Is it wrong to download – Part 3: The Victimless

Is it wrong to download – Part 3: The Victimless by Timpane With so many reasons to make people file-share, is there a good reason not to?”

The answer: only if there is compelling ethical or moral reason not to file share.

I began my research by going straight to the source, the website of the RIAA, www.riaa.com, which had this to say.

“(Music downloading) is illegal, unethical, and all too frequent in today’s digital age. That is why RIAA continues to fight music piracy. Many do not understand the significant negative impact of piracy on the music industry, depriving not only the record company of profits, but also the artist, producer, songwriter, publisher, retailer, and the list goes on. The consumer is the ultimate victim, as pirated product is generally poorly manufactured and does not include the superior sound quality, art work, and insert information included in legitimate product”

The main claims made by the RIAA seem to be these: 1) Music downloading hurts artists 2) Music downloading hurts consumers 3) Music downloading hurts retailers. 4) Music downloading hurts record companies, who are faltering as a result

I set out to discover if these claims were true. I began my search by seeking out articles that confirm or deny that downloading music hurts artists, which is the most morally compelling reason to forbid the actions of peer-to-peer downloading. Being that I had the RIAA’s opinion, I went to their opposition first.

Boycott-RIAA had this to say about artists and file sharing: “We (the founders of Boycott-RIAA) are very pro-artist. We are anti-exploitation of musicians, we are anti-loan shark business practices by the industry labels, but we are definitely ANTI-RIAA. The issue is NOT so much Copyright but CONTROL of distribution. The industry doesn’t want more music available but less. (unless it’s on their label). (http://www.boycott-riaa.com/artists)”

Chris Taylor of Sanderson Taylor Entertainment Lawyers breaks down what the artist belonging to the Major labels gets paid $1.31 per twenty-dollar CD. (Taylor) Therefore, if one were to look at a moderately selling CD such as Barenaked Ladies’ “Everything to Everyone”, which debuted in the top 10, but only sold 300,000 copies (Bell), and were to factor in the 20% loss in CD sales reported by the RIAA, that would mean that the band itself lost $78,600 in CD sales. This is assuming that downloading is to blame for 100% of music sales drops, and that the RIAA figure is correct.

Even so, concert ticket sales (based on prices, not attendance) have jumped “8% over the previous year” (Tompkins). “All but the very biggest pop acts make most of their money off concerts, not CD sales” (Boehlert). If this is the case, with average ticket prices of 52 dollars, (and Barenaked Ladies tickets selling at Ticketmaster for 25-50 dollars,) it would only take a slight percentage of swelling in concert sales either by 1% of each show or one dollar per ticket for one tour to offset the loss of sales represented by downloading even by the industry’s most pessimistic estimates.

Anecdotally, my first copy of a Barenaked Ladies’ album was a taped copy, and I gave many copies of that copy to people who then became fans. Years later, I myself have attended numerous concerts by the band, and have seen people at said concerts to whom I had given copies of that one original tape. All of this spawning from one unathorized copy. At the time of this writing, there were over 2000 Barenaked ladies MP3s being shared on Kazaa, most of them from the band’s back catalog. It seems undeniable that this sort of exposure could raise concert attendance or ticket prices by well more than 1%.

What I could not find was any clear evidence that the artists themselves were being hurt, outside of speculation by some artists with unsuccessful albums using downloading as an excuse for poor album sales, or incredibly successful artists (such as Eminem and Metallica) who are selling in such high amounts that their CD sales outweigh their concert tours. These bands make up less than 10% of the market. There has been outcry on both sides of the issue, with the independent artist claiming that the peer-to-peer phenomenon is just a leveling of the playing field.

Law professor Lawrence Lessig has said: “Now the point is, (The RIAAs) old business model wasn’t better for the artists and it wasn’t better for consumers, it was better for big record companies. When people talk about alternatives to that model, serious people are not talking about alternatives that make artists worse off and they’re not talking about alternatives that would make consumers worse off, they’re talking about alternatives that might make five companies worse off” (Ryan).

Record producer Ken Waagner cites that a band called Wilco, whom he represents, has actually seen audience size and CD sales surge since they began offering free copies of their music online. (Ryan)

So, if downloading doesn’t hurt the artists, this brings us to the RIAAs claim that file-sharing hurts consumers. As a frequent purchaser of CDs, this is an issue I took to heart.

It is in this claim that the RIAA’s claims are the most egregious. The RIAA cites only two ways music downloading hurts consumers: Inferior sound quality, and driving up prices. On one page of their website regarding the subscription services for downloading music online, the RIAA says: “The possibilities are great for the music industry: fans, artists, and record companies alike”. (http://www.riaa.com/issues/music/default.asp) . On another page, the RIAA says “The artists also depend on their reputations, which are damaged by the inferior quality of pirated copies” (http://www.riaa.com/issues/piracy/default.asp). These arguments seem to be at odds with one another, as the sound quality of the files in question (most in mp3 format with 128 to 160 bitrates) in both paid and peer-to-peer services is 99% of the time exactly the same. The RIAA website also states: “Consumers also lose because the shortcut savings enjoyed by pirates drive up the costs of legitimate product for everyone.” (http://www.riaa.com/issues/piracy/default.asp)This statement is entirely untrue. Although there has been a recent nominal upswing in prices, the recording industry’s most powerful member, Universal Music group “reduced its suggested retail price from $18.98 to $12.98 just three months (ago) stimulating sales that had been down for three years” (Viega, 16, April 2004).

The RIAA has stated that music quality and increased CD prices are the two ways downloading hurts the consumer. If downloading MP3s by subscription is not a problem with the and CD prices have fallen (after their initial spike due to price fixing) as downloading has gone up, then both of the RIAA’s arguments regarding damage done to the consumer are voided.

I decided to not spend too much time on whether or not retailers are being hit by the decline in CD sales. The fact is, the traditional music outlet charges more than the larger multi faceted chains like Wal-Mart. (Compare the price of the aforementioned “Everything to Everyone” album at 15.99 at Tower Records, 15.49 at Wherehouse, and 13.42 at Wal-Mart).

The truth is, the day of the “Record Store” may indeed be fading into the past. With chains like Wal-Mart showing 53 billion in profit (Moore), and offering paid music downloads to boot, and online stores such as Amazon.com boasting record sales, the argument that record stores are losing money because of music downloading is shaky.

This brought me to the big question, on which all the other questions hinged.

Does file sharing affect the bottom line of the record industry?