The RIAA, Napster, and File Sharing
Update, Dec. 15, 2002 Tim O'Reilly, CEO of O'Reilly & Associates expressed a much more eloquent discussion of this topic on Dec. 11, 2002 on openp2p.com. Please click on the following title to go there and read it: Piracy is Progressive Taxation, and Other Thoughts on the Evolution of Online Distribution
For quite a while now the RIAA has been involved in a campaign to stop people from sharing music on the Internet. They have been successful in shutting down Napster. The RIAA says the reason for this is that sharing music files hurts their business. I think they have a completely different reason for fearing file sharing.
Several studies suggest that file sharing actually increases CD sales. It seems people will download some music by artists they may not have heard. If they like what they hear, they generally will go out and buy the CD. Of course the RIAA chooses to ignore this because it doesn't address their real fear.
The RIAA is made of of the few major recording studios. Together they get to dictate which musicians get marketed, what the terms are, and what price music customers pay. The Internet poses a real threat to this monopoly. What if small bands could directly market their music to fans? The price could be substantially lower than the $15 to $20 per CD the major labels charge. The band itself would retain a much larger profit than they would get through a record label. This is the real fear the RIAA has of the Internet. They are afraid they will soon be obsolete.
Have you ever wondered why CDs cost so much. Back in the 80's, CDs were more expensive than cassette tapes. This could be justified because the production cost of CDs was still high. Now, however, the cost for a single mass-produced CD is almost nothing. Yet the cost of music CDs has only gone up. If one were to follow the rules of supply and demand, it would seem the price should fall. Every year more and more music is produced, so along with all the "old" music, there is an increasing supply of music. Yet the price remains high. The reason for this is greed. The record labels can get away with it because they have a monopoly. For now.
If the RIAA was really interested in stemming the flow of unauthorized file sharing, there is a simple solution. They could reduce the price of a CD to, say, $5. Most of the kids who buy music would still spend the same amount of money. They would just buy four times as much music. At $5 per CD it becomes easier to just go buy the CD than to download all the (possibly poor quality) MP3s from the 'net.
For information on what the artist Janis Ian thinks about file sharing and the RIAA, visit The Internet Debacle - An Alternative View. Also check out her website
Well, the RIAA won't be the first group of idiots to sink their own ship.