The future of popular music

----The essay must be a minimum of 500 words and this all the information you will need for ideason the topic.----- Now, as in the past, technology is redefining how music is produced, marketed, and distributed. This is nothing new. What is happening today has happened many times before. Sheet music was replaced by phonograph records, which, in turn, were replaced by audiotapes and CDs. Now, mp3 files are replacing audiotapes and CDs. As the means of recording music changed, the marketing and distribution changed and each change altered the very nature of the music industries. And with each change came new methods of illegally copying and bootlegging written or recorded music. However, this time there is a difference in both the scale of the change and in the response to it. The digital revolution is creating change on an unprecedented scale and that change is taking place very rapidly. It has made the production and especially the distribution of popular music faster, cheaper, and easier than at any time in history. Songs can be reduced to a simple code of 0s and 1s and sent anywhere on earth in a matter of seconds. Digital technologies have also made music piracy equally fast, cheap, and easy with the resultant effect that more music is traded illegally over the Internet each day than is legally sold in retail outlets…and the music industries have, so far, been unable to curb piracy either through legal action or technological means. For the music industries, this is a crisis of monumental proportions that shows no sign of abating. For popular music, this also may be a crisis of monumental proportions because it threatens to undermine the most fundamental processes of the marketplace. For fans and consumers, this is a crisis of a different kind…one that raises important questions about the future of popular music. However, before attacking those questions, let's look at a little history… A BRIEF HISTORY OF MUSIC DOWNLOADING The explosion of music downloading and Internet piracy began in the fall of 1999. Shawn Fanning, a 19-year-old undergraduate at Northeastern University, launched the original Napster, which allowed computer users to share and swap files, especially music, through a centralized file server. It was a service that acted as an intermediary to aid peer-to-peer file sharing by combining a music-search function with a file-sharing system and instant messaging. Initially, Napster was used by Fanning and fewer than 50 of his friends. However, within a year, Napster had 25 million users and hundreds of millions of songs were being swapped on the Internet through the Napster service. The recording industry saw this as a wholesale act of piracy and took legal action to stop Napster, claiming that the service constituted a gross violation of their copyrights. In July of 2001, a judge agreed with the industry position and issued an injunction ordering Napster's servers shut down to prevent further violations pending the outcome of industry lawsuits against the file-sharing service. In September 2001, Napster reached a settlement with the industry where it agreed to pay $26 million for past-unauthorized uses of music and an advance against future licensing royalties of $10 million. At that point, Napster attempted to convert its operation to a legal subscription service, but was unable to secure licenses from copyright holders in sufficient numbers to be competitive. In 2002, Napster declared bankruptcy and was ordered to liquidate its assets according to the provisions of Chapter 7 of the U.S. bankruptcy statutes. After several years of negotiations, Napster's brand and logos were acquired at auction by Roxio, Inc. (now Napster, Inc.). Roxio used the Napster acquisition to re-brand its Pressplay music service as Napster 2.0. However, the Napster lawsuits did not accomplish many of the goals that the music industry sought in attempting to curb the spread of illegal downloading. While Napster was found to be in violation of copyrights, the courts found most liability to reside with the individuals who illegally downloaded music, which meant that the industry had to seek redress primarily from individuals and not with the intermediary service. This placed the industry in the uncomfortable situation of bringing lawsuits against its potential customers. Such lawsuits have proceeded, but in relatively small numbers when compared to the extent of illegal file sharing. Further, with the collapse of Napster other file-sharing programs like Gnutella and KaZaa that did not use a central search database jumped in to fill the void and made it virtually impossible to regulate the flow of materials under copyright being swapped or shared. In 2003, Metro-Goldwyn-Mayer (MGM) launched a suit against Grokster, a file sharing software provider, in hopes of establishing a precedent that would find a file sharing service liable for copyright infringement. MGM claimed that Grokster should be liable for damages because it not only allowed users to to share music, it encouraged it. Grokster countered with a decision handed down by the Supreme Court in 1984 (the "Sony Betamax" decision) that said Sony and other VCR manufacturers could not be held liable if VCR owners used their machines to make illegal copies and Grokster claimed the same protection. The MGM vs. Grokster case also made it to the Supreme Court in 2005 and the Court rendered a decision in June of that year. The Supreme Court's decision in MGM vs. Grokster found that Grokster could not claim the same protection that was accorded to Sony in the "Sony Betamax ruling" because Grokster had "actively encouraged piracy." This decision meant that file-sharing software providers like Grokster, Gnutella, and KaZaa could be held liable for infringement, if it were established that they had "actively encouraged illegal file sharing." However, the Court also upheld the findings in the Sony Betamax ruling and reaffirmed the basic principle that manufacturers or software providers could not be held liable for damages simply because individuals used their products or services for the purpose of infringement. Put simply, software providers could only be held liable if it were established that they had actively encouraged the use of that software to foster infringement. The MGM vs. Grokster decision established two important precedents: 1. File-sharing software itself is not illegal even though it can be used for illegal purposes. 2. Companies that make digital technologies are not responsible for their use unless there is "Evidence of active steps taken to encourage direct infringement." So, the "Grokster Decision" is mixed. While it established that software companies can be held liable in infringement cases if they encourage illegal use, it also offers protection for companies like BitTorrent and Gnutella that don't encourage illegal file sharing, while reaffirming the liability of users who use file-sharing software to illegally download material held under copyright. It is estimated that 95% of all music files downloaded in 2008, an estimated 40 billion files, were illegal. And illegal downloading is increasing at a rate of approximately 15% each year. The music industry estimates that it currently loses more than $5 billion in revenues in the U.S. through illegal downloading each year. THE LEGAL FACTS OF DOWNLOADING Put simply, the U.S. Digital Millennium Copyright Act of 1999 makes the reproduction of copyrighted material (with the single exception of making a copy for your own personal use) illegal. The U.S. Code protects copyright owners from the unauthorized reproduction, adaptation, or distribution of sound recordings. While it would be considered legal for you to purchase a music CD and copy (rip) it to MP3 files for your own use, uploading these files via peer-to-peer networks or making additional copies to share with others constitutes a clear breach of the law. Typically, two sets of copyrights are violated when an illegal copy of a recording is made: 1. Those copyrights that pertain to the musical composition (the lyrics and notes owned by the songwriter or music publisher) 2. The copyright of the recording itself (the recording of the performer singing or playing the song, which is usually held by a record company) PENALTIES FOR ILLEGAL DOWNLOADING On the federal level, titles 17 and 18 of the U.S. Code protect copyright owners from the unauthorized reproduction, adaptation or distribution of sound recordings, as well as certain digital performances to the public. The penalties differ slightly, depending upon whether the infringing activity is for commercial advantage or private financial gain. Under U.S. copyright law, "financial gain" includes bartering or trading anything of value, including sound recordings…so making a copy for your friend constitutes "an infringement for financial gain" even though no money actually changed hands. Sound recording infringements can be punishable by up to five years in prison and $250,000 in fines. Repeat offenders can be imprisoned for up to 10 years. Violators can also be held liable for actual damages, lost profits, or statutory damages up to $150,000 per infringement, as well as attorney's fees and costs. THE ISSUE The central fact of downloading is that it is illegal unless there is a clear indication from the copyright owner that it is not illegal (as is the case in many "new band" web sites where the artist freely distributes audio files of their own music to the public) or that it is material in the public domain and no longer subject to copyright (typically music written and recorded prior to 1924). Otherwise, one can safely assume that the downloading of any music from any site on the Internet or any copy obtained under any circumstance outside of legal purchase constitutes an infringement of copyright and is illegal. However, illegal downloading is now treated much like exceeding the legal speed limit on a highway; to travel at 70 miles per hour on a posted 65 miles per hour highway is clearly against the law, but it is "unlikely that I will get caught, there are only so many cops, and, after all, everybody speeds." There are also many who justify illegal downloading for a variety of reasons…most of which are either based on false presumptions or are merely rationalizations. To whit: "The record companies make so much money, I see no conflict in downloading or making copies for my friends." The reality is that 85% of all recordings made do not generate enough revenues to cover their costs. Consequently, 15% of the recordings subsidize all other activities in the recording industry, including the support of less profitable types of music, the development of new artists, and the costs associated with running a company. Typically, 90% of the activity in illegal downloading is directed at the 15% of profitable recordings, which means that the problem has powerful indirect effects on all aspects of the industry and not just those that "make money." "Artists make so much money, I see no conflict in downloading or making copies for my friends." Well, some do and some don't. More to the point, they make their money by selling records (or a substantial proportion of their money by selling records) and theft is theft. If you have a six-pack or a carton of orange juice in the refrigerator and your roommate takes it without asking permission, would the fact that "you can afford it" serve as an acceptable justification to you? "Artists make most of their money from touring and downloading helps to build their popularity. Consequently, I'm really helping to promote them by sharing and making their music available through peer-to-peer file sharing." Again, some do and some don't make their money from touring. And again, it is up to them and not you to determine how their property is used and distributed. If your roommate takes that six-pack or carton of orange juice and gives it to his friends as a gift without asking your permission, would "I'm making you a more popular person" sound reasonable? "The price for legal downloads (typically 99 cents per song) is too high. The record companies are ripping us off and, consequently, I don't feel bad about illegally downloading." The wholesale price of a song (about 65 cents) on the online music services was actually set artificially low to help stimulate demand. The profit margin for both the record companies and the music services is very small. If anything, legal downloads are more honest and fair in their pricing than most other products in the music marketplace. SO WHERE ARE WE NOW? The answer to the question, “Where are we now?” depends on who you are. If we just look at popular music, it's more popular now than ever before. Approximately one billion (that's a thousand million) tracks are downloaded illegally every month in the U.S. Consumers have bought more than 100 million iPods since their introduction in November 2001 and have filled them with songs (some legal, some not…although a recent British study determined that 95% of songs on the typical iPod were illegal). The touring business is thriving. Performance rights royalties (for radio airplay, ring tones, use in commercials and other media, etc.) are at an all-time high (ASCAP reported a record setting $785 million in 2006). However, the record industry is dying. In 2000, consumers bought 785.1 million record albums. In 2006, that number had fallen to 588.2 million and that figure includes both CDs and legal downloads. In 2000, the ten top-selling albums in the U.S. sold a combined 60 million copies; in 2006 the top ten sold just 25 million. The largest selling album of 2000 in the U.S., NSYNC's No Strings Attached, sold almost 10 million copies; 2006's largest selling album, High School Musical, sold only 3.75 million, a number that wouldn't have made the Top Ten in 2000. In 2008, Coldplay's Viva la Vida or Death and All His Friends was the best selling album in the world…although total worldwide sales were just slightly above 7 million. Overall, the record industry is in its ninth year of decline…and, like the housing market, the bottom is no where in sight. Millions of music fans who used to be “consumers” and are now dedicated pirates might well say, “So what, it's their own fault” and they would, at least in part, be right. The recoding industry's worst enemy was not Shawn Fanning; it was the industry itself. Every opportunity to reverse the downward spiral that has now turned into a freefall was missed. Every chance to develop a new business model that dealt with the realities of Internet file sharing was ignored…and now it may be too late. Again the music fan may say, “So what,” but the ramifications of the collapse of the recording industry are sobering. Over 3,000 music stores have closed since 2003. The 89 Tower Records stores are gone. Musicland, which operated 800 Sam Goody stores, filed for bankruptcy in 2006. In all, thirty-six percent of music stores have gone out of business since 2003. Today, sixty-five percent of all music sales take place in “big-box” stores like Wal-Mart and Best Buy and they focus their efforts on a limited stock of “marketable” titles. The investment in new finding, developing, promoting, and marketing new talent has dried up. The number of bands signed to the labels has dropped by a third and without the national marketing and distribution that the labels provided most bands face a kind of regional isolation that is almost impossible to overcome. No viable alternative to the kind of support that the labels once gave to “break” new artists nationally has yet to emerge…outside of television. “American Idol” and The Disney Channel are now the most successful and powerful forces in bringing new talent into the marketplace. Disney gave us “Hannah Montana” (the 8th largest selling album of 2006) and “High School Musical” (the Number One album of 2006). Disney also gave us Hilary Duff, Britney Spears, Christina Aguilera, Justin Timberlake, Lindsay Lohan, and The Jonas Brothers, not to mention non-recording stars like Ryan Gosling and Keri Russell. “Idol” made stars out of Carrie Underwood, Chris Daughtry, Kelly Clarkson, Ruben Stoddard, Clay Aiken, Fantasia, Jordan Sparks, Taylor Hicks, and David Cook. The question, of course, is whether Zac Efron, Vanessa Hodgens, Miley Cyrus, and the future stars of “American Idol” are what we are looking for in “new talent.” YOUR ASSIGNMENT: Offer an informed opinion on the following question and please do not respond directly to the questions that are posed in the body of the text. The text is there to give you an assortment of things to think about and you are to come up with your own thesis and ideas. Look into your crystal ball (and do a little research) and speculate about where we are headed. What is the future of recorded music and what will it mean in terms of the music that we will listen to? The obvious precondition to your speculation is the future of illegal downloading. Has illegal downloading become so much a part of the fabric of people's lives that it will only continue to grow as the sale of legal music continues to decline? Or, as young adults grow older, will they stop illegally sharing files and return to the marketplace to purchase the music that they listen to? No matter what the future of legal vs. illegal downloading may be, it seems certain that the record companies will never regain the power and authority they once held over recorded music (for both good and ill). It now seems safe to predict that the major labels will have far fewer resources to invest in developing, promoting, and marketing recorded music. Clearly the promotion of new music will move to areas outside of — though perhaps linked to — the record industry. What will those “new areas” be and what kind of music will they produce? Already companies like Live Nation and AEG have developed lucrative "360 contracts" with established artists like Madonna, U2, Elton John, Billy Joel, and Jay-Z that cover every aspect of the artist's professional life from concert tickets to merchandise to recordings. For new talent, Disney and "American Idol" continue to be the the most successful means of "breaking new artists." Are we looking to an era where most new artists come to us through things like “American Idol” and “High School Musical” or are there other alternatives? If there are, what might they be, how might they succeed, and, again, what kind of music might they produce? Is it possible that our sense of music will shift from a national and international context to one that is regional and local? Although there were always “national and international stars,” it is only in the last thirty or forty years that they came to dominate popular music to the near exclusion of regional success stories. Not too long ago, people in the South listened to music that was very different from the music listened to by people in the North, people in the West had different musical tastes than those in the East, and so on. May we return to such local and regional musical interests? Or, is it possible that the Internet may build new communities of interest where fans of a specific artist or genre will find their niche and create the “independent labels” of the future with little or no regard for geographic boundaries? Or will popular music become like McDonalds and Wal-Mart, available everywhere and at the lowest possible price…but geared to the lowest common denominator of musical taste? Whatever your projection of the future may be, make sure you let the reader know how and why you see that future forming…and make sure you indicate what that future holds for us in terms of the value and quality of what we listen to.