On July 28, 2004, French Internet access providers and music copyright owners signed a joint national charter aimed at cracking down on illegal downloads and expanding the amount of legal music tracks available online (AFP). This is the latest in a series of moves taken across the world to combat music piracy as production labels see more and more of their profits being lost to illegal downloads of music files.
The music industry has been saying the same thing for several years now: peer-to-peer (P2P) file sharing networks are exponentially distributing pirated music across the world through the Internet, and this constitutes a copyright infringement. In English, this means that the fact that I downloaded a Tori Amos track through Kazaa yesterday and am listening to it right now makes me a criminal. So far, so good. Quite true as well.
But the real problem is not that people do not want to pay for music. Often I sample new music off the Internet before buying the CDs. Chances are that if I like most of the album, I’m going to buy it. On the surface this is what radio stations do when they play music. The difference, however, is that it has become insanely easy for me to acquire almost-as-good-as-original quality mp3s of any track that I want to listen to, and even if I don’t pay a dime, no one is there to catch me.
The principle of accountability has vanished. When one sees that there are two ways to acquire the same product, but by sacrificing a ‘little’ bit of quality you can get it for free without being penalized for it, what would most rational people do? P2P networks have made finding music off the Internet ridiculously easy, and most of us tend to ‘forget’ our social responsibility when it comes to such ‘trivial’ matters. To contribute to this, copy-protection techniques used on CDs by major production houses are always a step behind the latest cracking algorithms, and steps taken to prevent ‘ripping’ of CDs and DVDs have proven fruitless so far.
Enter music downloads of the legal kind. Disregarding the small number of ‘free’ legal music available for promotional purposes, more and more artists and labels have begun to provide a pay-per-download music service. In essence, you can purchase individual tracks or complete albums through a secure online transaction and then download your ‘purchase’ and, with variable limits to personal use, pretty much do whatever you want to do with it (Several providers digitally encode the files to prevent them from being played on other computers, or to be burned onto CD-Rs)
This is both a move to encourage free-riders such as me to start acquiring ‘legal’ music and an economic adjustment to the digital music revolution. Developing technologies are changing the way people perceive and use music. The advent of iPod and other mp3 players has meant that more and more people are becoming accustomed to carrying around their complete music collections with the latest players offering space for around 10,000 songs. This holds frightening possibilities for record companies. There is a very real concern within the industry that the CD format is fast going out of style, and as technology evolves, consumer demands for the best ‘medium’ will change as well. Till a few years ago audio CDs offered unparalleled music quality, a factor record companies used to encourage people to ‘buy instead of steal (download)’. However, today’s high-quality digital formats mean that audio quality is comparable, and in some cases equal to, CDs. Some experts are even starting to predict that within a decade CDs will become history as digital music will evolve to a point where we will be have access to our entire music collection (hopefully paid for) wherever we want it: in our car, at work, anywhere in the house, even on the beach. Matched with promises (and the reality) of audio quality, this is a serious threat to traditional business.
Thus, providing legal music online is a means of the industry trying to position itself to take advantage of the rising trend of portable music collections. A quick glance across major online music stores tells us exactly so. While offering free-riders affordable music (allowing them to purchase only the tracks they like instead of forcing them to buy the complete album) to ensure that they do not turn to music piracy, sites like eMusic and Apple’s iTunes are backing the new trend. iTunes, Apple’s online music store, has the added distinction of being supported by perhaps the best mp3 player in the business, the iPod. In this combination, Apple has found a very secure marketing brand and ensured that it takes full advantage of this cross between technology and music.
Legal music downloads appear to be the perfect answer to stopping music piracy, at least the downloading kind. Therefore there is no surprise when one sees major record labels pushing to expand such services. However, recent developments tend to make us question what the overall agenda really is. After a period of consolidation of the digital music market in the last two years, albums available for download online are being priced higher than they would normally be in retail stores. It used to be that you could download a song for $0.99 and a complete album for $9.99, but now stores are setting higher prices, with tracks going for $1.50 or even $2.49 and $11.50 albums being sold for $12.50 and $13.00 online. What is going on?
In positioning themselves to take advantage of changing market forces, the music industry has also hit upon another major factor in determining sales: consumer behavior. Legal music downloads offer people like me the comfort of never having to waste time in retail stores looking for my favorite track from high-school days or wondering when the latest album of Nickelback would hit the shelves. Instead, all the hassles are removed with everything easily searchable, previewable and downloadable from the comfort of my computer chair (and this baby is very, very, comfortable). Consumers may not be usually rational, but they are always looking to save the effort when it comes to making any sort of purchases. Online stores (or is it the major recording labels? Who knows…) are now cashing into this very aspect of human psychology and are beginning to charge extra for a service they are portraying now as a privilege. Having already consolidated their core target market, the time has now come to increase revenues.
Would this drive people back towards music piracy? Highly unlikely. People are not evil, or criminal, by nature. Appeals to their better nature usually work, and that is the strategy adopted by agencies like the Recording Industry Association of America (RIAA) who are actively involved in putting a stop to illegal music sharing. Media campaigns encouraging music lovers to pay a dollar or two for tracks instead of ‘committing a crime’ by downloading them for free are actually working as slowly but surely, more and more people flock to online music stores. And with existing customers sticking to this more ‘comfortable’ way of buying music, the industry is finally starting to win back ground it lost due to music piracy.