The Effects of the Internet and Digital Downloading on the Music Industry

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The rise of the Internet over the course of the past two decades, along with the technology of digital downloading, has had immense effects on the very nature of the contemporary music industry. This sample essay explores some of the most important of these effects in greater depth.

Illegal downloading of music

The illegal downloading of music was made possible by the Internet, due to the fact that the Internet enabled the use of software that allowed peer-to-peer transfers of files between different Internet users. In principle, this practice was always illegal, insofar as copyrighted material (such as a song) is not permitted to be shared in this way. However, there has proven to be no effective way to really put a stop to the practice, and it continues to this day.

Key applications over time that have enabled this practice include:

• Napster
• WinMX
• Limewire
• Acquisition

In any event, the practice is still affecting the music industry today. On the basis of common sense, one could infer that if people are engaged in the illegal downloading of music, then the music industry surely loses money, as those people are essentially stealing the products of the industry as opposed to purchasing them legitimately by giving money to the industry. Even after observing this practice for years, it is not entirely known how much effect this practice has on the economics of the music industry.

Other industries impacted by illegal internet downloads

It's not just music being affected. Piracy can also affect education. The case of Alexandra Elbakyan is a prime example. Elbakyan made a vast number of academic journal articles available for free on the internet. These journals are technically the property of the publisher, and normally require payment to access them, costing the publisher a significant amount of money in profit lost.

The reality of the situation, however, would seem to be considerably more complex than common sense would suggest. Whereas some studies have indicated that illegal downloading of music has hurt the music industry, others have instead concluded that the practice has had no effect upon or even helped the industry. For example, Catalano has quoted one study by the European Commission that indicated the following:

"Taken at face value, our findings indicate that digital music piracy does not displace legal music purchases in digital format. This means that although there is trespassing of private property rights (copyrights), there is unlikely to be much harm done on digital music revenues" (paragraph 8).

The need for free products

In other words, it would seem that people who pirate music online do not do so instead of buying digital albums; rather, if they did not pirate the music, they just would not acquire the albums at all. Insofar as there is at least some inherent marketing advantage in more people actually having the content, then, this would imply that illegal downloading may even help with music sales in this indirect regard.

There are, however, alternative ways to interpret such findings. For example, the same study also indicated that insofar as pirating music draws people away from the sale of actual physical albums altogether, then this could still surely hurt the music industry at the financial level. Moreover, as Rothman has pointed out, even setting aside financial considerations, illegal downloading has still constituted a major attack on the basic moral and legal structures of the music industry as a whole.

The practice entails blatant copyright violation, and the normalization of the practice may well have changed people's perceptions of music as a commodity over time. This has likely had serious effects on the business model of the music industry as a whole since it clearly becomes a lot more difficult to sell a commodity to someone who has become accustomed to the idea that it is not necessary to pay for it.

The rise of internet streaming services

Another way that the Internet has affected the entertainment industry pertains to the rise of streaming services. These are services, such as YouTube, Amazon Prime, Spotify, Pandora, and Apple Music, which enable listeners (to varying degrees) to browse and listen to any music that can be found within the services' vast online collections. As a result of the rise of these services, the practice of actually purchasing albums from musicians, and especially physical albums, has been in the process of growing increasingly obsolete.

For example, if one can pay ten dollars in order to simply stream the new album of one's favorite artist and also have access to thousands of other albums besides, then it begins to make little sense for the service user to pay ten dollars to just own the single album. Indeed, streaming services have contributed to making the very concept of ownership in this regard obsolete: one now experiences music as if it exists in a giant virtual cloud, accessible to anyone in the general public who is willing to pay a basic subscription cost.

Taking money away from musical artists

Due to the royalties system used by streaming services, musicians and record labels do make money (albeit an arguably minimal amount) from these services. As White has written: the streaming services

"represent a compromise of sorts between the music industry and those providing music via the Internet. . . . [The royalties system] makes them a better option for the record industry than having music pirated, in which case they would make nothing, but a worse option compared to buying tracks outright" (paragraph 3).

Musicians themselves, though, would seem to often express negative feelings about the streaming services, due to the fact that this kind of distribution model is likely to make it much more difficult for them to earn a living with their work (Arthur). However, there seems to be a growing recognition within the music industry that this is simply the way things now are within the context of the Internet age, and that nostalgia for the way things used to be likely will not help any of the stakeholders adapt to these new circumstances in an effective way.

The impact digital downloading has on musicians

The changes wrought by illegal downloading and the rise of streaming services has had ambivalent effects on musicians themselves. For one thing, musicians can no longer expect record sales to sustain their careers—but then again, it is not clear that musicians were ever able to expect such a thing anyway, even during the pre-Internet days. As Herstand has pointed out: major label musicians:

"always had to rely on alternative sources of income (like touring and merch) to offset what their labels didn't pay them in royalties. . . . Why are people silent when record companies (legally) steal from artists but raise hell when fans do it?" (paragraph 10).

In other words, it is possible that musicians, while no doubt affected by the developments within the music industry discussed above, may in fact be less affected than the record labels themselves. Musicians may be making less money in these times from record sales; but in truth, it would seem that they never really made all that much to begin with.

In addition, if the rise of the Internet has hurt musicians in some ways, it has also surely helped them in others by providing them with unprecedented avenues through which they can reach out to their target audiences. As Mansick has pointed out, for example:

"there's been an astounding 510% increase in independent musicians making their full time living from music in just the past decade" (paragraph 1).

Moreover, given that most musicians cannot make their actual livings in this way, the actual number of active independent musicians has likely skyrocketed even further. An independent musician is someone who is not signed with any record label. This implies that musicians are now finding it more and more possible to reach out to their audiences for support and sales without the assistance of record labels.

Social media's role in music downloads and industry decline

The cultural impact of social media and Internet communication plays a role in musician success. If one has the right skills and savvy for making effective use of these platforms, then a given musician could potentially develop a huge communication and distribution network for himself, without the assistance of any other formal stakeholders within the music industry, such as record labels.

Moreover, the musician can engage in innovative tactics for developing his career. He can, for example, simply give his music away as a marketing strategy, with the hope that this will draw the kind of interest to himself that may enable him to sustain a career over the long run. Again, then, the rise of the Internet would seem to have hurt record labels more than it has actual musicians: although it surely has caused some problems for musicians, it has also provided them with new opportunities.

The future of music and digital downloading

Looking toward the future, it would seem wise to conclude that in these times of the Internet, digital downloading, and streaming services, people are going to become less and less likely to actually purchase music in the way that they once did. This is an irreversible fact that stakeholders within the music industry will need to accept, if they are to continue to play a meaningful role within the contemporary world. Casual observation and evidence based research papers both seem to support this conclusion.

It is also possible that some stakeholders, such as traditional record labels, may well fade into obsolescence as this progression continues. This is the price, though, that is always paid over the course of technological development. It would hardly be appropriate to condemn the supposed degeneration of the music industry on these grounds. Rather, all that can really be said is that the industry is currently going through a phase of profound change, with all the drawbacks and opportunities implied by such change.

In particular, it is worth considering El Gamal's finding that although people are increasingly less likely to actually purchase music, they are in fact more likely than ever to go out to live shows and concerts in order to experience the musicians they admire. This opens up the possibility for the emergence of new business models within the music industry that are focused more on the event of the show itself.

Among other things, it may be appropriate to reconceptualize music distribution, whether through albums or through streaming services, as primarily a kind of marketing tool for getting people to come to shows and/or support their favorite artists in other ways. For example, music popular with college students would be better suited to sales versus classical and oldies genres.

It would seem fairly clear that thanks to the Internet, the age of treating access to the music itself as a key commodity is more or less coming to an end. If stakeholders within the music industry, including record labels, can come to terms with this fact, then they may able to create renewed roles for themselves within the context of the contemporary Internet age.

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Works Cited

Arthur, Charles. "Streaming: The Future of the Music Industry, or Its Nightmare?" Guardian. 2 Jan. 2015. Web. 24 Nov. 2015. http://www.theguardian.com/technology/2015/jan/02/streaming-music-industry-apple-google.

Catalano, Michele. "Music Piracy: Major Studies Conflicted over Recording Industry Impact." Forbes. 25 Mar. 2013. Web. 24 Nov. 2015. http://www.forbes.com/sites/michelecatalano/2013/03/25/music-piracy-major-studies-conflicted-over-recording- industry-impact/.

El Gamal, Ashfraf. "The Evolution of the Music Industry in the Post-Internet Era." CMC Senior Theses, Paper 532 (2012). Web. 24 Nov. 2015. http://scholarship.claremont.edu/cgi/viewcontent.cgi?article=1501&context=cmc_theses.

Herstand, Ari. "Fans Aren't Going to Pay for Music Anymore—And That's OK." Digital Music News. 8 Sep. 2014. Web. 24 Nov. 2015. http://www.digitalmusicnews.com/2014/09/08/fans-arent-going-pay-music-anymore-thats-ok.

Masnick, Mike. "Massive Growth in Independent Musicians & Singers over the Past Decade." Tech Dirt. 30 May 2015. Web. 24 Nov. 2015. https://www.techdirt.com/blog/casestudies/articles/20130529/15560423243/massive-growth-independent-musicians- singers-over-past-decade.shtml.

Rothman, Lily. "Illegal Music Downloads Not Hurting Industry, Study Claims." Time. 21 Mar. 2013. Web. 24 Nov. 2015. http://entertainment.time.com/2013/03/21/illegal-music- downloads-not-hurting-industry-study-claims/.

White, Billian B. "Spotify Isn't Killing Record Sales." The Atlantic. 27 Oct. 2015. Web. 24 Nov. 2015. http://www.theatlantic.com/business/archive/2015/10/spotify-isnt-killing-record- sales/412684/.