Picture this… “ You’re at the mall looking for a Christmas present for that special someone. With only twenty dollars in your pocket, you notice a music clearance at the local HMV music store. Your eyes are drawn to a particular CD entitled the “ Temptations- Greatest Hits. ” You notice the price of the album is $18. 99. Your facial expression is not what it was before. To your left you notice a case of blank Compact Discs on sale for $4. 99. Immediately the word “opportunity cost” rushes through your mind.
You ask yourself, “ Do I spend twenty dollars that took three hours to earn to purchase the CD or spend five dollars, plus five minutes of my time to download the same album from Napster. ” This is one of the many problems that most record companies are facing today. It is largely due to a program called “Napster”, which can be downloaded for no charge from the World Wide Web. This software allows music lovers around world to search and download any of their favorite songs. Napster has undergone heavy scrutiny by encouraging the distribution of downloaded music files from major record companies “free of charge”.
With over thirty-two million registered members of Napster, it has become the world’s leading person-to person file sharing community and the fastest expanding on-line music website in the history of the Internet. Napster brings a high level of excitement to music fans through their easy to use website which provides a high quality standard of service for exploring new music. Napster’s software enables users to find and share music files with convenient easy-to-use features such as Instant Messages, detailed searches and chat rooms.
In 1999, a young man named Shawn Fanning who then was attending Boston’s Northeastern University as a freshman founded Napster. Through this technological invention, Shawn Fanning received numerous industry awards for technology, creativeness and marketing. In October 2000, the company Napster won several of the highest awards such as best Guerilla marketing, best music web site and best innovative start up. To every success, there is a downfall. With Fanning’s innovative idea of music file sharing, record company revenues are gradually decreasing.
As the demand for music increases, purchasing CD’s at a price ranging from fifteen to twenty dollars is now being provided on the Internet for free. This in turn is causing record companies such as Sony, Universal, EMI and Warner to lose vast amounts of money for the simple fact that people are downloading their product for a cost of nothing. In relation to supply and demand, if the price of music decreases the demand for music increases. Napster has dramatically affected the annual sales revenue of some major artists such as Dr.Dre and Metallica, at the same time violating copyrights.
Annual revenues of major record companies include 6. 2 billion dollars (universal), 4 billion dollars (Warner), 3. 5 billion (EMI) and 6. 7 billion (Sony). These are astonishing numbers. Since the interference of Napster, many of these figures will drastically be affected in a loss of revenue for these companies. For example statistics have shown that for every five music listeners only one will actually purchase the CD. With approximately thirty-two million users, the format MP3 is used to exchange music files.
There ain’t no such thing as a free lunch. ” Napster members believe that the downloading of music is “free” but technically the “free music” is coming out of the pockets of the record companies that provide it to the public. Napsters officials have contemplated whether to be a “ free promotional music service” or “ one that would charge a monthly fee” to registered users. Earlier in the week of October 20, Hank Barry (chief executive officer) of Napster suggested a monthly flat rate payment of $4. 95 US/month ($7. CND) to all members of the Napsters community.
Major recording companies such as EMI, Sony, Universal, and Warner have all said they will continue with their lawsuit for copyright infringement. Artists such as Dr. Dre, a well-established gangster rapper of the hip-hop world has drawn offence from Napster. In a recent music awards show Shawn Fanning presented himself wearing a Metallica t-shirt. This did not sit well with the band as cameras zoomed in to realize the expression on their faces. This whole ordeal has resulted into a chief issue.
Lawsuits are being brought forth due to copyright violations. Both sides have taken this matter to court. On November 14, 2000 judge Jed Rakof of the US District Court awarded Universal (record company) up to $250 million US of financial penalties caused by the web site called “MP3. Com”. Napster’s defense was to seek immunity under the Audio Home Recording Act of 1992, which states the strong protection against non-commercial copying of digital and analog music recordings. This is one of many problems occurring in the world of copyright infringement.
It happens everyday with authors, the music industry, students and so on using someone else’s work and claiming it as their own. The whole issue has resulted in a waste of people’s time, effort and money. What Napster has done was wrong. Stealing music that belongs to other record companies and exploiting these files through the Internet for users to download for free. There is a moral conduct to be met and Naspter has not. It is wrong on to deprive someone credit of their work, and use it to your own advantage.