The Internet And The Music Industry: Friends Or Foes?

When Radiohead decides to release their latest album online and let consumers decide how much they wanted to pay for it, some wondered if they were marketing geniuses, or about to lose a huge amount of money on a publicity stunt. After all, this kind of music distribution lies at the center of a major controversy: is free music available over the Internet a benefit to the music industry, or a major source of lost revenue? On the one hand, it can be argued that when consumers can get a free download of some songs, then those consumers are more likely to buy the entire album, or buy other songs from the artist, as well as potentially going to concerts and buying other merchandises. On the other hand, there are many within the music industry who feel that any time a person downloads a song for free, without the consent of the people or company who own the rights to that song, it is theft. Without a comprehensive solution to the problem, illegal file-sharing will continue, and record companies and artists will not earn all of the money they are entitled to from the works they create and promote.

Taking a look at Radiohead's approach, one might simply say that such choices can be left up to the artists, as well as to the consumers. Unfortunately, there are a huge number of problems with such an approach. First and foremost, the artists are not necessarily the owners of any given song; nor are they the only ones who have a financial stake in songs, albums, and downloads. As Paul McGuinness, manager of U2 explains, the people who stand to lose or make money on music that is produced anywhere other than a particular artist's or band's own home operation, extends from, "The artists to producers, managers, tour promoters, and people who work for performance venues", and also extends to store owners where music is sold, the owners of websites where music is sold, the vast number of people working for entertainment and recording companies, the Internet Service Providers (ISPs), radio and television stations that use the music for their content to attract listeners or viewers and advertisers, and the list goes on and on. In addition, even if artists were willing to sell their music at a particular price, or give it away, the still do not have control over what will ultimately happen to it, since it is so easy for people with the right technology to convert files to a format that can be shared over the Internet. McGuiness also states that even though Radiohead offered its new album for free, people still downloaded it from sites where music is available in illegal copied formats.

But really, how big of an impact is the Internet and illegal downloading, having on the music industry? It is possible to compare the issue of illegally downloaded music files to the same kinds of issues that came about when cassette tapes were first being sold, and people could tape songs off the radio, or tape albums and share them with their friends. Similarly, anybody with a CD burner on his or her computer can copy any album over and over again, and give those copies away, or even sell them illegally. Still, because people can obtain copies over the Internet, rather than from their friends, it is possible for thousands upon thousands of illegal copies to be made from a few sources, rather than, for example, a few friends to copy each others' CDs.

Of course, Internet file sharing is not the only reason that record company sales have been declining. It is possible to consider a variety of reasons for the decrease, for example, Michael Geins explains that, "The pricing pressure has had a dramatic impact on the revenue generated from each CD sale", that is, stores like Wal-Mart keeping prices below a certain level, to competition between multiple forms of media, to fewer new releases being offered. So it may be, for instance, that consumers only have a certain amount of money to spend, and if they spend that money on a DVD or a video game, that is less money to spend on CDs. As Michael Geins explains, "The popularity of DVDs is surely related to the decline in CD sales and the shrinking shelf space allocated to CDs by music retailers". Still other questions to ask might be how the impact of legal Internet music sales services, like iTunes, impact the overall record industry sales. For instance, if consumers can buy one popular song for 99 cents, rather than buying an entire album for roughly fifteen dollars, or even a CD single for four or five dollars, then there would potentially be a loss of revenue from these legal ways of getting music.

The music industry has pursued many lawsuits and other legal attempts to try and stop illegal file sharing of copyrighted music. For instance, European court lawsuits have been aimed at, "Forcing ISPs to disclose Internet users who are using illegal file sharing programs". Even when such lawsuits are succesful, they have not had the impact of shutting down illegal file sharing of music. People are left to debate whether the music industry really is losing money in the way it says it is, and for the reason it says it is, or if it is just an attempt to control distribution, or earn more money off the same old material. The question is not an easy one to answer, but tend to side with those who stand to lose money from people using their work without having provided them with compensation.