Did file swapping (mp3 trading) help or hurt the record industry?

OK we had some time to look at this one *apser has come and gone and now we are dealing with direct P2P networks like *azaa & *orpheus. We have all heard the record industry cry how much money they are loosing. But also remember how areas that have the greatest number of file swapping have had the greatest # of sales. Now the record co’s are stating that their revinue has dropped from 40 bill to 25 bill.

I don’t doubt that their revinue has dropped but 2 things that makes me suspect as to where they place their blame, the 1st as pointed out above is that sales have increased with increased file swapping, at least innitially. And 2nd is the dot-com bubble burst late 99 and people just don’t have the money to buy luxery items anymore and music CD’s fall into that catagory.

So I think the RIAA is using this as an excuse to shut down file swapping.

**Now This is very importaint:

1 - this is not about the morality of file swapping.
2 - this is not about the legality of file swapping.
3 - this is not about the constitutionality of the DMCA.
4 - this is not about the right of the RIAA to enfore the copywrite laws
5 - this is not about the questionable marketing practices of the RIAA

It is ONLY about does file swapping lead to an increase in sales or a decrease in sales?**

If the RIAA wants to enforce their copywrte in a way that actually reduces their revinue, that is their decision to make and is not the point of this thread.

I think that’s a very difficult question to answer factually, because there’s one variable that simply can’t be tracked. Now that studio-quality CD burning is possible on a household level, and digital recording technology can be built into every home computer sold, it’s my belief that a great many artists are going the independent route instead of submitting their stuff to the labels.

In other words, the record industry may have decreased sales, but that only counts the number of albums that pass through their own hands. The labels no longer have a monopoly on the once-expensive CD-pressing (burning?) equipment.

Given the difficulty of obtaining a recording contract through normal channels at a label, the rights the artist must sign away, and the typical contractual restrictions on the artist’s freedom, I’d guess that part of that decline in record-label sales is the do-it-yourself recorders.

You can now purchase a 16-track digital recorder with CD burner built-in for about $1200-$2000 US. Digital sound processing, about $250-500 US per unit. Good quality microphone, $250-500 US. Software $100 US or less. PC CD-RW internal, $60-100. It no longer requires three weeks in a studio at $150/hr, plus engineering, to record an album; one no longer needs to produce 50,000 albums (just to name a figure) in order to make CD printing cost-effective. You can even buy printers that will print directly onto the CD face itself. I imagine that an artist with his own gear can record and burn his own music, print the liner notes, print the CD face, and sell the thing for $4.50, and still make more profit than a commercially-distributed print sold for $20.00. (The artist’s royalties are between three and five percent gross, out of which pays for promotional copies, breakage, studio time, agents, lawyers, his own advance, any promotional tours, and so on.)

So I don’t know how you’d go about answering this question. My guess is that the RIAA is finding that its business model has become obsolete in the advance of cheaper home-recording technology, and it is now loudly complaining about being cut out of the action.

Couple this with the lawsuit that demonstrated the labels were overcharging for their CDs, and of course the sales figures will drop. The labels are probably giving a very skewed perspective of some limited facts in order to justify their actions (however legal and appropriate those actions may or may not be).


I’m not going to go ahead and make the assumption that every person who downloads mp3s does so with the same intent that I do, so I will only answer this thread by posting my personal experience. In short, downloading mp3s has caused me to purchase many more CDs than I ever would have otherwise. This was mostly due to Audiogalaxy (a network that was also shut down by the RIAA) which allowed me to discover and experience underground bands I would have never heard of otherwise (Kazaa and Morpheus aren’t nearly so useful as very few users seem to have mp3s from these sorts of bands).

This brings me to my personal theory (totally unresearched, I’ll admit) on the subject: the RIAA doesn’t like mp3 sharing because they cannot easily control what the masses listen to. I guess I’m just inclined to the notion that RIAA is in cahoots with MTV and the like in conjunction with the vast majority of public radio stations. They (the RIAA, MTV, etc) want to control what the public has access to and therefore they can make the decisions of which musicians become successful. Conversely, peer-to-peer filesharing is largely uncontrollable and therefore becomes a hitch in any such plot, should it exist.

Btw, if anyone could help verify/debunk this theory, I would be grateful.

I think that Windoz is the most traded/pirated/downloaded software in the world & look at Gates, who is/was the richest person in the world…Why shouldn’t music be like that?

" Did file swapping (mp3 trading) help or hurt the record industry?"

What if only deaf people traded?

handy – hard to tell if Gates became rich because of pirated software or in spite of pirated software.

Evil Sponge – interesting theory. I’d be curious to see whose work was most traded over the internet. I have a feeling it’s not the case that the major labels [and today’s hitmakers] are losing out because everyone’s busy downloading cool underground grass roots stuff. If everyone were downloading underground music, it would cease to be underground. As it is, I think the major labels are trying to keep you from getting Eminem and Madonna for free.

Kanicbird – my guess is it depends on what most people are downloading. My guess is that the most popular music to listen to is also the most popular music to download. After all, it’s not just geeks that have computers. If it were just geeks, then downloading would skew geeky.

My guess is that for the major labels it hurts them almost as much as they claim. Possibly it’s less of a problem for the small independent labels, but consider this: for an independent label to offer a few teaser tracks to download from the company website does not stop someone from posting a greater number of tracks from the same artists in their P2P directory.

I also find it hard to believe that the average consumer takes into consideration the relative financial position of the artist or their label when deciding to download their material.


I doubt there’s a deliberate conspiracy between the RIAA and MTV or anything like that, but your ideas are not without merit. You may be interested in McChesney’s Corporate Media and the Threat to Democracy.

I think it has probably hurt it…cd prices have fallen from around 20 bucks, to closer to ten (I just bought Theory of a Deadman’s cd for 11). If they weren’t hurting a little, they won’t have dropped the prices. Or maybe I’m a bit dense. I don’t know


The record industry is there to make money. Do you really think if they thought they were making money from “sharing” they’d be so upset about it and take every step they can to shut it down? Don’t you think they’d be encouraging it like crazy?

Don’t you think the record companies have CFOs, accountants and other financial people on the payrolls? You think they don’t have market analysts and projectors and such on the payroll? They’re very aware of where their money comes from and how to make more of it and how to make less of it. This isn’t a hypothetical message board discussion to them; it’s their bread and butter, and to the tune of billions of dollars.

Those people who argue their stealing is actually putting money in their victims pockets are just pitiful.

Get real.

The Film industry vociferously opposed VCRS. Now they profit from it enormously.

The TV industry opposed cable TV (they called it “Pay TV” back then); now they are a part of it and profiting greatly.

The musicians’ unions opposed recording of any kind; opposed stereo when it arrived on the scene, yet a large part of their members’ income now comes from stereo recordings (CD, film, tape, etc.).

And even the radio industry was worried about TV, but now they advertise TV shows on radio.

No, just because an industry is in the game to make money doesn’t mean they know what’s best for themselves in the long run, or even that they know which way the economic wind blows. People can be blinded to the status quo.

Where in God’s name did you find a mainstream vendor that sells CD’s for only ten bucks??? Last I checked, Amazon.com was still listing everything at $18.99, aside from the occasional sale.

…or were you talking about independent vendors, who specialize in “niche” markets and offer deep discounts to those lucky enough to find them? Places like CD Baby and The End Records – you won’t find the new Britney Spears album there, however.

Oh, and I should point out that those “niche” discount vendors are doing quite well, despite a limited, non-mainstream selection and (what seems to be) rampant mp3-trading. Hell, they are probably succeeding directly because of mp3-trading! God knows, I’ve ordered quite a few things from both places, based on an mp3 or two I found on K*zaa or similar.

Which, of course, supports my theory that the RIAA’s main line of attack is to consolidate the whole music industry into one big Top 40 Radio Station where you only buy or hear what they WANT you to buy or hear, and wipe out all the pesky little guys on the sidelines. That’s why they went after Internet Radio, after all.

KGS there are lots of newer artists putting their CD’s out fairly cheaply. CD’s I’ve bought for under $12 (either on sale or regularly low-priced) included:

Butch Walker - Left of Self-Centered
White Stripes - Elephant
Ben Kweller - Sha Sha
Queens of the Stone Age - Songs for the Deaf
Yeah Yeah Yeahs
The Raveonettes - Whip on it

I know there are others I’m not thinking of, as well. Best Buy is a good place for decent CD prices. I’ve seen very few $18.99 CD’s; please don’t tell me you shop at $am %oody. :eek:

As for the OP, I can only speak for my own experience. I’ve bought more music in the past year because I was able to try obscure stuff out before buying. In the past, I’ve found little on the radio that struck my interest, so I didn’t have much motivation to open up my wallet.

One thing that’s worth considering is that not all labels are affected the same way. While a bigger label might lose a greater total amount of cash, they’re in a better position to take the hit (more resources). Smaller labels might be in more trouble. I know that when I interviewed the owner of one well-established label in Chicago, and he said he was losing hundreds of thousands of dollars a year in sales (his estimate was $100,000 two years ago, and $200,000 each of the last two years). He felt the economy was a factor, but primarily blamed music piracy. It’d be mighty hard for me to understate how pissed he was at ‘them.’

He had an interesting analogy - I said I thought some students swap files because they think CDs are too expensive. He replied “A car costs $30,000 these days, does that mean it’s OK to steal one?” :smiley: Colorful guy.

Musicat has a point in that in time, the new technology will surely be used in a way that is more beneficial to the music industry. That always happens. It’s not going to go away, so they’ll figure out a way that’ll make everyone somewhat happy - the people will get their downloaded music, and the industry will make some money. At the moment, however, I would say the music business is definitely being hurt.

Musicat wrote

Uh… Friend Musicat, VCR tapes are sold for money. Cable is paid for by money. Recordings are paid for by money. Stereo recordings are paid for by money. television pays money.

“Sharing” or “swapping” as the lovers call it – or “stealing” as it truly is – is not a new channel to deliver art to the masses, as each of your examples were. It is a way to steal existing content.

Very very different.

Oh, I’m sure it’s hurt the record industry.

What I’m curious about is… what has it done to music?

An anecdote:

I read The Onion’s AV Club reviews every week; they’ve got actual sane reviewers, most of the time, which is rare. Sometimes, if I read a good review, I’ll download a few tracks by the artist. If I like the tracks, I’ll go out an buy the CD.

Three weeks ago, I bought three CDs: The Decemberists Castaways and Cutouts, Damien Rice O, and Unwed Sailor The Marionette and the Music Box. None of which I would have bought if I hadn’t been able to hear them. None of which are getting any radio airplay in my town at all. All of which are excellent albums.

So, I downloaded a few tracks. I bought the CDs. I told some friends about them. I even reviewed one on my website, and I plan to review all three in the next couple of weeks.

A theory:

Radio has a stranglehold on music these days. I’ve heard any number of people claim that there’s nothing good out there, there’s no original music, they don’t like music anymore. Well, I think there’s nothing good on the radio. That doesn’t mean that there’s nothing good being made. With the advent of internet radio and file sharing, people with specific tastes can now try out new stuff that they don’t hear on the radio.

I believe that radio is, by nature, populist; it’s designed to appeal to as many people as possible. In order to do that, it’s limited in how sophisticated it can be; if it outstrips the sensibilites of most of its listeners, ratings drop. And so, radio tends to cater to a certain age group, and a certain level of sophistication, that a lot of people outgrow eventually. At which point, they complain that there’s no good music out there anymore. And then they stop buying music.

I think that, in the long term, the ability to easily try out new and different bands and genres than are offered by radio is going to encourage listeners to keep expanding their musical horizons once they’ve outgrown what radio has to offer. I think that with time, the music industry is going to see that their target market has expanded beyond the teeny-boppers who they’re used to catering to, and that older people will be buying CDs at the same steady pace they did when they were young. I think exposure to variety, to challenging, broadening music will keep people coming back to the CD stores, buying new stuff by artists they first heard online.

I’m also grateful that bands like the ones listed above, bands that don’t have a chance in hell of getting airplay but deserve enormous recognition, are getting heard. I think that the future of music looks intensely bright.

But I think that unless they adapt, the record companies are screwed.

I was introduced to all my current favorite bands through mp3s- someone would send me an mp3, I’d listen to it, like it, download a few more, like them, and then buy the CD.

With CD prices the way they are, I’m not going to shell out unless I know I’ll like the music- I don’t buy new bands’ CDs on the fly.

I think file sharing helps independent bands pick up new listeners.

On the other hand, many people buy pop CDs from hearing and liking 1 or 2 songs on the radio- songs they can easily pick up as mp3s, forgoing the rest of a mediocre album.

So I guess I can see it benefitting the little guy more than the pop stars. But what do they need the help for? Sheesh.

To many bands that were denied access to conventional record distribution, swapping thru the Internet IS a new channel to deliver art to the masses, and a godsend.

All the technologies I mentioned (VCRs, stereo, radio, etc.) were opposed by the entrenched powers because they thought they would lose money if widely adopted. Sure, video tapes are sold, not given away, but the studios thought that would decimate their main source of income, movies in theaters. They were also worried about rentals.

“Put our music on the air? For free? Then nobody will buy our records!”

“Record musicians in stereo? Never! That’s two channels – only if you pay us twice!”

Many things are given away in the expectation that the giver’s income will be enhanced in the long run. All advertising falls in that category. My newspaper is paid for more by advertising than subscriptions, and most web sites, ditto.

The Grateful Dead is well-known to not only allow, but encourage home tapers at their concerts. Did that reduce record sales? They didn’t think so. And it earned them considerable fan loyalty, which probably translates into money in the long run. In contrast, the war the RIAA has just unleashed on the public may have just the opposite effect; at least that’s what I predict.

But I am not proposing that all music be made available online free. As many others have suggested, and Apple’s Itunes seems to support, a reasonable, but small, fee per song is quite acceptable to the public, yet very profitable to the industry.

If you haven’t read Janis Ian’s opinion on this matter, I recommend these URLs, below. In one, she proposes making large, out of print music catalogs easily available for US$.25 per song, and challenges the industry to try it as an experiment. She thinks it would be a win-win situation all around.


I don’t have a cite handy, but I seem to recall that CD sales were up during Napster’s heyday, and we know they are down now that Napster is no longer. Maybe one didn’t cause the other, but it’s interesting to speculate.

I am another of the try first, buy later downloaders, and it has kept me buying CD’s, and discovering new artists and genre’s.

Only problem, is that the majority of people downloading music are the same people who listen to Britney Spears/Madonna/Insert Mainstream Pop Artist Here. In a lot of those cases, the CD’s are just the standard industry stuff that gets played all over the radio, but isn’t really worth listening too. Only problem with that, is that those tracks are the industry’s major cash cows, so the hit that downloading takes on them far outweighs what the more picky person downloading tunes to try them out is purchasing. If someone can download both of the tracks off of the latest Britney Spears CD that are getting all of that radio play, then what incentive do they really have to buy the cd, when they can just take those two tracks, the two good tracks off of Christina Aguilera’s CD, and a few tracks off of another, mix them, and burn their own CD that is now completely lacking filler tracks?

I might use the internet to download some tracks from The Ataris, then realize that I like the band and buy a CD, but that doesn’t mean that everyone does.

I’ll jump back in here to restate my original opinion, which is that words like “help” and “hurt” are difficult to quantify. In order to do that, you’d have to see how many total titles were released by the labels, over time; the price of the average titles, over time; and compare this to something like the consumer price index, the GNP, or some other measure of the stability of the economy. And the impossible one to calculate: how many people download the mp3, then buy the album?

Are they releasing the same number of titles? I doubt it. A lot of bands can now afford to home-record. But this could mean there’s an explosion of titles that the labels would never have recorded in the first place. Perhaps the labels are angry that they’re being bypassed by the home-recording and home-distributing technology? “Hey, you can’t release that album yourself! Let us do it for you and make 95% of the profit! You can’t do this to us, we’re Columbia Records!”

Are they selling CDs at a similar rate to other less-robust economic times? Maybe. CDs aren’t a priority with a lot of people, though music is.

Conventional use of radio is a similar comparison to mp3 trading, because it allows the listening audience to sample for free what they would never have paid for sight-unseen. (Ear-unheard?) However, since the fidelity of mp3 is so high, unlike radio, the computer file can be used as a substitute to buying the album, especially as it can be burned to a CD by the user.

The question I have for the downloaders, however, is this: if you don’t think the track is worth buying the CD for, do you delete your free sample off your hard drive? That would be the ethical thing to do. Deleting the track would make the “free sample” analogy to radio work, in which case, no harm done greater than that which radio has already done.

I don’t want to steer this into the ethics of whether this kind of access to music is right or wrong. It’s just worth pointing out the similarities to radio, and the differences.

I’m sure the record industry is overstating its losses. (Sort of like Major League Baseball.) Because of home recording, bands that are now able to print their own CDs, and the decline of the economy, it’d be hard to put a dollar value on it.


In the year since I’ve cable internet, I’ve bought around 60 CDs. Most, if not all of these purchases, were due to being able to try music at home (from my beloved cable) and then go out and buy the record.

I hardly think that the recording industry hates people like me who buy 60 CDs a year based on a try-and-buy system.

Fish, in response to your question of whether downloaders delete after deciding not to buy the album: I do not. I do, however, agree that it would be ethical to do so.

Now I’m going to shift the blame (I’m an American, it’s what we do). I wouldn’t feel the need to download to find the music I liked if it was available on widely-accessible media (Radio and MTV, I’m looking at you).If they played the music I loved on the radio, I would listen to it and I probably wouldn’t download (I also might forego buying the album). If MTV played the music I loved, I would watch it every day.

I don’t think the problem lies with people wanting access to the music they like, it lies with the mass media failing to provide it.

Fuck those who paint us all with the “thief” brush. I may be violating copyright, but I’m not a thief.

I don’t think file-swapping has helped music sales. I agree that part of the problem with declining sales is the whole “one album with two good songs and nine tracks o’ crap”, but human nature dictates that people who get something for free aren’t going to pay to get the exact same thing. Just look at Microsoft Office for an example – people have pirated that suite so much that they’re now asking $300-$400(!!!) for a measly word processor.

(Examinations with Microsoft’s financial success aren’t valid because the recording industry doesn’t have a one-company monopoly. Especially not one built up through illegal means.)