Is it wrong to download - Part 4: Lies, Lies, Lies

Timpane's picture

All of this speculation is based on the idea that downloading is directly responsible for a decline in CD sales. The RIAA and similar groups such as "The International Federation of the Phonographic Industry (IFPI) blame unauthorized downloads from online networks like Kazaa and Morpheus for a 20% drop in CD sales over three years" (Anonymous, USA Today). Is the downloading phenomenon actually responsible for that kind of monetary loss?

Experts say no. "Harvard and the University of North Carolina-Chapel Hill issued a joint report saying that unauthorized downloaders had a "limited effect" on CD sales" (Anonymous, USA Today). Extreme Tech Journalist Dave Salvator expounded further on the study:
"While downloads occur on a vast scale," the study's authors conclude, "most users are likely individuals who would not have bought the album even in the absence of file- sharing." The study goes on to say "...it would take 5,000 downloads to reduce the sales of an album by one copy....After annualizing, this would imply a yearly sales loss of two million albums, which is virtually a rounding error." One could also reasonably infer that since most file sharers would not have bought the album they're downloading if file sharing didn't exist, it's quite plausible that those very users liked the album they downloaded well enough to actually buy a CD they would not have otherwise bought. (Salvator)

In 2002, Jupiter Research analyst Aram Sinnreich found in another study "that people who traded files for more than six months were 75 percent more likely than average online music fans to spend more money on music" (McGuire).
Boycott-RIAA noted that the case could be made "in cold, hard numbers that the RIAA's claim of digital piracy ravaging their sales must be taken with a rather large grain of salt" (Moore). They point out that the RIAA is down 11.94% in a market in which "the Dow Jones Industrial Average (DJIA) has dropped over twenty percent in the last two-and-a-half years; the NASDAQ has lost over seventy percent of its value"(Moore). Indeed, a Reuters article on CNN.com noted "poor economic conditions and competition from video games and DVDs" as further contributing factors to RIAA monetary woes.

The evidence seems to suggest that the music industry is faltering along with the economy, and the RIAA places the blame for this squarely on the backs of music downloaders. This is simply not true. A study conducted in January of 2004 shows "album sales were up 9.2 percent. Sales of CDs rose 10.6 percent(and) the numbers of 2003 were down about 10 percent to 12 percent from the year before" (Viega, 19, Apr.). What is interesting is a trend that shows that the number of people engaging in file sharing is "down 41 percent from its peak of 34 million in June(2003)(but has) swelled (again) to 23 million, an increase of 28 percent since the last survey in December" (Chmielewski). If the RIAA had a 10 percent loss as downloads declined, and has reported a 10.6 percent gain this quarter, as downloads have increased 28 percent, it would seem to indicate that downloads are not hurting retail music sales.

If downloading music does not hurt artists, consumers, or record companies, and if music retailers are being phased out in favor of alternative CD markets, which are thriving, I find it hard to accept the notion that it is "Wrong" to download music. This is not piracy. This is not stealing. Consumers get more choices and lower prices. Artists get greater concert turnout. Record companies are able to offset declining profits by offering paid services, and there is evidence to suggest that downloading actually helps album sales.

When rounding out my research, I found a list of solutions to the downloading problem that would be good for the consumer as well as the record companies. There are also non-litigious deterrents such as Macrovision encoding (Finn) and high quality DVD audio, that have actually seen profits rise as record companies scramble to deter people from downloading music.

In researching this topic, I found that the insipid twisting of facts by the RIAA is enough to make me upset at the entire industry. One comes to the entertainment industry as a whole with a degree of trepidation, but I never expected to find the practices I did. I was shocked to see the price fixing, the lack of data backing the industry's position on artists, the blatant lies on the RIAA website about how the consumer is hurt.. all of it.

As for my position, I believe more strongly now than ever that the recording industry in its quest for profit has acted insidiously to undermine peer-to-peer file sharing, not out of a sense of being stolen from, but out of a need to control the material, make an excuse for lack of quality product, and squeeze profit from other industries by acting in bad faith. I believe it can be confirmed that file sharing, the involved technology, and the possibility for exposure on the internet can be a boon to non top-ten acts, and a miracle for small bands like Wilco. Finally I believe that the actions of the RIAA in congress and in civil court are inappropriate and unwarranted, where I once I thought they were just being too tenacious. I have seen a very shady industry for what it really is in researching this paper, and I hope that when it is finished, my readers will too.

SOURCES:
Ahrens, Frank. "Music fans find online jukebox half empty." Washington Post 19 Jan. 2004.: A1+
Anonymous "Charges of song swapping go global." USA Today 31, Mar. 2004.: Money 4b
Tompkins, Al "Thursday Edition: Sky high ticket prices". Poynter Online. 31, April 2004. (http://www.poynter.org/column.asp?id=2&aid=63338)
McGuire, David. "Study: File-Sharing No Threat to Music Sales" Washington Post.Com 29, March, 2004 (http://www.washingtonpost.com/wp-dyn/articles/A34300-2004Mar29.html)
Salvator, Dave. "RIAA hit from two sides." Extreme Tech: Yahoo! News 8, Apr. 2004. (http://news.yahoo.com/news?tmpl=story&cid=1738&u=/zd/20040409/tc_zd/1239...)
Viega, Alex. "Universal to raise price of CDs by one dollar" Yahoo! News 16, Apr. 2004. (http://news.yahoo.com/news?tmpl=story&u=/ap/20040416/ap_en_bu/universal_...)
Viega, Alex. "US Music sales increase in first quarter of 2004" Houston Chronicle Online 19, Apr. 2004 (http://www.chron.com/cs/CDA/ssistory.mpl/ae/2503136)
Taylor, Chris. "Where the money goes: A breakdown of the 19.95" I wrote the book. Date unknown. (http://www.sandersontaylor.com/book/CTmoney.html)
Anonymous. "Press release: Record Companies Settle FTC Charges of Restraining Competition in CD Music Market" Federal Trade Commission. 10, May 2000. (http://www.ftc.gov/opa/2000/05/cdpres.htm)
RIAA Online Newsletter. 30 Mar. 2004. Recording Industry Association of America. 22, Apr. 2004 (http://www.riaa.com/news/newsletter/033004.asp)

Boycott RIAA. 2003. Boycott-Riaa.com: Taking a Stand against the Recording Industry Association of America. 23, Apr. 2004 (http://www.boycott-riaa.com/)

Anonymous. "What the RIAA is doing about Piracy" RIAA.Com 21, Apr. 2004 (http://www.riaa.com/issues/piracy/riaa.asp)
Bell, Mike. "Everything Barenaked" Calgary Sun Online. 27, March 2004. (http://www.calgarysun.com/cgi-bin/niveau2.cgi?s=arts&p=82955.html&a=1)
Flynn, Laurie. "Sales Abroad Help Amazon Post a Profit in 1st Quarter" New York Times. 23, April 2004. (http://www.calgarysun.com/cgi-bin/niveau2.cgi?s=arts&p=82955.html&a=1)
Ryan, Maureen. "Copy Fight: Two veterans of the internet wars debate the raging battle over who should control our entertainment." Chicago Tribune 28, Mar. 2004 (http://www.latimes.com/business/chi-0403280175mar28,1,7367285.story)
Chmielewski, Dawn. "Music downloads on the rise again."
Mercury News 26, Apr. 2004 (http://www.latimes.com/business/chi-0403280175mar28,1,7367285.story)
Finn, Bridget. "Coming Soon: The Untouchable CD." Business 2.0 Sep. 2003, Vol. 4, Issue 8 Accessed from EBSCO Host 19 Apr. 2004
Boehlert, Eric. "Suit: Clear channel is an illegal monopoly" Salon.com. 8, Aug 2001. (http://archive.salon.com/ent/clear_channel/2001/08/08/antitrust/print.html)
Moore, Justin. "RIAA vs. the economy." Boycott-RIAA.com 2002. (http://www.boycott-riaa.com/education/analysis)

Other Websites used:
www.timpane.com
www.amazon.com
www.wherehouse.com
www.towerrecords.com
www.walmart.com