The Future of Online Music Piracy

Ok now, time for a little confession. Here I am writing about the issue of music piracy and how to deal with it when I myself have in the past, back home in my country when I was an undergraduate student, been to some extent a 'pirate'. I was exposed to the enornmous repercussions of our little actions of piracy on the music industry while studying the course on 'Legal Environment in Business' and the statistics were shocking. According to the Recording Industry Association of America, global music piracy causes $12.5 billion of economic losses every year, 71,060 U.S. jobs are lost, a loss of $2.7 billion occurs in workers' earnings, $422 million in tax revenues, $291 million in personal income tax and $131 million in corporate income and production taxes.

There are various forms of music theft: individuals who illegally upload or download music online, online companies who build businesses based on theft and encourage users to break the law, or criminals manufacturing mass numbers of counterfeit CDs for sale on street corners, in flea markets or at retail stores. In the past, companies like Apple used DRM (Digital Rights Management) Software to limit the number of copies of a music file that a user was permitted to make. However, in January 2009, Apple announced that it would remove the copyright protection wrapper from every song in its store. Today, Amazon and Walmart both sell music encoded as MP3s, which do not possess copyright-protection.

Recent court rulings have helped to strenghten the move against music piracy and according to Paul Boutin of Wired Magazine, "The age of stealing music via the Internet is officially over". In November 2010, a US jury ordered a Minnesota woman to pay 1.5 million dollars for illegally downloading 24 songs in a high-profile digital piracy case. In June 2009, a jury ordered Thomas-Rasset to pay 1.92 million dollars or 80,000 dollars per song - to six record companies: Capitol Records, Sony BMG Music, Arista Records, Interscope Records, Warner Bros. Records and UMG Recordings.

The music industry has also taken several measures in this direction, which include deploying investigators in cities across the country, educating fans about the value of buying music and licensing digital partners that offer a range of legal models to fans. Most download retailers send about 70 percent of each sale to the record companies that own the music. Artists with 15 percent royalty deals get 15 percent of that 70 percent, or about 10.5 cents per dollar of sales. Thus, buying music directly helps not just the record companies but also protects the artists and safeguards the music community.

However, despite the actions by the courts and the steps taken by the music industry, several questions remained unanswered, for instance, how can the piracy of music be monitored? Though the court has taken strict actions against violators, will be ever be possible to actually track down all the violators? Also, what about the problems overseas, for instance in countries like India and China, which have little regulation when it comes to music piracy. What measures can be taken globally to protect artists and how? These questions will need time to be solved, but considering the positives steps that have been taken over the past couple of years in the direction of music protection, we have reason to be optimistic that the music industry will face less trouble in this regard over the coming years.

Sources: http://www.time.com/time/magazine/article/0,9171,1625209,00.html, http://www.wired.com/magazine/2010/11/st_essay_nofreebird/, http://www.physorg.com/news/2010-11-million-dollar-verdict-music-piracy-case.html