My friend Cody Willard is a hedge fund manager, focused on telecom and technology. He and I had an interesting public debate yesterday, on P2P, downloading and the music industry.

This was originally published on the (subscription only) RealMoney.com, but is reproduced here with permission. It got enough positive feedback that I thought Big Picture readers might find it intriguing. For your reading pleasure, Me vs. Cody. Enjoy!

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Cody WIllard  :   Piracy
Steals Music Companies’ Thunder

2/7/2005 1:23
PM EST

The effects of piracy on the economy and the world are just getting started.
Music company EMI told investors today that it would miss sales
projections for the year by about 9%. Trading in England, the stock took a huge
hit on the news, wiping out billions of dollars of value.

Music content sales such as records, tapes and CDs have long trended with the
broader economies. With global economies steadily growing the last couple of
years, the music business should have been on fire. Alas, that is not the case,
and the single biggest reason is piracy.

 

Guide PicksCody WIllard (Cont.):  Piracy
Steals Music Companies’ Thunder

 
Initially, the Recording Industry Association of America (RIAA) spent a long
time with its head in the sand as the nefarious iteration of Napster (as opposed
to today’s legal iteration of Napster) began to undermine the entire industry’s
model. Then, about five or six years ago, the industry decided that it should
fight the peer-to-peer (P2P) technologies like Napster that were enabling mass
sharing of pirated copies of music. Napster’s model was indeed illegal and
eventually shut down. However, in a clear victory for both technology and
freedom itself, the newer versions of P2P software aren’t illegal because they
simply enable people to freely trade data files without actually keeping track
of what those files are.

It’s not even really a fine line in my mind: If the technology provider, such
as Napster, is knowingly assisting in the trading of files by keeping a
centralized command of what files are being traded, it’s illegal. But technology
that simply enables blind trading of files isn’t. After all, if Gnutella
is liable for the illegal activities that users of its software partake in,
shouldn’t it follow that Microsoft (MSFT:Nasdaq
- commentary
- research) and Intel (INTC:Nasdaq
- commentary
- research) are, too? Heck, so is the power company and the
telephone company. And the vendor of the glass in the monitor. Where does it
stop?

Let’s be clear, though: It’s illegal — and flat-out immoral — to mass-trade
copyrighted material. We all accept that stealing a CD from our local record
store is wrong. So, too, is it wrong to steal the content in an MP3 file.
Nothing drives me crazier than the hypocrites who say they favor free markets,
but who rationalize the theft of music content. Free markets by their nature
entail property rights, and music content is a form of property according to our
law system. If you’re illegally downloading music, stop now!

Likewise, I often hear and read the argument that illegal MP3 downloading
actually drives sales. Even if that were true (which, as EMI’s and the overall
music industry’s sales trends obviously show, is decidedly not), that doesn’t
make it your right to violate the rights of the content’s owners. If they, in a
free-will choice, decide that it makes financial sense for them to allow their
music to be distributed in MP3 form for free, then go crazy and download. But
that’s simply not the case.

Other shills for content theft like to point to the parallels between the VCR
and P2P. Certainly there are similarities, such as the content providers
fighting against a technology that is enabling copying of their content. The
piracy advocates like to point out what a boon VCR and eventually DVDs ended up
becoming to the content owners. Those technologies absolutely did end up
generating all kinds of sales of content in the form of video sales and rentals,
and I would have blasted the industry for trying to shut down a technology
enabler (such as I am doing here, blasting the industry for fighting the legal
P2P network enablers), which they clearly didn’t have the right to do. But just
as making an MP3 copy of CDs that you have purchased isn’t illegal today, it
also wasn’t illegal for people to record television shows. Those recorders
didn’t enable the mass distribution of that copied content, and that’s where the
parallels end.

The recording industry is in big trouble because a lot of folks have decided
that content rights are meaningless. I applaud the industry for going after
those stealing its wares — whether it’s a 12-year-old honor student or a
grandmother of eight, who the media like to portray as the "victims" of these
lawsuits. Simply put, theft is theft and the industry has a right to pursue
those who are stealing it, regardless of age or social status.

I certainly hope there are unforeseen revenue streams that will arise out of
the P2P networks that enable this mass theft and wealth destroyer that we are
seeing play out before our eyes, embodied in EMI’s blowup today. Music is the
first to feel this squeeze, but you can rest assured that all content owners
will be affected by these thefts in mass. Television and movie studios are next.
Books, magazines, news — all content will eventually be affected by this mass
theft movement, and it’s going to be ugly for these owners like Time
Warner
(TWX:NYSE
- commentary
- research), Sony (SNE:NYSE
- commentary
- research) and others unless the very ownership laws that our
quasi-capitalistic economy is based on are enforced.

(On another note, how about we all work on vilifying this theft in a grass
roots-type movement, too?)

>

Barry Ritholtz:    A lot
More to Copyright than Meets the Eye

2/7/2005 4:00 PM EST

You know, for two guys who are good friends, Cody
and I disagree on a lot of things … what the Unemployment
Rate actually means
, significant P2P
issues and RIAA
litigation
are but a few areas where we are far, far apart. While there are
plenty of issues in which we are sympatico, the music industry is certainly not one of
them.

It’s a complex issue, and people tend to grossly oversimplify it.

Cody doesn’t address the issue of the near infinite extensions of copyright,
a constitutionally unwarranted legislative act, a corruption of the framers’
intent, and a large corporate giveaway at the public’s expense.

There are many more issues — why didn’t the music industry explore digital
distribution a decade ago? The short answer is that its retail distributors
vehemently objected to it. So it did nothing, despite its clientele clamoring
for a digital distribution channel. The marketplace hates a vacuum, so up popped
Napster, Scour, Kazaa, Donkey, Bit Torrent and the rest.

While I don’t condone file-sharing (I do use it to check out songs before
buying CDs), I believe it is the industry’s own fault. File-sharing came about
due to horrible business management and decision-making by the industry.
Consider for a moment that legitimate downloadable music wasn’t truly available
until less than two years ago. That’s truly astounding.

Further, I believe the RIAA made a mistake selecting a show-horse approach –
making peer-to-peer its top priority. What it should have focused on, in my
humble opinion, was counterfeiting. This would have been more of a workhorse
strategy. According to the Industry’s own studies 35%
of all physical CDs are illegal copies
. That’s where I would have put the
focus, had I been running the RIAA. Of course, that sort of enforcement is a
long, hard slog, involving a lot of police work, private investigations and
grind-’em-out type of IP enforcement. Not a lot of photo ops or headlines when
you bust two guys in a garage in Singapore or a small Russian mobster.

Further, the industry was complicit in the 1996 telecommunications reform
act, which enabled firms like Clear Channel (CCU:NYSE) to consolidate the
industry and catch short-term profits — but at the expense of their longer-term
health. (For more on this, see Radio’s
Wounded Business Model
)

People turned to P2P as a replacement for radio.

This is before we even get to the issue of price fixing scandal,
which the industry gets caught doing on what seems like a regular basis. It
recently paid a large fine as a settlement for its illegal behavior — and even
got caught cheating on that.

Then there’s the larger issue of DRM, abusive copyright enforcement and more
crimping innovation in the technology industry. There’s an article on this very
subject in today’s New
York Times
, but I first addressed this issue here back in
2000
.

There’s a lot more to this issue than meets the eye.

>

CW:  Barry
and Downloading

2/7/2005 4:14 PM EST

Barry, you bring up some good points. However, I would first call attention to your saying that you don’t "condone" file-sharing but that you do use it. I’m not sure how you rationalize utilizing something you don’t condone.

On the same note, theft is theft. And you don’t legally (or morally, IMHO) have the right to download songs you might or will or won’t pay for in the future. The owners of that content assuredly have not contractually agreed to your stealing their content, even if you plan to pay for it later. Maybe you can go to your local record store and try that approach — just sneak the CD out and come back later to pay for it.

>

BR:    Condone
This

2/7/2005 5:01 PM EST

I drink alcohol, eat fried foods and drive too fast. But I do not condone those activities by others.

Further, you are assuming that all P2P MP3s are illegal — and that’s a false statement. I believe the reason the major labels are against P2P is that it eliminates the need for a middleman — them! The term is disintermediation. And the P2P networks threaten the labels. In one possible digital future, artists will sell their music to listeners directly.

iTunes offers a partial solution to the problem of not hearing new music on the radio by allowing you to hear 15 or 30 seconds of a song before you buy it. But that’s not really a satisfactory solution.

Lastly, definition of theft is incorrect. Theft requires an intent to convert someone else’s private property into your own, depriving them of the quiet enjoyment of it. If you think I am guilty of anything, it’s probably an unlicensed use — not theft. This is a civil and not a criminal offense.

Sorry, but that’s the lawyer in me being precise with legal terminology.

>

CW:  Parallels
and Convolutions

2/7/2005 5:19 PM EST

Barry, I think you must be saying that you neither condone nor condemn illegal downloading by others. I think it’s important that we do condemn theft of property.

To your point about downloading not always being illegal, I am certainly not assuming that is the case. I myself have written and recorded dozens of songs and could easily make them available for free. That would be my own choice as sole owner of that content — I’m not exactly signed by EMI (yet, LOL). But the mass of P2P downloaders most assuredly have no idea if they’re downloading legal content or not, and the mass of copyrighted material being downloaded is indeed being downloaded illegally.

iTunes is likely a new middleman, in this disintermediation. Again, most assuredly that is the case, as I’ve said repeatedly in these pages.

>

An
Overview of the Music Industry’s Problems

2/8/2005 4:09 PM EST

I expect we will be continuing this debate in the months to come . . .

 

In response to Cody’s missive,
I felt an obligation to set the clarify the matter a bit — set the record straight, so to speak. I would rather engage in intelligent discussion than allow this discussion to devolve further (J’accuse!). Since this is an investor site, rather than one dedicated to moral evaluations, let’s explore some questions that are of great significance to investors in the Music/Technology/Radio complex of companies that are so affected by these issues:

1. Sales in every type of "Old Media" have suffered as consumers discovered newer forms of digital entertainment. Primetime television viewing is down, ratings for many sports events are significantly off, Movie theatre attendance is lower, Newspaper circulation has declined, magazine sales have slowed, radio station listenership is way down, and of course, CD sales are lower.

On the other hand, DVD sales have been booming,
VideoGames sales continue to set new records, the internet keeps growing exponentially, Blogs are stealing the thunder from print, Radio execs are panicking
- not over satellite
radio
, but over Apple’s iPod, which has become the new radio.

2. The music industry fought against legal downloadable music for years. They eventually acquiesced to Apple’s (AAPL) desire to make music easily downloadable in their iTunes Music Store, but this was only after years and years of ignoring obvious market demand. Those intervening years allowed a thriving P2P mindset to develop. 

Question: Which rocket scientists were responsible for this grievous error in business judgment? Have they been fired yet? If not, why?

3. There was an opportunity to co-opt Napster (NAPS) before it was litigated into non-existence, only to be subsequently purchased in bankruptcy for its brand name. That was an historic missed opportunity. Was this ever explored by industry execs? Shall we just instead chalk up yet another business poor decision to the same brain trust?

4. The music industry’s love affair with insipid boy bands certainly hurt sales. A parade of mediocre talent – some who can barely
sing
, others who can’t even be bothered to fake it – also led to weakened sales. I wonder: How much of the industry’s problems merely reflect their poor judgment and an inability to gauge what the public wants to hear?

5. The music industry has heavily lobbied Congress for favorable legislation. In addition to the RIAA, an umbrella organization representing the major labels, they also employ a variety of full time lobbyists. What was their position on the 1996 Telecommunications reform act, which allowed the consolidation of radio station ownership. Do they lobby for or against it? Did they even know about it, or foresee the possible impact it might have ?

Further, did anyone in the industry ever consider the impact of this consolidation on music sales? Have they investigated or commissioned any studies into what the impact of stations such as Clearchannel Communications (CCU) or Infinity, (now part of Viacom – VIA) buying up lots of smaller chains had on sales, play-lists, etc.?

6. We have been seeing significant increase in DVD
sales
at the expense of CDs. How have the major labels moved to exploit this trend, and to what degree are they cannibalizing their own sales? Does the rise of new media provide an opportunity for management to throw the blame to a suitable scapegoat?

7. CD sales also fell when the economy went into a recession; They started to recover once the recession ended. Is there something I don’t understand about the music industry – namely, why they believe they are exempt from the Business cycle?

8. When the industry cut their prices, they saw sales rise. Yet we continue to see a reluctance to allow open competition in the market place. Suggested retail prices still thrives, the same few CDs seem to be on sale at different stores each week. That’s something which at least implies some limited coordinated discounting.

Question: Why won’t the big music labels allow the market place to determine pricing?

9. Maybe its because they are unrepentant Price Fixers. Lets not forget that nearly all of the big labels signed a consent decree (an admission of guilt and a big settlement) for illegal price-fixing.

To be blunt, I find it laughable that this group has claimed the moral high ground, when these habitual anti-trust violators clearly have dirty hands.

10. Some studies have suggested that the Nielsen ratings on CD sales consistently undercount sales. Indeed, one wag went so far as to declare that RIAA
accounting practices a leading cause of declining music sales
.

Are sales off as much as advertising, or are the labels pulling yet another fast one?

 

That’s 10. I could go on and on with this, but I think by this point, you get the idea. The issues surrounding P2P and downloading are far more complex than the "Oh, woe is us industry" makes it appear. I cannot help but think that many of the music industry’s problems are largely of their own making, as well as part of a larger trend away from older media.

 

CW:  Call
Illegal Downloading What It Is: Theft

2/8/05 1:53 PM ET

I really created a firestorm of dialogue both here
on the site
and in my emails with my commentary about piracy yesterday.
Though I think most readers followed these points, I did get several questions
and comments from emailers who seemed to miss them:

1. I wouldn’t even begin to think that RIAA is somehow battling for private
ownership rights in some grand manner for the benefit of our economy and nation.
I think they are totally, 100% wrong for going after most of the surviving P2P
technology providers. I think they are totally, 100% right for going after
people who are stealing their music content property. I think it’s important for
all content providers to be protected from thieves, just as I think it’s
important for shop owners, homeowners, lawnmower owners and anyone else to be
protected from thieves.

2. I seriously doubt the lawsuits will have much long-term effectiveness in
stopping the theft. But they have certainly had some near-term impact, as I know
the kids I work with think twice and have slowed down their illegal downloading
activities.

3. It’s irrelevant if the RIAA did or didn’t react quickly enough to the
downloading phenomenon. Just because they have or haven’t figured out how to
offer their products in an economic manner off the Internet doesn’t mean that
they can now freely be looted.

4. To Barry’s point about downloading music before purchasing it, one emailer
asked what’s wrong with that — after all, consumers try out cars, tennis
rackets and golf clubs before purchasing them. Hey, again, it’s totally 100%
kosher if the seller is willing to allow you to try out the music. But the
sellers in this case aren’t willing to do that. You don’t like it? Don’t buy it!
If you wanted to try out a lawnmower and the dealer wouldn’t let you, would that
give you the right to steal it first, try it out and return it in perfect
condition? Didn’t think so.

5. One emailer wrote to say that correlation isn’t causation. Fair point.
It’s possible that all this theft of music isn’t what’s actually keeping the
music business under wraps in a strong economy. That still doesn’t make it right
to steal, and it doesn’t mean that a mass move to piracy won’t undermine all
kinds of content business models, from TV and movie studios, to books, to this
Web site.

6. Finally, if you’re downloading this stuff illegally, you are a
thief, plain and simple. Quit trying to rationalize your actions and get over
it. Just stop stealing. Long before this stuff became mainstream controversial,
I never did and never will download content illegally. Ain’t gonna happen.

There are a couple possible ways to play this ongoing and escalating battle
of piracy and content. Macrovision (MVSN:Nasdaq) is rolling out a product
that will search P2P networks for any illegally traded songs and kill them. I’m
doing more homework on that.

Then, of course, there’s Apple (AAPL:Nasdaq) with its iTunes store,
which is likely to become the largest (legal) distributor of music over the next
few years. Audible (ADBL:Nasdaq), Napster (NAPS:Nasdaq) and
RealNetworks (RNWK:Nasdaq) are also potential plays on the legal
distribution of music over the Internet. Of course, these distributors of legal,
protected music are likely to have ongoing battles with
pirates too.

Category: Finance, Music

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

28 Responses to “Debate on Downloading”

  1. pf says:

    Gentlemen…your arguments are for nothing more than filling blog space or realmoney conversation space.

    I will tell you right up front that I cannot remember the name of the tech company…but they do exist as per a segment on the original but now dead techtv. The company tracks all peer to peer file shares. Worldwide. If you download one song 100 times…or one time…the software logs this as one download. They don’t take anything…just track the actuall mp3 files being swapped world wide. An example of the power of this idea was shown on tech tv. They demoed two separate songs. Each song was ranked by the number of downloads. Then they compared other downloads of songs by the same artist. They showed two examples. The first was an artist with one very popular song…but the remaining downloads were next to nothing. In other words…a one hit wonder. The second example was the complete opposite. One very popular download followed by five or six other popular downloads for the same artist. This artist was labelled a group.

    Now what do you think they do with that info?

    They sell it. To radio stations and the RIAA. Why? Come on. Surely you can figure the rest out.

    The one hit wonders are sent rather quickly to the download sites while the “groups” are identified as someone that is worthy of the cost of putting together a cd and distributing it. Why? Because, regardless of what they say…there is money in cd’s.

    Gentlement, please…move on. You are being played…along with everyone else, on this issue of the “costs” of downloading. If anything…there is a shift underway of the business models of the content owner/distributor. The ones that have figured it out won’t admit it and bitch. The ones who haven’t figured out won’t admit and bitch. You guys pick up on this and give the bitchers a platform. To bad. Maybe if we just stopped talking about it we would wake up one morning and finally be living the reality of entertainment distribution.

    Pay as you go.

    Period.

    Paul.

  2. Chris says:

    The stealing a CD from a store analogy is wrong. If I walk into a store and take a CD, I have deprived the CD owner (the store) of the ability to sell that CD. That is theft – there is damages involved. Downloading a song from the Internet is much more akin to me listening to the song at the demo station in the record store, and deciding not to buy the album. I’ve listened and chosen not to indirectly compensate the artist by purchasing the CD. How is that different than downloading that same song from a bit torrent site and deciding I don’t want to buy it? In both cases nobody was deprived the opportunity to sell or possess anything.

    Yes, a minority of people will abuse the system and build huge music collections without paying for them. However, would those people have otherwise purchased the music if the Internet did not exist? I think the answer is negative. The RIAA is living in a fantasy land if they truly believe that every download is lost revenue. I think Epic’s problems are much more closely correlated with the quality of music they release, than the growth of music downloading. The RIAA knows that their business model is dead, and the lawsuits are simply a mechanism to delay the inevitable opening up of the music distribution system.

    For the record, 99% of my music downloads come directly from band websites, almost always small unsigned bands I would not have otherwise known about without the Internet. I have hapily purchased many CD’s after sampling music on the Web. There is no doubt that in my case, music downloading has increased my music purchases.

  3. Chibi says:

    I’m entirely with Barry on this one. Commercial radio is pretty near unlistenable. Artists don’t seem to mind file sharing so much.

  4. I believe the comapny the first commentor (PF) was referring to is Big Champagne (there are others out there now).

    I do not believe his assessment of their analytical capabilities is current — they can track downloads by zip code now — and the labels use it to help determine ad spends, while artists use it to determine what cities to tour in. . .

  5. yoyo says:

    what i’m ‘stealing’ is the record company’s take in the business. I have little need for their marketing or distrubution functions, so i don’t really like paying for them; very little of the money goes to the bands. I see shows all the time, thats how artists make money.

    I still buy some cds, but i get to listen to them first and decide if they are good. and without doing so at the record company’s leasure.

    A property rights structure that cuts out the labels doesn’t do much to curb music production and greatly aids every fan’s enjoyment. Its silly to analogize from physical assets to conceptual.

  6. Ritholtz on the RIAA and P2P

    Barry Ritholtz has posted a transcript of an excellent debate he had with a hedge fund manager about P2P and the RIAA. It’s long, but worth the read, so check it out….

  7. Marc says:

    Hi Barry;

    I’m with you!! The Record Companies are doomed. (By their own folly, and inability to evolve)

    I have, for a long time now, been wondering why someone with a bit of tech savvy and a few investors hasn’t put together a “net” based distribution platform?

    If one uses tools like Bittorrent for distribution, creates a musician friendly platform for publishing and makes the client nice and simple for users – I don’t see why you couldn’t put up a replacement to the RIAA membership in short order and begin working towards its inevitable demise.

    I’m sure CW won’t enjoy losing a sector, but a service like this would only cost micropayments per DL to maintain – and most of the current “media streams” that people want could be created and delivered automatically – from mp3s, to streaming “radio” (the marketing side).

    This is a fundamental use of the enabling capabilities of a global digital network – data distribution. And all music is just that – data. Only when you package it in a CD do the COGS rise and with them the price and difficulty of distribution.

    Evolution is about becoming Better, Cheaper (less resource intensive) and Faster – The current industry has moved little along these paths in recent history – The consumer and technology side of the market, however, has made huge leaps! If someone puts up a platform that automates the management of everything but the creative process, why would an artist stick with (or join) a traditional label?!!

  8. Debate on Downloading

    A debate between two friends of differing opinions on the music downloading issue. One of them’s skivvies are bit too tight, if you ask me . . .

    The Big Picture: Debate on Downloading

    And as someone pointed out on in the Interesting People list (I’m…

  9. Hev says:

    Cody Willard’s comment about P2P file sharing being the cause of the decline of record sales is silly and unfounded.

    A bigger reason for the decline of the industry in my opinion is lack of artist development. In the past (50′s, 60′s, 70′s) artists were allowed time to develop, often over the course of several albums. Some artists didn’t have a hit until many albums into their career! This produced quality music and quality artists that stood the test of time.

    This method has now been abandoned and many artists are dropped from their label after just one album if it doesn’t sell well. This creates the “one hit wonder” effect. A whole lot of fluff without much content could never justify the ever increasing CD prices.

    Another cause for the downfall of the industry is their greed in wanting to create a monopoly. With major labels merging, MTV being unchallenged and Clear Channel’s domination of the live venue & radio there isn’t much room for creative artists to have their voices heard.

    In light of the above, price fixing, and a mind numbing rotation on the radio and MTV, it is understandable that the computer generation has created its own set of morals in regards to P2P networks.

    For the computer generation P2P is like the radio or TV of past generations. The music industry simply missed the boat to reach their target market easier than ever before.

  10. Cody Willard says:

    For the 18th time, whether or not P2P has brought on a decline n record sales is irrelevant. P2P trading of copyrighted material is wrong and illegal. Period.

    Okay, now you all can get back to ignoring property rights and the foundations of capitalism and rationalize away. Have fun.

  11. Hev says:

    For the 18th time information is now free and copyright laws are outdated.

    Instead of calling our generation a “generation of thieves” you should see us as the generation that finally had the balls to do something about an industry that desparately needed a reality check.

  12. someone else says:

    this is ridiculous, that the music industry isnt focusing on other things that are in worse condition than “music downloading” in this debate i agree 100% with barry. i do not think however that people switched from radio to downloading. i think that many people use the radio hear a good song, download that song so they can listen to it, then end up buying the album. so the music industry needs to start thinking.

  13. Todd says:

    Cody,
    Your characterization of illegal downloading as theft is misleading at best. Theft involves the removal of tangible property from the legitimate owner. The owner no longer has them item stolen; the thief does. Going to Fye or Walmart and stealing the latest release by artist XYZ prevents *anyone* else from making that purchase, and costs the retailer money. Going to Grokster or a bitTorrent site and downloading a song does not. I am not claiming that it makes it right or justifiable (and it seems clear that it *is* copyright infringement), but let’s call a rose a rose here. Copyright infringement != theft.

  14. racheal says:

    what is illegal mean?????????

  15. Jim says:

    This Cody person is just a shrill mouthpiece for the indusrty. Copyright infringement is a civil matter, not a criminal one. Furthermore, it is not clear AT ALL if the record companies even have the right to control Internet transmission of music – in the original Napster trial, as soon as the Napster attorneys subpoenaed actual artist contracts, the RIAA panicked and moved to a quick settlement. They did NOT want the contents of those contacts to become part of the public record – was it because the contracts show that artists get almost ZERO compensation for CD sales? Embarassing. Or was it because the wording of those contracts has no provision for Internet distribution? We’ll never know.

    The music industry also wants it both ways as far as licensing. When I buy a CD they say, “you do not OWN that music, the CD is only a CARRIER; you have merely purchased a license to listen to it.” OK fine – they WHY did I have to purchase a license to listen to Led Zeppelin II when I bought it on LP in 1970, again in 1974 when I bought the 8-track, on cassette in 1979, on CD in 1986, and on CD (remastered) again in 1993? According to the RIAA that original 1969 purchase gave me the right to listen forever.

    Many people have no compunctions at all about “stealing” from criminals. What about the more than 1800 “price-fixed” CDs I have bought in my lifetime? They were charging $18.99 for product that cost them $1 or less to produce, and that includes the piddly few cents the artist receives.

    Yes, the RIAA certainly knows about rampant “theft” – they have a 100-year history of it.

  16. Excellent observations about the “Carrier” argument. How many Dark Side of the Moons have I bought?

    Its a joke.

    As to Cody, he’s not a mouthpiece — I jsut disagree with his views on the music industry. He does not hold, as we call it, “nuanced” views . . .

  17. dafin says:

    i want all information, music movies, to be free to a certain degree. Lets get rid of the record companys now. They have had their chips. Downloading is good for you, it lets you taste things you may never hear. The tide is turning on the greedy corporations who have kept prices high on the whole entertainment and media industry. If theft brings about there demise, i am willing to be called a theif. The movie companies are complaining that they are losing money, and that films will not get maid. Oh dear. That does not fill me with fear as we wait for the next batman movie, or spiderman 3. It would not pain me to see the whole of hollywood crumble. Let people make films, but do we need to spend £200 million dollars on a movie, of course not. Its sick. We live in an ivory consumer tower and laze at our leasure while people suffer so we can have this liofestyle.

  18. chris halls says:

    people are out in the world to make money, non stop profits is what they achive.
    forget art, and meaning, the only reason things happen is to make a profit.
    and yes money is what we need to survive, our soul purpose of working etc.
    but when your product or bussiness has made millions or hundreds of millions of dollars, what do you do with that money.
    ahh invest to make more, but why, to buy that expensive item you have your eye on, that house you want to redevelop.
    of course everyone wants to make money, but do you really need millions apon millions, this is the excuse for social behaviour.
    you want that car or clothing to be fashionable, to be better then the one you look to beat.
    but does earning millions of dollars really make your goals come true.
    well yes for example the music and film industry it does, their purpose to maximise their money/bussiness.
    and of course spending large amounts of money producing the product, of course they are going to want to earn more profit, rather than just earning what they spent.
    is some cases for example, mcdonalds fast-food shops, use a syrup and water(most probaly tape-water), to produce a beverage called Coca-Cola.
    the cost to make one litre of Mcdonalds coca-cola, costs three cents($0.03) to make, and retails at something close to $2-$4(unsure of the cost).
    yes as everyone one is aware of this structure of bussiness, it’s an outline close to what the music and film industry does as well, only not able to be consumed by the body.
    the music/film industry are upset due to the loss of profits of illegal downloading, rather then the adolescent sterotypical computer user, going to buy their product either from a retailer as a shop, or off the internet, such as amazon.
    for a music cd retailing at average $25 new, the teen might have problems in paying for it and physically buying it.
    so in that there is a solution that is effective, mp3 downloads have given a new path for reducing illegal downloads.
    buy the person, able to download the product within a few minutes, and at a lower cost usally $1.50 for a song.
    this is what is happening, and sould continue to happen as well as with the film industry, their product ready for download.
    but there are problems with this, the cost…many people don’t like to pay $30/$50 for something, even more when they can download it for free…with poor quality.
    so reduce the amount of money of the product, and don’t make the consumer have to go out of their way to physicaly go out and buy the product for a retailer.
    “i’m tired now of writing, i have other ideas, but am tired, because wrting this seems useless, i hope i establish some old ideas or new ones”

  19. The truth of the matter is that downloading and sharing movies and music is and always was shady since the beginning of the industry. What many (including the industry experts) don’t realize though is that people have done this same process for ever. Back in the days we were using tapes, we still made “illegal” copies for all our friends or made our own customized mix tape which we were also very proud of. Nothing has changed except the ability of the consumer to make this process faster. File sharing (edonkey) is the same as torrent sharing (http://www.seedler.org) which in turn is the same as tape sharing (check your tape collection). So what is all this intimidation and propaganda against file sharing? The megaliths of Sony, BMG etc should learn to adapt to the changing times instead of spending all their resources playing cops and robbers. They could actually archive the same profit margins if they move their music to the digital form through payed download sites where you can actually choose between downloading a specific song or the whole album like Real Networks does (www.real.com/music). This process would actually make songs and movies cheaper for everybody. Then again singers will have to make better albums instead of one single which has become a real challenge for most of them. Some may argue that this is a double sided knife for the music and movie business because it makes file sharing faster and easier. But what is their choice? Like I said before, smart businesses show their strength in their flexibility. By digitizing their music and movies and offering them for a lower price on the net their margins will definitely go up since their overheads will go down. Many studies now show that people don’t mind paying a few cents to download their songs with peace of mind and actually support their favorite musician or actor. But they demand this option either because they are under 18 and broke or because this is how they choose and play their music. My point in this article is that there should be a bitter sweet compromise between the music and movie companies because the internet is really the most liberal thing that humans have developed so far and there is no turning back.

  20. Ronnen says:

    Although I do agree that unauthorized music downloading is, in fact, stealing, I see this area of debate much less serious than most seem to think. Of course, the array of illegal mp3 downloaders is amassing quite quickly, but in essence, if we as consumers were being adequately provided for, I don’t think the RIAA would have to spend so many billions on trying to seek out and sue those who do download illegally. I think it rather asinine that the music industry–which has, in many aspects, become a trust–is spending so much money on such a few number of individuals. If some simple issues were addressed, I personally believe that the number of illegal downloaders would decline amazingly. If the following points were addressed, I don’t think I’d suffer so greatly from purchasing music online legally:

    1. I was driven away from Napster not only because it had such a small amount of music I actually wanted, but also because of the infringing licenses attached to the songs I did purchase. For example; to transfer one of the music files to another computer in my house, I had to burn the file to a CD, rip the file off the CD, and then give it the appropriate titles, etc. This was immensely time-consuming, considering the fact that I could not simply transfer the song file from my mp3 player to my other computer. Napster is therefore was imposing itself on what was deemed through purchase as my personal property. I had no plans to duplicate my music for the use of others, but simply to enjoy it privately on a different house computer.

    2. As previously stated, the types of music on the various legal download sites are usually rather limited. What I think people are so attracted to through P2P is the fast, easy search engine that accesses music worldwide and from different individuals, opposed to a unified server. This allows a broad music spectrum for music lovers to choose from. Many times, I have searched for foreign music on Napster to no avail. The same includes video game soundtracks, etc.

    3. Naturally, to make things as legal as possible, a person is allowed a 20-30 second sample clip. The problem with this is the marketing strategy behind it. Oftentimes, these clips have been misleading from the actual merchandise I purchased. I am therefore dissatisfied with the product I’ve received, and cannot ask for a full refund.

    4. The rules on legal sites are so restricting that they’ve driven the majority of the public–passive, legal downloaders–to the “streets”, so to speak. Because of their greed, these enormous companies are enforcing rules to protect themselves against the small number of individuals who download mass amounts of media and proceed to sell it. Because of this minority, the majority is punished. I personally think that if these companies just “relaxed” a little, they’d gain most of their old customers back, therefore balancing their annual profit once more.

    I make music myself. Personally, I’d be flattered if someone stole my music just to listen to it. I might be a little flustered if someone claimed that they’d written it themselves, but the fact that something I made is largely appreciated is enough for me. I fully understand that these musicians live off of what they sell, but regarding their mass popularity, they could find ways around selling music, profiting from other realms of their industry, whilst making music relatively inexpensive and widely known. I know this is unrealistic, but every music lover can dream. As for the music “thieves”, I think there’s more probable cause behind their actions than meets the eye.

  21. kimberly garcia says:

    read and print for spanish project

  22. LOL Kush says:

    music piracy FTW

  23. Erin says:

    i wish somone would make a law for, or against p2p sharing already. the sooner they do, the less people will be fined. in my not so humble opinion, it should be legalised to a point. sharing say, up to 200 songs should be legal. and uploading should be limited to a per day limit. otherwise there’ll be still be mass downloaders. it was an interesting debate.

  24. kujishakaliegh says:

    I hate this mess!!!

  25. Nikki says:

    Hi. Im doing a debate out this for school. I am on the negative side for this, saying that music downloads should be illegal. I have to say I used to do it until I did this research and found out what it really is. Its depriving artists of their income and also ripping off record companies. It is a fun and easy way to get music for free but before you do it think about all the music artists who really need all the money they can get…Britney Spears for example. She is a record artist who isn’t selling many cds now days because everyone is getting them free off the net. Look how she is turning out…shes terrible. A single mother and broke and how old is she? God people think about things thoroughly before you do them. It was an interesting debate to read BTW!! :p

  26. musicguy says:

    I have not to date weighed in on P2P file swaps. However I must now. I have a varied background in the music biz. I was a professional musician for 30 years. I also worked for a living engineering live sound. I worked in the retail side of the business with one of Canadas largest music retailers. I have always purchased music. With a collection 1500 l.p’s 900 cassettes,

    and 1700 cd’s. 100 dvd’s. I have bought my share of recorded media and supported artists.

    In the past I have always recorded copies of songs from purchased music to use for my own personal use (car,bike,cottage etc). Not to copy for other people. Put a levy on the blank media,for a split amongst artist’s,I’m game for a small levy sure.
    However I have to be honest here. In my opinion there is alot of crap out there. I enjoy the opppourtunity to pre-view(P2P) if you will,artists that I hear and enjoy. Do I go out and shell out my hard earned money for one or two worth while songs on a disc that is taken up by crap fillers. If I like the artist I then always go out and buy the legal issued product. In fact, I have been listeneing recently to an artist I downloaded from a P2P site and I went today and bought the legal copy. Did I have to? Maybe not, but I firmly beleive, knowing the industry, that I should and do contribute and support that artists career. Are all listeners like me? Maybe not? I have bought in the past one disc that had the security features on it. Well hey,I’m sorry if I bought a legal copy of a product, I want to be able to copy a couple of songs from the disc and bring with me. I’m not interested in bringing 200 discs with me. I was so turned off that I recently did not buy three artists discs,because of that issue. I would have otherwise.
    I also use P2P sites to get very old copies of songs that are not in print anymore. I have either worn out,lost or had stolen, music that I did buy at one point.

    All music purchasers are not like me,downloading music,dvd,etc, without buying a legal copy is not right. These artists do not get compensated for their product. But damn,somewhere along the line there has to be a happy medium. For now I will continue to review and purchase.

  27. musicguy says:

    I have not to date weighed in on P2P file swaps. However I must now. I have a varied background in the music biz. I was a professional musician for 30 years. I also worked for a living engineering live sound. I worked in the retail side of the business with one of Canadas largest music retailers. I have always purchased music. With a collection 1500 l.p’s 900 cassettes,
    and 1700 cd’s. 100 dvd’s. I have bought my share of recorded media and supported artists.
    In the past I have always recorded copies of songs from purchased music to use for my own personal use (car,bike,cottage etc). Not to copy for other people. Put a levy on the blank media,for a split amongst artist’s,I’m game for a small levy sure.
    However I have to be honest here. In my opinion there is alot of crap out there. I enjoy the opppourtunity to pre-view(P2P) if you will,artists that I hear and enjoy. Do I go out and shell out my hard earned money for one or two worth while songs on a disc that is taken up by crap fillers. If I like the artist I then always go out and buy the legal issued product. In fact, I have been listeneing recently to an artist I downloaded from a P2P site and I went today and bought the legal copy. Did I have to? Maybe not, but I firmly beleive, knowing the industry, that I should and do contribute and support that artists career. Are all listeners like me? Maybe not? I have bought in the past one disc that had the security features on it. Well hey,I’m sorry if I bought a legal copy of a product, I want to be able to copy a couple of songs from the disc and bring with me. I’m not interested in bringing 200 discs with me. I was so turned off that I recently did not buy three artists discs,because of that issue. I would have otherwise.
    I also use P2P sites to get very old copies of songs that are not in print anymore. I have either worn out,lost or had stolen, music that I did buy at one point.
    All music purchasers are not like me,downloading music,dvd,etc, without buying a legal copy is not right. These artists do not get compensated for their product. But damn,somewhere along the line there has to be a happy medium. For now I will continue to review and purchase.

  28. This is completely and utterly insane! I strongly agree with pf and racheal the companies don’t lose any amount of money from downloading P2P music ,but the facist jerks that the music label companies are are justing trying to screw us over, the ppl who actually are listening to there music. and besides if the artists i listen to are angry about this than i’ve made a serious misjudgement in what I’m listening to. to conclued i think cody is a fictional character that the @@@@@@@ music labels have set up and also that sharing is not “stealing” so WTF man ROCK ON!!!