File Sharing for Indie Artists.
Digital Millennium Copyright Act (DMCA), passed in 1998 was the most applicable and important legal foundation involved in the countless lawsuits related to file sharing. You may read about this in detail in my blog Technology and the Indie Music Industry. It prohibiting any circumvention of security technologies meant to protect copyright. The copyrighted work has since been effectively secured by DMCA and the Act has turned out to be very helpful for the entertainment industry.
Just around the start of the ‘dot com’ boom near the end of the millennium, there were a few failed attempts into experimenting with creating internet-based music companies. With the all-time low in record sales, labels started using the internet for minimal and wary, distribution of music and project promotion. However, the arrival of P2P file sharing technology, introduced by Napster became the true impactful development, appropriately at the turn of the millennium. this millennium brought with it a unique and difficult set of challenges; not just for the indie music industry, but for nearly all the business industries. The advent of internet and its prevalence has had a wide range of implications on how work is done. Today, a large part of academic literature in the music industry focuses specifically on the negative impacts of file sharing on the internet and resultant loss of sales in the recording sector. I have written about this in detail in my blog Indie Music Industry.
The file transfer protocol (FTP) was being used in a variety of legal and illegal ways to share files for nearly thirty years, and was no more a new phenomenon by 2000. It was used by scientific researchers in the ‘80s and ‘90s to share data sets. The teenage hackers employed it for piracy of mostly software and images, which made it popular on online forums. Some of early internet users also used it for MP3 files. 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. Napster could not be held liable for infringement of copyright as files were not actually held on Napster’s server. Instead, Napster only kept a list of its users’ file names in a compiled directory. Users were required to search for a song that they wanted and download the MP3 file directly from the fellow file sharers subsequently.
It used to be the record companies to hold the oligopoly position for over half a century. They traditionally reaped benefit of music sales quite disproportionately, while musicians actually generated the majority of their income from sales of concert tickets. The shifted dichotomy after the advent of internet may be the result of growth in the live music sector and had interesting implications on potential alternative business models and indie artist welfare in general. Most of us have read academic literature largely narrowing down the focus on the impact of illegal file sharing on the music industry and sale of record music. However, as I have written in my blog Indie Music Industry, the impact of the internet has expanded well beyond illegal downloading, as technological change continues at a rate never seen before.
Napster gained overnight success with an impressive user base of 80 million in its firsts 16 months, due to the application’s handy interface and powerful technology. Apart from the young adults, college and high school students, who formed majority of user base for the application, it was also noticed by The Recording Industry Association of America who filed suit against Napster in San Francisco federal court in December 1999. This suit, representing major labels, which later became a highly publicized legal drama, alleged Napster for contributory copyright infringement. Legal troubles withstanding, the suit worked in favour of Napster and got it the first venture capital investment. In May of 2000, Hummer Windblad invested $15 million in Napster and assigned it its first professional CEO.
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