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The internet has transformed the world. It has transformed our communications. Because of the internet, one can consume various forms of media without leaving their home. But this privilege has turned many individuals towards ill. Now one can steal media, especially music, because of its digital availability. Pirating music on the internet became possible through file-sharing; this is sharing duplicate MP3 files with another user(s) on a file-sharing network. Other users may download a new duplicate from your group of music files. File-sharing MP3s threatened the music industry. Because of profit losses, the music industry mobilized to prevent illegal distribution. Certainly the iPod/iTunes helped the recording industry recover from profit losses due to pirated music, but digital music will always be pirated. This is because, as will be observed, one person’s invention can supply millions of people with free music. This happened with Napster and mp3’s; and with MyTunes and iTunes songs. The industry must rely on creativity to attract customers to the legal consumption of music.

Prior to the internet era, one could not easily duplicate music: “Vinyl records were almost impossible for a consumer to duplicate, and cassettes provided a noticeable degradation of sound quality with each copy made…” (“Is Digitized Music Becoming a Quasi-Public Good?”). On compact discs, digital WAV formats were difficult to duplicate: “Transferring a [WAV]file of this size over the internet might take hours, depending on the connection speed of the computers sharing the file… the advent of MP3 technology…making music sharing over the Web a much faster process”(“Journal of Public Policy and Marketing”). Also, an MP3 file duplicates exactly: “Because of the MP3, “Every second- and subsequent-generation copies are identical to the original recording” (“Journal of Public Policy & Marketing”). Easily distributed, exactly replicated media opened up a world of piracy, and a world of trouble for the music industry. This was because a free copy of the song became instant at near-CD sound quality.

The beginning of the end of the music industry began with the creation of Napster. Napster was the original file-sharing network. It is “a computer program written by an 18-year old college dropout [Shaun Fanning] in his uncle’s office, and distributed free of cost to over 50 million people around the world” (“Is Digitized Music Becoming a Quasi-Public Good”). It artfully helped users share and distribute copyrighted music files: “It provides a current directory of all shared files of all users…it provides the necessary IP address information and linkage to enable users to exchange music…it monitors the exchange process to ensure that transmission is completed” (“Journal of Public Policy & Marketing”). This meant that quick, quality MP3 duplicates were made available for free among millions of users. Users downloaded from Napster’s central servers, which held a catalogue of songs. Napster attracted the attention Recording Industry Association of America (RIAA). They perceived Napster’s distribution of copyrighted music as piracy; they took legal action.

When Napster was sued by the RIAA in 1999 ( A&M Records vs. Napster ), it tried do defend itself as an Online Service Provider (OSP). Napster banked on the fact that “an OSP that is merely a conduit through which infringing material passes will not be liable for that infringement, either directly or indirectly” (“Journal of Public Policy and Marketing”). This was denied by the court. The RIAA successfully secured an injunction on Napster on July 26, 2000. This injunction meant that Napster could not assist in the further exchange of copyrighted MP3 files; it would have to shut down. Napster quickly filed a court appeal and won (July 28, 2000); it kept operating. The RIAA filed an appeal (February 12, 2000); as a result, Napster was required to block user access to copyrighted music (March 2, 2001). Napster attempted to block users from the copyrighted materials, but failed. Under court order, Napster was forced to shut down on July 2nd, 2001. It appears that the RIAA won, but they were still losing to threats greater than Napster.

Napster served as a catalyst for peer-to-peer (P2P) file-sharing. “Napster was not a true P2P application, as there was a main point that all Napster users relied on: a group of Napster-owned servers kept the lists of file being offered…these servers could be seized or shut down”(Is Digitized Music…”). Despite its profoundly ill effect on the music industry, Napster was only a legal scapegoat and was the least efficient file-sharing medium. “Napster is only the most visible and prolific of the MP3 exhange services used by Internet music seekers. Many others are available, including Gnutella, iMesh, Napigator, KaZaA, Aimster, and Freenet)” (“Journal of Public Policy and Marketing). There are many others, such as Morpheus and Limewire.

What makes these P2P file-sharing services different from Napster is that they “have no central servers that list what content is available. Every individual client acts as a server the publicly announces what is available…This makes defeating P2P systems almost impossible, since there are no critical components that can be struck down by law enforcement” (“Is Digitized Music becoming a Quasi-Public Good”). To reiterate, over 50 million people used Napster to pirate music. Imagine the same amount of people, each hosting an individual server; this is why most file-sharing is called “peer-to-peer.” Having millions of hosts to download from speeds up one’s downloading and allows one a variety of downloads to choose from. The hosts are difficult to monitor because there are many of them.

One by one, authorities could shut down file-sharing websites. But, consider this: “Virtually all recorded music has already been converted into unencrypted MP3’s and will still be available with or without Napster [or insert the next site here]” (“Journal of Public Policy Marketing”). As one site receives an injunction, the next site will achieve popularity; avid downloader’s will be drawn to it. The music industry was aware of Websites similar to Napster. The music industry was losing both money and customers: “23 percent of those music consumers surveyed said that they did not buy more music in 2001 because they downloaded or copied most of their music for free” (RIAA). The RIAA said that the domestic shipment of music products fell 10.3 percent in 2001, and that the value of all their products decreased by over half a billion.

Many paradigms were modeled to solve the recording industry’s problem. For example, the music industry developed Internet music services. These services allow one who has a subscription to it to download songs. Most of them appear to have been ineffective. The only service that appears to rival Apple is Rhapsody. “RealNetworks says that Rhapsody subscribers streamed more than 16.4 million songs in August [2003]-an average of more than 500,000 songs per day” (VNU 2003). But Apple nearly solved the RIAA’s piracy problems.

Apple brought the world the iPod and iTunes in 2001. “The 6.5-ounce iPod, a stainless steel device about the size of a deck of cards, can carry 1,000 digital recordings on a five-gigabyte hard drive. It is designed to work with Apple’s iTunes music-jukebox software” (Daw Jones 2001). The iPod is a small, portable device similar to an mp3 player. With the iPod, one isn’t be troubled with maintaining their CD collection; they carry virtually every song in one device. In 2003, the profundity of the iPod advanced: “Apple CEO Steve Jobs is expected to introduce the company’s first Internet music service, which will allow customers to download songs from a broad catalog of music for about 99 cents each or $10 per album,”(“Taking it Online after Years of Digital Piracy”). This meant that users could buy songs cheaply and easily; they would load directly to Itunes where the customer could transfer them to their Ipod.

However, certain motions have made the process of hearing the music difficult for consumers. Different digital retailers provide their music in different formats that are incompatible with the next seller. This is Digital Rights Management (DRM): “Apple, Real, Microsoft and Sony all have competing DRM systems. That’s why a song purchased on Sony’s Connect service won’t transfer to an iPod…a proposed solution to making sure songs wouldn’t be traded illegally” (“Closed Systems Leave Song Buyers Out in the Cold”). As a result, certain CD’s cannot be loaded into iTunes. How one might access their music is limited to its supported devices/software. Conversion of the digital music is possible, but it is a tedious process. Conversely, the MP3 song is available among all P2P file-sharing networks. It is easily accessed and easily ripped to MP3 players amongst various brands.

One might wonder why digital retailers don’t’ use uniform audio formats. The answer is simply, money. Sony BMG and Time Warner wanted to sell popular songs for a dollar and forty-nine cents, but Apple refused to change from their uniform 99 cent per song price. As a result, Sony made their CDs incompatible with iTunes. “The divide among the four record companies reflects …whether the fast-expanding digital market is stable enough to bear a mix of prices…while millions of consumers still trade music free on unauthorized file-swapping networks” (“Apple, Digital Music’s Angel, Earns Record Industry’s Scorn”). In an unstable realm of business, the internet, it is ludicrous to argue over song prices. The major labels should have been satisfied that some people were willing to pay. Arguing over how to price songs, essentially business, will only interfere with effective music sales. And unpopular songs shouldn’t be more valuable than popular songs. Consider that Rhapsody makes a considerable profit from selling unpopular music: “Fully 40 percent of Rhapsody’s sales come from tracks that are not available in offline retail stores, suggesting their’s gold in aggregating those relatively unpopular songs” (Gillespie 62). This means unpopular songs are valuable despite ephemeral, popular niche markets. The price per song was and is the least of the industry’s worries.

As legal digital music furthered, the industry kept cracking down on those who illegally downloaded music. “Last September [as of 2004], the Recording Industry Association of America began suing individuals for downloading music files – more than 340 cases so far” (“Music Pirates Going Clean”). The RIAA contacted universities across the nation to monitor illegal downloaders. College students’ internet activity is easily traced because they connect to the internet through their university’s network. When a student is downloading, he/she uses the networks bandwidth. Eventually the ones whom monitor the university’s network will detect the user of bandwidth. They will be able to identify that user. The “Journal of Public Policy and Marketing” says that penalizing individuals for file-sharing makes criminals out of good citizens. Individuals pursue pleasure as quickly as possible. Illegal-file sharing seems to be the quickest way to attain music. To an individual, file-sharing seems to be less of a crime because he/she does it from their home. But the devotion to anti-piracy is still shared among digital music retailers.

Certainly the sale of digital music is increasing. Between 2004 and 2005, the amount of single units sold increased by 163 percent, and the amount of album units sold increased by 198 percent (RIAA). It seems that people are buying digital music. But were the industry’s attacks on college students effective in stopping piracy? Consider that “Record labels have won court cases…But the software that powered those services, such as Kazaa, eDonkey and WinMX, still resides on millions of computers…more than 1 billion songs are available for illegal trading each month”(“Closed Systems Leave Song buyers Out in the Cold”). As established, MP3’s are unencrypted and work with various software applications and hardware appliances. Eventually, courts have even rules in favor of file-sharing Websites. Grokster, the company that sponsors Morpheus, won a court case in which court essentially states, “What people do with the Websites is that person’s responsibility, not the Website owner’s.” The industry cannot ignore the free collection of music that will inevitably be available to every person with internet access. But it gets worse.

Piracy is so embedded in online music culture that it even found a spot in iTunes. “Apple’s iTunes software was designed to allow people to store songs on one Mac and play them on others on their home networks. But users quickly found a way to tweak the system to share their music collections with a wider group of people” (“Song Sharing By iTunes stirs up Piracy Concerns”). The process of establishing software and iTunes-based shareware network took less than two weeks. MyTunes was born: “Bill Zeller, a 20-year-old Trinity College student, wrote and releasted MyTunes just tend days after the official release of iTunes for Windows. His Web site claims that the application is intended to enable users “to save music from other computers to your hard drive” (Dalrymple MacCentral). MyTunes is a legal piracy; Apple permits iTunes users to share playlists. But this means that one need not buy an iPod, or even purchase a single song from the iTunes music store. Apple nearly solved the music industry’s most prevalent issues in the past five years. But is has allowed piracy to quickly enter its playing field. ) “It took only a few days for users to configure iTunes so that it could play songs stored on computers anywhere on the Internet. That turned Macs into jukeboxes for others to play” (“Song Sharing By iTunes stirs up Piracy Concerns”).

With file-sharing websites serving as legally active alternatives to subscription music Websites, and Apple’s iTunes legally pirated, how is the industry maintaining itself? The industry has resorted to many creative alternatives. They must find sources of income besides the songs themselves because even potential buyers are tempted with free alternatives. It seems that, instead of focusing on marketing songs, it would be best for the music industry to market hardware. Other iPod-like devices are going to be available to the public soon. One example is the Microsoft Zune. It has wireless capabilities. One can share songs between a Zune that is within 10 meters of it, for up to three plays (“Digital Music Beyond “Squirting””). This may be the most convenient file sharing because one does not need their computer to share songs. Apple also has new developments. It now features iTunes on cell phones such as on the Singular Razor V3I and the Singular Sliver. The phone becomes the iPod. One can listen to up to 100 songs on their cell phone. Optimally, there is no subscription to keep iTunes on these phones; it is ideas such as these, with their reasonable convenience, that may help the music industry’s profits.

The industry certainly has struggled because of Napster. The defeat of Napster in court was considered a victory by the industry, but soon after the court gave up on prosecuting file-sharing networks. Also, a nearly infinite library of illegal mp3’s is shared across the internet. It appears that people are drawn to piracy because it is quick and convenient. When legal availability of music and music players is fully optimized, the industry will see the lowest amount of piracy. New music players are coming out to combat the iPod; will this competition take money away from Apple and/or from the music industry? Should digital music be sold by one company? While the USA tries to avoid monopolies, it should consider that profits will divide if digital music retailers divide (And, though it is divided, pirated music is united by the fact that it is free). Creative advertising and unique features available by digital retailers could draw more away from pirated music and towards Apple music.