COURSE CODE: APG4398
NEW COMMUNICATIONS MEDIA
ESSAY # 4: FINAL ESSAY
Using a specific new media example of your own choosing, compare and contrast one aspect of one new media; how it has shifted, what are its strengths, what has it replaced, complemented or is new. Provide contextual framework describing and the analysing how they function within society.
From CDs to MP3s: Piracy and the Transformation of an Industry
- The impact of personal computers, the Internet and new digital media formats on the music industry, copyright laws and consumer behaviours.
By Karyn Scottney-Turbill
Monash University
Advances is digital technology have revolutionised the very way in which media is distributed and consumed. Digital media innovations have immensely improved the initial quality of audio and visual recordings, as well as subsequent reproductions (Goel, Miesing, Chandra, 2010, p1p1), and have bought about revolution within the music industry, as the debate over legal and illicit downloading rages on. Such new technologies have rapidly altered consumer behaviours, and the industry has been forced to redevelop existing business models, facing serious losses in the retail sector.
As such advances in technology lead us to an “era of unprecedented knowledge, cultural reproduction and dissemination, we are challenged to reconsider the fundamentals of copyright law” (Fitzgerald, 2008, p2), and are left to analyse the consequential effects of digital technology and new media. Developments in information sciences in the 1980s, including the introduction of personal computers, made digital technologies like the Internet a reality. The subsequent creation of the MPEG-1 Audio Layer-3 (MP3) format, soon lead to the birth of Napster, the outbreak of the phenomenon of peer-to-peer (P2P) file sharing, Internet pirating, iTunes, and rendered the compact disc all but obsolete (MP3 Developments, 2011, p1-3), with MP3s now the preferred medium. While some prospered from the transition, others believe this technological revolution caused the near death of the music industry (King, 2002, p1and Kravets, 2007, p1).
The music industry “attributes an erosion of sales after 1999 to the illegal copying and sharing of digital files and has taken steps to tighten copyright laws and prosecute violators” (Goel, Miesing, Chandra, 2010, p1), with the losses all but crippling business. In 2009, the International Federation of Phonographic Industry (IFPI) estimated a staggering 95% of downloaded music, within that year had been downloaded illegally (BBC, 2009, p1 and Gloor, Rolston, 2010, p1), without payment to the creators or industries producing it. Yet, others “attribute the downturn to a lack of innovative products and futile efforts by the industry to retain a business model made obsolete” (Goel, Miesing, Chandra, 2010, p1) by progressing technologies, as this is merely a transitional stage of progress, and unavoidable. They believe that such innovations are only capable of destroying business if the industry continues to resist such advances, rather than embrace them (Leckenby, 2003, p25 and Goel, Miesing, Chandra, 2010, p1). This cannot be said for Apple however, who has since secured a strong hold over the industry. Their innovative and successful attempt to secure the new media market was initiated by the introduction of the Apple iPod and the simultaneous roll out of iTunes, their own digital music store in 2003 (Mumbi Moody, 2010, p2).
Underlying the term new media, fundamentally is the digitisation of media and, such new media technologies “come about based upon a ‘platform’ of traditional media which have preceded them” (Leckenby, 2003, p25). This is dubbed “the ‘Transference Phase’ of media development” (Leckenby, 2003, p25) and digital radio is a brilliant example of this, with the successful shift from analogue radio waves to the increasingly popular channels available online and through digital media devices. With the continual reign of digitisation, of the Internet and of new media technologies, many sectors of the media and entertainment are being forced to endure profound transformations within their industries.
Innovations in technology have always led to progressions in the music industry, causing periods of transition to new formats, from existing methods of audio engineering. The industry has come a long way since Thomas Edison’s phonograph revolutionised the world in 1877 and from the introduction radio of in 1923 (Audio Engineering Society, 1999, p4). This medium, originally invented for military communications during the First World War, became the feature of the domestic space from the 1920s (MP3 Developments, 2011, p1-3).
Before digital technology became a reality in the 1980s, innovations in analogue technologies continued to transform music, with the invention of ‘long players’, or LPs in 1947 (MP3 Developments, 2011, p1-3), and the introduction of the first pocket transistor radios by Sony in 1954 (Audio Engineering Society, 1999, p15), noteworthy as being the first portable, personal media devices. Other notable advances were made by Phillips, who created “the first Compact Cassette tape format, offer[ing] licenses to the world” (Audio Engineering Society, 1999, p15) in 1963, followed soon after by the introduction the Walkman, by rivals Sony, in 1981 (MP3 Developments, 2011, p1-3). That same year, Phillips came back, inventing the Compact Disc, which saw the death of the audio cassette and later, the rise of the ‘discman’ (Audio Engineering Society, 1999, p15). However, the biggest threat and challenge yet to traditional models of production, distribution and reception came about from advances in information sciences during the 1980s.
The development of the 16-bit personal computer, rolled out by IBM in 1981, and followed by Macintosh with their Apple Mac in 1984 (MP3 Developments, 2011, p1-3), initiated the “digitisation of production [which soon] spread through all of the major cultural industries” (Hesmondhalgh, 2007, p 242), paving the way for the Internet and marking the gradual and progressive shift toward the Information Age. Apart from the creation of the personal computer and Internet, one of the most significant innovations altering the music industry, was the invention of the MP3 format in Germany in 1989 (MP3 Developments, 2011, p1-3). This new media became widely available to consumers in 1998, when MP-3 players, devices to play downloaded audio files (Audio Engineering Society, 1999, p15), hit markets worldwide. MP3s have a lossless quality and the simple format and ease of distribution means the digital medium became rapidly popular and simply the preferred medium of audio consumption (Hesmondhalgh, 2007, p 245 and MP3 Developments, 2011, p1-3).
Then in 1999, in America, a nineteen-year-old college student’s development “proceeded to redefine the Internet, the music industry and the way we all think about intellectual property” (Tyson, 2000, p1), with the invention of his file sharing software, Napster. Once boasting “eighty million registered users, the revolutionary software” (King, 2002, p1), encompassed a search engine of MP3 files, derived from other user’s computers, peer-to-peer (P2P) file sharing tools and Internet Relay Chat (IRC) to locate and communicate with other Napster users (Tyson, 2000, p2). This new concept of peer-to-peer file sharing meant users, when accessing music via Napster were in actual fact downloading MP3s from another user’s machine. Collectively, these users had access to thousands of music tracks, and the ability to illegally and freely download them. This sent shockwaves through the music industry, seriously rivaling their previously unchallenged powers of production and especially distribution, and, in doing so, drastically reducing their profits. According to Jeff Tyson (2000) this ‘decentralised approach’, means there was “no central server maintaining the index of users, [and] no easy way to target and stop the use of the program” (Tyson, 2000, p2), presenting an exceptional, unprecedented dilemma to both the industry and the advocators of copyright law.
However, within the first year of its’ introduction, the Recording Industry Association of America (RIAA), representing an alliance of record labels in the United States, began judicial action against Napster. The RIAA, in their filings, argued Napster “should be held liable for enabling millions of users to share music for free, depriving artists and the publishers and producers of music of revenue they are entitled to under copyright statutes” (CNN, 2000, p1). This was seen as the most fundamental case “involving the application of copyright laws to Internet activities" (CNN, 2000, p1) and was presented before a three-judge panel of the 9th U.S. Circuit Court of Appeals. While the RIAA had the obliteration of Napster firmly in their sights, the wheels of progress remained in motion, and in 2000, Internet provider AOL’s Justin Frankel “released Gnutella, a new file-trading application, into the world” (King, 2002, p1), which AOL subsequently co-opted. Yahoo and Microsoft followed suit, with their own versions of file sharing software (King, 2002, p1), and an already agitated industry was left to face the reality of the infiltration of peer-to-peer file sharing and the seemingly unstoppable dominance of illegal downloading.
The RIAA was eventually successful and “accomplished its goal of serving Napster with a copyright infringement lawsuit” (King, 2002, p1), but by this point Napster was already a global phenomenon, and easily replicated. Seven years after litigations began, Bertelsmann, one of Germany’s largest media conglomerates was forced to pay “the National Music Publishers Association one hundred and thirty million dollars to settle the Napster case’s final copyright claims” (Kravets, 2007, p1). Bertelsmann was found to have financed Napster, “thereby allowing Napster to continue allowing millions of users to pilfer music” (Kravets, 2007, p1), and was the final junction served in the case against Napster, originally filed in 2000. During the trials, Napster was forced to cease its operations as a free file sharing network and has since been re-launched as a paid music provider. Yet the basic peer-to-peer model it initiated was now unstoppable (Kravets, 2007, p1). In 2010, following the successes of litigations against Napster “the company operating LimeWire file sharing service was found liable for copyright infringement” (Gloor, Rolston, 2010, p6), in another noteworthy case filed by the RIAA, four years prior, in 2006 (Gloor, Rolston, 2010, p6).
Such digital technologies, deemed new media, were set to challenge copyright laws of a number of nations, which in the case of the United Kingdom, had remained unchallenged for three hundred years (Hough, 2011, p1). Copyright infringements are taken very seriously by creative industries and judicial systems. The laws of “copyright apply to works which are still within the period of copyright protection [and the] duration of copyright varies according to the type of copyright material” (Music Australia, 2008, p1). Copyright laws state that the “use of copyrighted material without permission may constitute infringement” (Herreman, 2009, p9) invoking cases of various liabilities against each defendant. Most consumers however, in their ‘format shifting’ of music… from personal collections onto MP3 players” (Walsh, 2006, p1) are unbeknown to the fact they are actively committing such offences.
In light of advancing digital technologies and the popularity of new media devices, some governments have since reviewed Copyright laws, reforming them to discount such behaviours. Such steps have been taken by the Australian government, who in 2006 announced that “transferring music from CDS onto iPods and other MP3 players [would] no longer be illegal” (Walsh, 2006, p1), with the federal cabinet’s ruling defining a momentous change to Australia’s long standing copyright laws. Member of Parliament, Philip Ruddock, in making the announcement, went on to warn of the repercussions of the illegal downloading of copyrighted content. He announced that police would have the authority to issue hefty fines and courts the “powers to award larger damages payouts against internet pirates” (Walsh, 2006, p1), demonstrating the combined work of the police, legislative forces and creative industries, in their tireless attempts to wage a war on illegal downloading.
Many involved in such debates over the legality of copyright infringements, believe Internet Service Providers (ISPs) should be monitoring illegal file sharing and downloading, taking action against offenders, or if not, at the very least, reporting them (Gloor, Rolston, 2010, p6). In 2010, the United Kingdom took such steps, with the introduction of the Digital Economy Bill; a ‘three strikes’ system to be employed by Internet Service Providers, notifying users of violations regarding the downloading unlicensed materials. As the explanation suggests, such violators will be given three written warnings, before disconnecting there services, temporary, or in the cases of serious or repeat offenders, on a permanent basis (Gloor, Rolston, 2010, p7). Other countries have since followed suit, with their own versions of such bills of culpability, including the United States, with the introduction of the SOPA Act in 2011 (The Shontell, 2011, p1).
The actions of the music industry in recent history have highlighted a clear unwillingness to accept what they see to be the converse results of digital formatting. Many have refused to adequately remodel existing business structures to suit the current digital climate, also in denial of the pros of such new media technologies. The exception has of course been Apple, who has not only embraced such new technologies, but has used innovations in digital formatting to accelerate business and profits, and, in doing so, surpassing their once dominant competition. According to Bill Werde, editorial director at Billboard, such moves have secured Apple “80 percent, 70 percent market share in that digital space” (Mumbi Moody, 2010, p2), attained through their online music store, iTunes. Regardless of Apple’s efficacious re-modeling and on-going success in the digital market, other sectors of the industry continue to resist the transition, with few attempts to produce a reasonable online retail market model.
Tony Wadsworth (2009), chairman of BPI has worked tirelessly with governments in their efforts to counter pirating, which is occurring in plague proportions. However, in light of the undeniable benefits that also come with such new media innovations, stated that such developments have “meant music is consumed in more places in more ways than ever before” (The Independent, 2009, p1), which of course is invaluable. Nevertheless, he reiterated the importance of artists and producers getting paid what is due, to ensure fair use and to guarantee the future of the industry (The Independent, 2009, p1).
The outrage of lost profits and issues of piracy have underpinned the slow progression of the industry, to embrace new digital formats. The International Federation of the Phonographic Industry (IFPI) “represents the recording industry worldwide, with a membership comprising some 1400 record companies in 66 countries and affiliated industry” (IFPI, 2012, p1) and attributed the profit losses from the retail sector, to a seven precent decline of the world music market in 2008. According to the IFPI, even though digital sales were increasing, they failed to parallel increasing losses from CD sales (IFPI, 2012, p1).