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Will MP3 downloads Annihilate the Record Industry? The Evidence so ...

Source: www.utdallas.edu
Topic: Music Industry

Sort Desciption: Sales will increase when consumers wish to spend more time (and money) listening to recorded. music. The industry would either need to improve the musical ...

Content Inside: Will MP3 downloads Annihilate the Record Industry? The Evidence so Far Stan Liebowitz School of Management University of Texas at Dallas * June, 2003 * I would like to thank Mukesh Chugh for research assistance. After Napster exploded into the public’s consciousness in 1999, concerns with MP3 downloads, their impact on the recording industry, and the industry’s attempt to thwart such downloads, have been in the news almost continuously. The Napster case was only the most public front in a wide ranging battle between the entertainment industries (movies and records) and the millions of individuals who were using the Internet to download, without authorization, copyrighted works, but who otherwise were thought to be the putative customers of these industries. This fight has spilled over into the political arena. The manifestations were seen in a bill proposed by Representative Howard Berman from California in 2002 that would have allowed copyright owners to engage with impunity in otherwise illegal activities “disabling, interfering with, blocking, diverting, or otherwise impairing” the “unauthorized” distribution of copyrighted items. 1 The bill did attempt to restrict these otherwise illegal activities to those that do not “alter, delete, or otherwise impair the integrity of any computer file or data residing on the computer of a file trader”but it still amounted to authorizing ‘hacking’ behavior that is disallowed in other venues. This is only a small part in a flurry of activities taken by the copyright-based industries to protect themselves against what they see as online pilfering of their products. At the center of the current controversy is the fear by the recording industry that great damage, perhaps even mortal damage, will be done to them if they do not stop online ‘trading’ of music files, a fear I refer to as the “annihilation hypothesis”. The movie industry is taking a backseat to the record industry for the moment ...

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