| Online Music Distribution – Napster vs. the Labels. It is the battle of the digital Millennium. The major music companies such as Sony and Universal have been fighting an unassailable contest against prevalent online music distributors, mp3.com and Napster. Since the introduction of digital music, the traditional music industry has been trying to persuade consumers there is a “monster in their computers” (Cloonan and Reebee 2003). With the establishment of online music distribution, record labels are becoming more wary of computer users sharing and downloading music tracks for free over the internet. These technologies, more notably Napster, mark the emergence of the Digital Revolution, transforming the overall production and consumption of music. Copyright Violation. It is a record label’s greatest annoyance, yet it is becoming more ubiquitous in contemporary society as ever. Many have investigated this legal issue, to discover that those perpetrators are merely frustrated music consumers. When the industry is charging more for cheaper-to-produce CDs than for vinyl records, it’s no wonder why the labels have become rather unpopular with consumers. Very few users that are downloading songs from the internet are deterred by copyright issues when they already feel exploited by the music industry. “In their attempts to curtail this development, the industry has adopted a two-pronged strategy of legislation and litigation, advocating for laws that extend the reach of copyright infringes. To date, Napster and MP3.com have been the prime targets of music industry litigation.” (Cloonan and Rebee, 2003) Napster.com is a self-proclaimed “person-to-person file sharing” site, dealing largely with mp3 music at the present time. However, in the near future Napster will incorporate videos, which then reveals the question – if music and videos can be peer-shared, then why not Windows 2000 as well? In the grand scheme of things, online distribution is obviously the way of the future. With this in mind, it would be wise for the major record companies to take advantage of this technology, rather then battling it. The potential of the music industry would far out-weigh its previous economic growth, if it were to collaborate with significant online distributors, namely Napster. It is evident that online distribution has a vast array of attributes, all of which are far more enticing to consumers than tradition methods. It is clear that the digital consumption of music is on the rise. “Music lovers have increasing choices about the way they buy and consume music. With nearly 500 online music services available in over 40 countries worldwide, consumers can access over 4 million tracks simply at the click of a mouse. This access is enhanced by the gains over the past few years in navigation and storage which creates a powerful user experience and has catapulted music into the digital age.” (M2 Presswire, April 24, 2007) Considering that almost every major development in the global music industry in recent years has been with digital music (M2 Presswire, April 24, 2007), should record labels be concerned for their economic welfare? A recent study, “Ipsos’ Tempo: Keeping pace with Digital Music Behavior”, reveals that the proportion of Americans who have purchased CDs in the past six months has dropped by approximately 15 percent since 2002. This statistic adds to the perpetual decline in the global music industry that totals to a 25 percent reduction since 2000. (Wireless News, May 6,2007). Taking this into consideration, the industry is anxious of the possibility that internet music file swapping will adversely affect CD sales. There is, however, evidence to suggest otherwise. The aforesaid study also reveals that “while this decrease is largely attributable to shifting consumer behaviours toward digital music acquisition methods, a majority of American Music Downloaders continue to purchase CDs by their favourite artists, and instead frequently rely on music downloading for sampling new and unfamiliar music.” According to a report from the analyst firm Berg Insight, ‘digital music sales will overtake physical sales in Western Europe by 2011. This year the report estimates that digital sales are going to account for a 10 percent of total retail revenues.’ And it is expected that by 2011, online music sales will contribute to 26 percent of all music purchased worldwide. (M2 Presswire, April 17, 2007) Therefore, if the internet is predicted to be a significant distribution channel for digital music, what will become of traditional ‘brick-and-mortar’ record stores? Fox predicts that ‘online music sites such as Apple’s iTunes, Napster and Sony’s Connect will have drained Virgin Megastores, HMVs and Tower Records of all their customers.’ In the long run, record labels and music retailers will be forced to become hip with technology, or face missing out sales. At the present time, Napster is in discussion with a variety of major music labels. Napster CEO Konrad Hilbers says that he ‘is confident licensing deals will result, letting Napster offer the full complement of mainstream music thought to be the key to any successful online music subscription service.’ Hilbers also states that, “Napster has the technology in place to deliver ‘major label’ content in a way that rewards copyright owners appropriately.” Therefore, ultimately everyone wins? The record labels continue economic success through the integration of digital technology, and online music distributors such as Napster retain their reputation for delivering what the consumers are after? Unfortunately, this is an incredibly simplistic approach to such a controversy topic. However, with thorough investigation, the tradition music industry combined with contemporary digital technology, has immense potential to redefine the production and consumption of music in the future. References Costello, Rohde, Ferrabti. (August 21, 2000). The E-Music Trap. InfoWorld, 22(34), 24. Dahl Eric. (January, 2004). Big-Time Music Services Arrive. PC World, 22(1), 42. King, Julia. (July 31, 2000). Napster Ruling reaches Beyond Music Industry. Computerworld, 34(31), 4. Kontzer, Tony. (November 5, 2001). Revamped Napster set to Launch Early Next Year. InformationWeek, 862, 73 M2 Communications Ltd . (May 6, 2007). Syudy: Proportion Of Americans Who Have Purchased a CD in the Past 6 Months Falls 15% Since 2002. http://proquest.umi.com/pqdweb?did=1264401071&sid=1&Fmt=3&clientId=13713&RQT=309&VName=PQD. pg 1. M2 Communications Ltd. (April 17, 2007). Research and Markets: Title: It is Expected that by 2011 Online Sales of Digital Music will Represent 26% of all Music Purchased Worldwide. http://proquest.umi.com/pqdweb?did=1256948831&sid=3&Fmt=3&clientId=13713&RQT=309&VName=PQD. Pg 1 M2 Communications Ltd. (April 24, 2007). Research and Markets: Record Companies’ Digital Music Sales are estimated to have Nearly Doubled in Value in 2006. http://proquest.umi.com/pqdweb?did=1259261591&sid=1&Fmt=3&clientId=13713&RQT=309&VName=PQD. Pg 1 M2 Communications Ltd. (April 24, 2007). Research and Markets: Title: Understand the Changing Dynamics of the Music Retail Industry. http://proquest.umi.com/pqdweb?did=1259509611&sid=1&Fmt=3&clientId=13713&RQT=309&VName=PQD. Pg 1 M2 Communications Ltd. . (May 3, 2007). Berg Insight: Berg Insight says digital music sales will overtake physical sales by 2011 http://proquest.umi.com/pqdweb?did=1264401071&sid=1&Fmt=3&clientId=13713&RQT=309&VName=PQD pg 1. Metcalfe, Bob. (August 21, 2000). Napsterization will mean boon times for musicians at every Ramada Inn. InfoWorld, 22(34), 84. Napster.com, May 5, 2007 Cloonan,M. Garofalo, R. (2003). Policing Pop. Temple University Press, Philadelphia. |
