Record Labels And Music Stores example essay topic

Piracy has been a problem for the music industry on a number of levels. Ever since the Internet began saturating American culture, the number of pirated songs available has increasingly become a serious threat to the entire music industry, especially record labels and music stores. Advanced compression techniques (mp 3 format) have been distributed across the Internet that enable high quality music to be freely available to anyone on the Internet. The "mp 3" fad started in dorm rooms of college students where music could be shared across the campus network with thousands of others. We investigated the ethical implications of music piracy from the perspectives of the college student and various components of the music industry. The general term "piracy" refers to the illegal duplication and distribution of sound recordings and takes three specific forms: counterfeit, pirate and bootleg.

Jason Zuman, a Santa Clara University student, encoded 12 songs into mp 3 format on Nov. 4, 1998, from a promotional CD of a local band "Whistle Blower". Jason got the CD from the local Santa Clara County street fair where the band was playing. Three months earlier, Whistle Blower signed a record deal with Empire Records, a large music label, that produced and marketed their self titled CD. Whistle Blower discovered that many local fans downloaded their CD instead of purchasing it from the store.

On November 11th, the band's drummer, Kurt Smith, found pirated songs on Jason's computer. In March 1999, Whistle Blower noticed a steep decline in record sales, undoubtedly related to the freely available songs on the Internet. They asked Empire Records to pursue a legal course of action against Jason Zuman. By now, the songs were seen on hundreds of students' computers across the nation. Empire Records reported Jason's actions to the RIAA (Recording Industry Association of America) who addressed SCU officials requesting that they take immediate action Empire Records is taking legal action to try to protect their investment in Whistle Blower.

By having Whistle Blower's music freely available on the net, they are loosing profits that could have been made by the sale of CDs. Empire Records invested thousands of dollars into producing and marketing Whistle Blower's album. Foreseeing an increase in music piracy, they hired a law firm to handle these cases to handle the issue before it becomes to detrimental to their bottom line. Music industry is addressing the issue with Secure Digital Music Initiative (SDMI) headed by the Recording Industry Association of America (RIAA). The SDMI includes the biggest players in the music industry (Sony, Columbia Records, etc.) and hopes to develop and mandate a secure standard for digital music.

Anyone can be part of the SDMI, so long as they can pay the $10,000 annual fee (effectively eliminates the small guys). These large corporations rely on the revenue generated from CD sales and are looking for ways to maintain their position in the music industry. In most cases, record labels receive up to 60% of CD sales, the artist gets closer to 5% and the retail store gets the rest - about 35%). Freely distributed music (even if they paid the artists somehow) would effectively eliminate the existing method for music stores and record companies to generate income. Of course, the SDMI is being hailed by.