The Impact of Digital Audio on the Music Industry

Almost certainly the most notable digital download application is Apple’s iTunes. Designed in conjunction with the iPod, the website offers free software in order for users to organize, listen, watch, and play digital music, movies, television programs, podcasts, audiobooks, and also (big surprise here) has an app store.  Music downloads from iTunes cost users from .69 cents to $1.29.  Most of us have heard of Emusic, which promotes independent musicians for a price of $9.99 per month for 40 downloads.  And, of course, you have your Rhapsody’s, and Pandora’s, the digital radio mediums, along with Myspace and a number of other websites that will satisfy any person’s flavor or niche of digital audio selection.  These are all legal and/or pay sites offering digital media.

But what about Morpheus, Limewire, and MP3Rocket?  As notorious as they may be, these sites are not considered illegal websites, nor do they distribute illegal software.  The manner in which these programs are used is technically illegal, such as, if one downloads music without having bought the CD from a retail outlet or a pay website, it is considered piracy because the artist loses royalty fees, and therefore, does not get paid for that performance.  In my own opinion, the digital files are easily accessed, and as long as that is the case, the practice of downloading free audio will continue.  These websites make it easy, but if they were, in fact, disbanded, then violators would find another way.  They would simply burn and share with local friends in their homes, rather than downloading a digital audio upload from who knows what country.  People will find a way around it.  Today’s practice of digital downloading is comparable to dubbing your friend’s newest cassette tape or tape recording from your radio receiver back in the ‘70’s and ‘80’s.

Limewire, Morpheus, and MP3 Rocket are all websites that offer file sharing software, but claim they are not responsible for any illegal filesharing activity that is conducted with the use of the software.  Why hasn’t the government disabled the file sharing software websites, if it is an illegal activity?  Because enforcement of illegal file sharing legislation would also interfere with legal file downloads, as well as degrade our ISP service with encryptions, will require ISP funding, therefore, increase ISP fees for us ALL!!!  So, at this point, enforcing the current legislation is not feasible.  I do find quite amusing one of the file sharing website’s disclaimer.

MP3 Rocket’s Disclaimer:

All content are copyright and are owned by their respected owners. No files are hosted on our server. MP3Rocket does not host or upload any video, audio or game content. MP3Rocket only links to user submitted websites and is not responsible for the legality of third party website content. It is illegal for you to use MP3Rocket to share copyrighted files without permission. Downloading MP3Rocket does not constitute a license for obtaining or distributing unauthorized files. By downloading MP3Rocket you agree not to download copyrighted material”.

The International Federation of the Phonographic Industry published a report in January 2010 ( that “piracy is the major barrier to growth of the legitimate digital music sector and is causing severe damage to local music industries around the world”.  Good intentions are behind legislation such as “Electronic Theft Act (NET Act) of 1997” and the “Digital Millennium Copyright Act of 1998”, however, the statistics indicate that enforcement is not realistic.  The IFPI reports that 95% of all music downloaded worldwide is illegally obtained.  There were a handful of individual citizens charged with internet piracy in the late 90’s early 2000’s, but this practice has waned. The recently released IFPI digital music report 2010 showed that global trade revenues are up 12 percent to an estimated US$4.2 billion in 2009.  Licensed music services increased from 40 in 2003 to 400 in 2009.  Catalogue of tracks increased from 1M in 2003 to 11M in 2009.  Digital revenues saw an increase from 20M in 2003 to 4.2Bil in 2009.

The IFPI advocates piracy legislation, and despite positive digital industry increase in revenue, the report lends a great deal of spotlight on an overall decrease in music sales across the board and points to piracy as the culprit.  However, it is evident that the digital audio industry has found alternative and creative ways to increase revenue.  The development of new ways to access music include subscription services; devices and broadband bundled with music; streaming services with applications for mobile devices; advertising-supported services that upgrade users to paid-for premium offerings; and online music video.  The success in the digital audio realm has been staggering, yet the overall music industry still suffers with a decline of 30% for 2009.  They blame piracy, but are we forgetting that we have been in a recession for the past two years?  That is a little detail the IFPI has not addressed.  I am no expert, but my prediction would be that the music trade will continue to find innovative means in which to increase sales in the digital realm to the point that piracy will not have much of an affect on the music business as a whole in years to come.  We’ve not heard the squawking of artists in recent years, (at least not very loudly), so clearly modification is taking place within the industry.

Technology is a great and wonderful thing, but sometimes it creates unforeseen obstacles.  The industries that are affected gradually shift in order to adjust.  It may take some time, but they eventually bounce back, and find new ways to generate profits.  

One thought on “The Impact of Digital Audio on the Music Industry

  1. Good post! I like the images too. The ‘war on piracy’ will likely play out like the ‘war on drugs,’ war on terrorism,’ war on poverty,’ ‘war on… etc.’ You get the picture. There’s always an effort to contain the issue, but is something that be defeated entirely?

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