Internet File Sharing - Separating Myth from Reality

Myth

Downloading music for free doesn't give rise to any problems.


Reality

It is a common misconception that accessing so-called 'free music' - by downloading or burning music from the internet without the creator's permission and without paying for it - doesn't really hurt anyone.

Nothing could be further from the truth. Unauthorised uploading or copying is not free at all - it is the musicians and the people who invest in the music who are paying the price. The artists, first and foremost, the labels that have invested in them, the publishers who manage the copyright of their songs and the thousands of people involved in the many different areas of the music industry are all affected. Downloading and burning without permission doesn't fairly reward the efforts of those who create, develop and record music, and who depend on it for their livelihood.

More illegal copying and internet distribution means less sales, and that means less money for companies to invest in artists and music. This affects a whole community of people: the employee at the retail store that faces closure; the aspiring artist who won't get a deal because record companies have less money to invest in new talent; and the artist whose first album just failed to sell enough to turn a profit. On top of that, there are the thousands of other people who depend upon music for their income: from the sound engineers and CD factory workers to the band managers and graphic artists. There are also countless music magazines, entrepreneurs trying to set up legitimate online sites, designers, specialist PR people the list goes on.

Furthermore - copying music without permission is illegal. And just because it doesn't involve organised crime or knock-offs sold on street corners doesn't mean that it isn't taken very seriously.


Myth

Most recording artists are doing very well, so downloading a few tracks for free is not going to hurt them.

Reality

The overwhelming majority of artists are NOT rich. And it's not just a few tracks that are being downloaded illegally from the internet - it's millions of tracks. The biggest losers from internet file sharing are the upcoming artists because not paying for music means much less money to invest in them. Fewer artists get the chance to make their mark, and the labels are less likely to take a risk with more experimental music or niche genres. This means it's the music lover who gets short-changed. Consumers of 'free music' may get a short-term benefit, but at the long-term cost of hurting the artists they most admire, and new talent.

People who accuse the music industry of not producing anything new should give some thought to how internet file sharing impacts new artists. Think of the bands - and there are many, including Cold Chisel, INXS, Midnight Oil, Split Enz and Powderfinger - who didn't make it big with their first or second album. Bands need time to flourish, and if their early sales are cannibalised on the internet, they may never get the chance to become the next INXS or Powderfinger.


Myth

Unauthorised copying doesn't have any measurable effect on the music industry.

 

Reality

There is consistent evidence throughout the world that unauthorised copying and distribution means less music is sold. The Australian industry has yet to experience these impacts to the same degree as other territories. This has been due, in part, to the delayed take up of broadband internet access in Australia . However, if steps are not taken now, the international experience could well be replicated in Australia .

Perhaps the most worrying development is that the majority of people downloading music from the internet are young music fans, who are also the biggest consumers of music. In a survey commissioned by ARIA in 2003, those who engaged in internet file sharing reported a net 12% decline in their CD purchasing behaviour as a direct result of that activity.   There are similar findings all around the world.

Myth

Downloading for free benefits artists as it gets them heard which promotes their music and boosts sales.


Reality

We support the use of promotional material made available for free download - but only where the artists and copyright owners have authorised it for this purpose. This must be a choice that they make, not one forced upon them by others. Making music available on the internet is a really exciting development for artists. The internet can be a great tool for new acts who wish to drum up interest in their work.

However, it isn't true that making music 'free' will always promote the sales of that track or album.   In fact, research all around the world shows that downloading and burning is substituting sales significantly more than they are promoting them. Research in Australia commissioned by ARIA in 2003 shows that many active file-sharers spend less on music since they started getting it for free and that they reported an overall 12% decline in purchasing behaviour as a direct consequence of file sharing.

It is those members of the general public who think that they have the right to 'share' music with millions of individuals without having paid for it (and contrary to the wishes of the copyright owner, recording artist and songwriters) that are damaging the music industry. As a consequence they are threatening the careers of budding artists before they even begin.

Myth

The music industry wants to stop the advance of technology.

Reality

Technology is not the enemy of music - quite the reverse. There has always been a healthy relationship between advances in technology and the music business: from the Edison cylinder, through vinyl, tape and the CD. The impact of digital technology has opened doors for artists and many others involved in music; allowing more experimentation and sophisticated home recording, online real time musical collaborations, webcasts, enhanced sound - and the ability to share all that with a wider global audience.

The music industry will always make use of new technology - for example Super Audio CDs and DVD Audio, as well as the opportunities that new 3G phones bring. Technology is also helping the industry to transfer thousands of tracks in artists' back catalogues into digital format. And, of course, the industry both here and internationally is enthusiastically supporting the development of legitimate online retailers.

But while the methods of recording or distribution might change, what doesn't change is the fact that artists and those who work with them depend upon copyright and getting paid for their livelihood.

Myth

There are no legitimate services currently available in Australia.

 

Reality

There are already legitimate online retailers offering hundreds of thousands of tracks from all the major record companies and many independent labels. No doubt, others will also commence operations in the near future.


These sites offer better quality of product and service than illegal alternatives. Many are now offering transfer to portable devices. They are not, however, progressing as quickly as hoped because of stiff competition from free music infringers who have sidestepped all the complex licensing and consent processes needed to offer the recordings legitimately.

Myth

Nothing can be done to stop illegal downloading.

 

Reality

Illegal downloading is a huge problem, but the industry is committed to successfully addressing it. As most people know, the record industry has been involved in internet based litigation, and continues to be involved in litigation, both here and elsewhere around the world. While much of that litigation has been against file sharing networks and their operators, in some territories the industry has also taken legal action against individuals who upload substantial quantities of infringing music. But that's not the industry's only initiative to address the problem. 

The music industry has launched many initiatives to educate consumers and businesses around the world about the consequences of illegal online activity. Many people who enjoy music are simply unaware of the effect their actions have on bands and artists.

Everyone knows that one of the best ways to stop people from using the illegal sites is to provide them with good alternatives. Many companies are investing substantial sums in developing legal alternatives. However, all this takes time - it's hard to compete with something that's offered for free, but it is happening.

We're also seeing the start of new systems used for better electronic delivery of music. Digital rights management tools are being used to help track music online, so that everyone who is entitled to be paid for their efforts, is actually paid. New technology is also being used in ever more sophisticated copy control devices for music, similar to those already used on DVDs and computer software.

But there's more to stopping mass copyright theft than by just investing in new legitimate services. Indeed, those new services are not going to flourish if there isn't a fair space for them to develop without being stifled by online piracy.

Ultimately, none of this legitimate activity can take place without a strong legal framework to support it. Copyright laws exist to protect the rights of artists and those who invest in their careers, allowing them to determine whether and how copying, distributing, broadcasting and other uses of their works take place, and giving them the tools they need to take action against people who infringe their rights. Those who ignore copyright laws should not expect an easy ride.

Myth

Downloading is just like home taping.

 

Reality

File sharing via the internet cannot be likened to copying tapes deck to deck at home. That's like comparing someone physically copying a book to a printing house churning out hundreds of copies a minute of the same book - and then making it available to absolutely everyone around the world for free.

The damage this sort of copying causes to music is enormous. But it also presents other dangers to the unwitting consumer. If you use a peer-to-peer service, you open your computer and all the information you've stored in it up to hundreds of strangers - simply at the touch of a button. When you use a file-sharing service you may unwittingly be acting as a 'mass distributor'; as whenever you're online every other user around the world has the ability to access your hard drive. And this could lead to problems with your personal computer, including the transmission of viruses.

Myth

The record companies only have themselves to blame for not getting their artists' tracks online quickly enough.

Reality

While it is very easy for anyone to upload an MP3 music file onto the net and give it away for nothing, it takes time to do so in such a way that the online product is tracked through the process, with the artists, publishers, record companies, and retailers all being paid their share of the price. The systems for doing this have had to be created from scratch and there have been complex negotiations between all the relevant parties (including obtaining consents from artists) in order to get the music licensed for digital sale.

Second, it is not true to say that record companies have not got their music online quickly enough. The music industry is far more advanced than any other in terms of producing its product for digital sale. What is true is that the appearance of the MP3 file format has meant that the music industry has been forced to grapple with issues of theft of intellectual property on the internet far sooner than other industries. Unlike most products where the internet is simply used to help sell the physical product, with music the virtual online copy is practically the same as the physical product.

The speed with which the MP3 music files spread over the internet meant that as the music companies started to digitise their product, set up payment systems and invest in companies (some of which went bust in the early dotcom 'bubble') they were already in a situation where they were competing with freely available product. And trying to compete against an over 99% pirate market on the internet is very difficult. It is ridiculous to expect a record company who has to invest a huge amount in its artists to compete with a distributor who is giving music away for free.

 

The assistance of IFPI in creating this article is greatly appreciated.

 
Site Map | Search | Terms of Use | Privacy | Copyright 2005- © ARIA - Australian Recording Industry Association Ltd. All rights reserved.