Queensland Conservatorium of Music

Infotech Arts
10
Assignment
Due May 3, 2010
Matt Tierney
Possibly the biggest problem for the modern-day music industry
is that of music piracy. Every year, billions of CD’s are pirated
and passed on illegally, leaving artists all around the globe
penniless and without proper recognition... or so popular
opinion dictates. However, this study examines the notion that
artists are getting free advertising through a distribution
network far larger than ever imagined and are not actually
losing money at all. The study investigates whether or not music
piracy has an effect on artist’s income.
 Infotech Arts Assignment
Due May 3, 2010
Matt Tierney

Is Music Piracy Really Having A Negative Effect On

Artists?
Music piracy is one of the biggest and most widespread problems in the music
industry today. People from all around the world are “finding music at their
fingertips and taking advantage of it” (Ending Piracy: Legal Ways to Download
Music, 2003). Endless campaigns by the RIAA (Recording Industry Association of
America) resulting in thousands of lawsuits against offenders have made
headlines all around the globe. But is music piracy affecting the income for
artists from sales of recorded music? Before this question can be answered,
several more must be considered. Who pirates music, for what reason and what
part of the market do they represent? How much money does the music industry
lose through P2P (Peer to Peer) filesharing? Can music piracy be beneficial to the
artists in terms of the sales of their recorded music? Closer examination of these
questions will provide a more informed answer for this study.

Whilst the occasional article is printed on how music piracy does not lose the
music industry money at all, the general consensus is that music piracy is
throttling the industry and losing all involved considerable amounts of money.
“Make Your Own Song” adamantly suggests reporting any instances of file
sharing to help eliminate the music piracy problem, stating that “<music
piracy>... is really affecting how the music industry earns”, while Silverthorne
(2004) suggests that findings by the Harvard Business School indicate that very
little money indeed has been lost by the industry as a direct result of music
piracy. What is lacking in the existing literature, however, is a selection of
studies on music piracy and its affect on the industry.

So, who downloads music illegally and for what reasons? According to
Silverthorne (2004) and the study by the Harvard Business School, most P2P
sharing is done by teens in high school and university. These people represent a
very small part of the market for purchasing of legal copies of music for the
simple reason that they don’t have any money, and “wouldn’t have bought the
songs they downloaded” (Silverthorne, 2004). Another group of illegal
downloaders is the group known as the “samplers” (Silverthorne, 2004), who
download songs, then if they like the song, they will go out and legally purchase
the album, thus rendering their portion of the music piracy scene pointless in
terms of lost sales. There are those who still believe that music piracy is a
serious crime and should be dealt with in such a manner, however, as Nelson
(2003) states;

Queensland Conservatorium of Music | Semester 1 Assignment

 Infotech Arts Assignment
Due May 3, 2010
Matt Tierney

“A generation ago, theft was an embarrassing and serious crime. Now,

online theft of music is often thought of as a harmless act.”

Despite this statement, Nelson provides no proof or statistics to back up this

particular claim. Thus so far the notion that illegal downloading is crippling the
music industry seems unfair and incorrect.

How many people illegally download music and therefore what money are
individual artists losing? A report by the IFPI (International Federation of the
Phonograph Industry) found in 2000 that 1 in 3 CD’s is pirated worldwide, a total
of 1.8 billion units (Bishop, 2004). Taking into account that 10% of all CD’s are
given away free to distributors rather than providing a discount, and artists do
not get royalties on free CD’s, the average royalty of 8% to 25% for artists only
applies to 1.6 billion of these sales (Obringer, 2009). Therefore if each CD costs
$20, the artist is looking at losing $4.8 billion, matching up with Embleton’s
(2002) figures of $4.5 billion losses. Despite these figures however, the Harvard
Business School’s study into this concluded that although filesharing increased
over the period of their study, sales for legally obtained music did not change at
all and in fact slightly increased (Silverthorne, 2004). Therefore, despite figures
to the contrary, it would seem that the music industry is not actually losing any
money from illegal downloading and filesharing.

Can music piracy be beneficial to the artists and if so how? Silverthorne (2004)
suggests that, considering people generally download a single song rather than
an album, illegal downloading can be used more as a radio station which
promotes new music and brings new artists into the spotlight. Eran (2007)
references a survey by “Jupiter Research” which yielded surprising results; many
people surveyed claimed to have purchased more music than before they
started sharing files online, thus proving the aforementioned point brought up by
Silverthorne (2004). According to Heisel (2006), a poll held by “AP” indicates that
many people believe that bands should encourage the illegal download of music,
so as to get their music out in the public eye. There are even musicians who like
the idea of music piracy, as seen by a statement made by composer Madigan
Shive stating that illegal downloading of music is “one of the most positive things
to happen to music in a long time” (Dean, 2004). Therefore, music piracy most
definitely can and is beneficial to artists, especially new artists looking for an
audience, by circulating tracks to people who might not otherwise listen to them.

Queensland Conservatorium of Music | Semester 1 Assignment

 Infotech Arts Assignment
Due May 3, 2010
Matt Tierney

In conclusion, the main groups of people who download illegally for various
reasons do not detract from the legal sales of music. The music industry is not
losing any money as a direct result of filesharing and may in fact be gaining
instead. Finally, music piracy can in fact be beneficial to the industry by
providing an advertising net of immeasurable size. So, is music piracy affecting
the income of artists from sales of recorded music? The answer is yes, but the
effect is not necessarily negative. Filesharing and music piracy provides a
distribution and advertising network of unimaginable magnitude, giving up and
coming artists a very healthy starting point and fan base. Music piracy does,
however affect the income of artists from sales of recorded music.

Bibliography
Bishop, J. (2004). Forum: Who Are the Pirates? The Politics of Piracy, Poverty, and
Greed in a Globalized Music Market. Popular Music and Society , p101-106.

Dean, K. (2004, February 26). Wired. Retrieved March 14, 2010, from Wired Web
Site: http://www.wired.com/entertainment/music/news/2004/02/62434

Embleton, K. (2002). Downloading Illegal Music. Canadian Musician , p19.

Ending Piracy: Legal Ways to Download Music. (2003). International Musician ,

p15.

Eran, D. (2007, March 7). Is Piracy Really Killing The Music Industry? Retrieved
May 3, 2010, from Roughly Drafted:
http://www.roughlydrafted.com/RD/RDM.Tech.Q1.07/708F20CD-E67D-45C7-
AF95-3E1A6AC07C37.html

Heisel, S. (2006). Wiretapping: The "AP" Poll - Should Bands Encourage Illegal
Downloading? AP Alternative Press , p34-36.

Make Your Own Song. (2008, August 8). Retrieved March 14, 2010, from Make
Your Own Song Web Site: http://www.make-your-own-
song.com/2008/08/08/report-music-piracy-online-and-recommendations-for-
prevention/

Nelson, F. (2003). Official Reports: Piracy Threatens Entire Music Industry.

International Musician , p4.

Obringer, L. A. (2009). How Music Royalties Work. Retrieved May 3, 2010, from
How Stuff Works: http://entertainment.howstuffworks.com/music-royalties6.htm

Queensland Conservatorium of Music | Semester 1 Assignment

 Infotech Arts Assignment
Due May 3, 2010
Matt Tierney

Silverthorne, S. (2004, June 24). Harvard Business School: Working Knowledge.

Retrieved March 14, 2010, from Harvard Business School Web Site:
http://hbswk.hbs.edu/item/4206.html

Queensland Conservatorium of Music | Semester 1 Assignment