was headed for an impending doom due to catastrophic losses in sales. RIAA won a few cases of copyright infringement filed against platforms like Napster, however, its greatest victory came against Grokster, another decentralized file sharing program in which Grokster continued to be found not liable for copyright infringement multiple times. The case eventually reached the U.S. Supreme Court where Grokster, like Napster, also focused on the Sony vs. Universal City Studios case. Arguing that the platform was not solely meant for piracy, Grokster presented possible legal applications of its service in an attempt to justify its position. However, the supreme court pointed that decision in the Sony vs. Universal City Studios case had stated that the equipment must have “substantial” legitimate uses and that if the platform’s primary function contributed to copyright infringement, providing an alternate use was not sufficient.
Experts claim that while it was simply impossible to eliminate the presence of music piracy, as technology continued to improve, RIAA’s efforts were certainly effective in combating it. While digital file playback was made uninterrupted and smooth due to advances in personal computer processors making them sharp and steady, hard drives and other storage devices for personal computers became portable and expensive due to their capacity of holding large amounts of data. During the 1990s, along with the invention of hard drives, also relevant was the introduction of fast connecting external products such as USB and FireWire, that allowed hard drives to transfer files quickly. Later, it became the basis for portable MP3 players. With all these inventions leading to increase in piracy, in spite of RIAA being constantly vigilant, P2P file sharing, continues to advance in more difficult to trace methods.
The Legal Digital Distribution
Initially, DMCA deemed companies related to digital music as illegal because of which, in the 1990s, most companies trying to create a business model specifically around the distribution of digital music failed in their attempt to do so. However, services that did not find widespread usage, like subscription distributors, were able to survive in the same era, but the record companies made it difficult for them by not justifying their subscription fee and providing a limited selection of songs due to their anxiety about the security of internet.
While all of this was happening, nobody would have thought that Steve Jobs, the late visionary heading the rapidly rising personal computer company Apple would soon bring about a complete transformation in the legal digital distribution of music by changing the approach from subscription to purchase! The launch of Apple iTunes in 2004 led to the rise of legal digital distribution, and has potentially offered a way for record labels to recover a portion of their displaced sales, adding a level of complexity to the market. You may read about this in detail in my blog Indie Music Industry. The social media trends associated with the rising use and popularity of the internet has also been an important factor with online music communities beginning to form.
In my next blog I am going to write about the industry’s reaction to the launch of Apple and iTunes.
Please leave advices in the comments section and I will incorporate them in my future blogs.
