Illegal Downloads and the Affect on the Film Industry

12 December 2017

The youngest consumers hold favorable attitudes towards illegal downloading which is grounded in a norm of copyright infringement and belief in the Internet as free. Finally, it was found that affinity for the recording artist serves to moderate intentions to download illegally. Overall, the results have implications for measures to counter digital piracy and to encourage willingness to pay.

Furthermore, they question the long-term viability of the subscription-revenue streaming business model. 2- MASC. Dissertation Theodore Gillette As the MPH continues to replace the compact disc (CD) as the preferred format, demand for digital music has grown tremendously. In 2010, the market for digital music accounted for approximately 47% of total US music shipments, up from Just 9% n 2005 (Friendlier, 2010). Consumers have access to an array of download stores, music streaming services, and Internet radio websites. Music streaming services in particular have attracted considerable attention.In Sweden, two of the world’s largest record labels generate more revenue from Spottily, than they do from any other source (Landfall, 2011).

These trends are not confined to European or American music markets. Baud, China’s largest online search company, recently signed a deal with rights holders to license music on its website for both free download and streaming :While, 2011). The surge in popularity has led some to believe that the digital music market represents the recording industry next sustainable business model, along Ninth diversification into live events and merchandise.However, relatively little is understood about the consumer who uses a combination of legal and illegal sources to acquire music a la carte. In the decade prior to the Internet, the music industry Nas relatively healthy overall with worldwide sales peaking in 1998 (Bam, 2010). Since then, peer-to-peer (POP) networks such as Anapest have contributed to the decline in sales of CDC. There is some disagreement about the extent to which file sharing has negatively impacted the recording; however, evidence points to copyright infringement as a significant factor.

The digitization of music effectively removed the industry monopoly on high-quality reproduction so that illegal copies were of equal standard to the original (May, 2007). Concomitantly, the intangible nature of digital music has resulted in new consumption practices. Efforts to counter digital piracy have primarily used legal mechanisms to dismantle POP networks and prosecute file sharers. More recent measures include educational and awareness campaigns. Nonetheless, the dismantling of Limier in 2010 marked the demise of POP networks and emergence of new sources of pirated content (BPI, 2010).With the piracy on the willingness to pay for music in a digital format and the willingness to subscribe to a streaming music service. This study conducts a detailed examination into the attitudes of consumers and social norms which influence intentions to purchase digital music or to download it for free.

It examines perceptions towards the pricing of digital music, the extent to which consumers are willing to pay for a subscription streaming service, and whether legal repercussions have served to encourage consumption.Previous research has sought to establish a direct link between POP network usage and demand for CDC. This study employs a broader definition of illegal downloading to include new forms of copyright infringement. Secondly, it analyses attitudes and norms towards copyright Infringement, to establish the underlying determinants for intentions to download music illegally. Finally, it considers the relationship between consumers’ treatment of music as a cultural object and digital technologies.Whilst the Internet is often cited as an example of a genuine gift economy, the “inescapable dynamic of tension” mains between abundance and scarcity in the market place (Ansell, 1999, p. 155).

A political economic framework is used to understand attempts to recommended a good in the digital environment through expanded notions of copyright and digital rights management technologies. The implications for the consumer relative to the position of power of the record labels are also discussed. The study aims to contribute to the understanding of the existence of a social norm of copyright Infringement amongst the youngest consumers.It aims to establish why consumers Mould be willing to pay for digital music, and in doing so, provide insight into the sustainability of a subscription-revenue business model. In the shift to the digital age, one without physical artifacts, the analysis of consumption will become a strategic resource for those operating in the cultural industries (Molten & Ordain, 2003). Although the focus of analysis is on the music business, insights may be applied to other cultural industries that have experienced a transition to the digital environment (Molten’ et al. 2003).

.4- MASC. Dissertation Theodore Gillette LITERATURE REVIEW File Sharing and Music Sales Firms operating in the music industry employ an unusual business model. The product supplied to the market is unique in that it is a purely symbolic good (Scott, 1999). Record companies aim to recoup investments in less profitable ventures by maximizing the return on an extraordinarily successful release. The inherently volatile and unpredictable nature of the industry renders it prone to concentration so that relatively smaller firms remain marginal (Betting, 1996).Through repeated consolidation, the business has grown to become a global industry dominated by a small number of large corporations and with a number of small racket is characterized by the ‘big four’ record labels of Universal Music Group, Manner Music Group, MI, and Sony Music Entertainment.

Owing to uncertain market conditions and a bungled private equity buyout, the landscape is prone to change as Citreous has recently put MI up for sale (Sweeney, 2011). Digital technologies were at first beneficial. The invention of the CD created a boom as music collections were modernized from vinyl records (Bam, 2011).The most recent significant development was the creation of the MPH digital audio encoding format by the Motion Picture Experts Group (MPEG) in 1993. By compressing data so that files are small and easily transferred, MPH technology altered the way music is distributed and consumed. Although the industry has a history of change associated with the introduction of new formats, the MPH was exceptional. Through POP networks such as Anapest, individuals could download files directly from each other’s computer, thus making the “core scarce good of recorded music infinitely replicable” (Bam, 2010, p.

77). Digital media consequently transformed not only the cultural object, but also empowered the consumer relative to the music industry (Poster, 2010). Streaming technology constitutes the latest development in the distribution of music. The technology uses buffered play, rather than downloading an MPH direct to the computer’s hard drive (Fox, 2005). Therefore, the consumer is able to listen to music, but does not retain possession of it. Although still in development, cloud-based music services are digital lockers that store content for individuals to access from any device.The impact of these services for rights holders and consumers remains to be seen.

Illegal file sharing is often cited as the cause of decline in the industry rotational revenues sourced from CD sales. It is difficult to prove direct causation between the two; however, a number of studies have made forays into the phenomenon. Huh and Pang (2003) conducted one of the earliest econometric studies into the relationship between piracy and demand for music. Their examination of sales data over the 1994-1998 period showed that demand for CDC decreased with piracy.The study contributes to the understanding of the trade-off between positive demand-side externalities and the negative effects of piracy, but is of limited use today since it does not address digital piracy. Lessee (2004) provided an alternative explanation, arguing that sales decline is partly attributable to the overall number of CDC released. It is correct that a decline in the number of albums released has occurred.

However, Lessee fails to fully consider that the decline is explained by lower demand for the good and subsequent lower revenue available for investment in future releases (Liability, 2005).Other than this oversight, Lessee (2004) contributes a valuable framework for the analysis of different segments of POP network users. Firstly, a minority use file sharing as a convenient way to exchange legitimate content. Secondly, the network also provides a means to acquire copyrighted material that would otherwise not have been purchased and would not have gained any recognition. Thirdly, Lessee (2004) outlined purchasing music for files acquired over POP networks or downloading in general. In practice, it is likely that first group is extremely small given that almost all content shared on POP networks is pirated.The second group has the potential to spread the reputation of an unknown artist, but would nevertheless infringe copyright law.

The third group is one of the most controversial and is often cited as a benefit of POP networks. Indeed, sampling constituted Anapest’s (unsuccessful) defense under the principle of fair use against A Records Inc. (Landau, 2002). On one hand, file sharing has the potential to increase the aggregate quantity of music purchased. Ritz and Wallflower (2006) put forward the most convincing argument in favor of sampling.By matching buyers’ preferences with products, POP networks result in purchases that compensate for any negative effects of copyright infringement. One question the authors fail to address is whether this result holds true for all record labels, regardless of size.

It is more likely that sampling would only benefit small Independent labels whose artists have little previous name recognition. An article by Blackburn (2004) concluded that file sharing reduces sales for well-known artists relative to unknown artists.From the perspective of the largest labels, sampling constitutes a weak argument in favor of POP networks due to the sheer quantity and scope of copyright infringement committed. Indeed, Monitor-Pone and Quadrant- Garcia (2006) found no evidence of a positive effect of piracy on demand for music. Ere final group is the focus of analysis for this study because their behavior has the greatest impact on sales of digital music. Many scholars have reached the conclusion that copyright infringement has had a negative effect on the purchase of music (Rob Wallflower, 2006; Center, 2006; Liability, 2008; Wallflower; 2009).In contrast, a study put forward by Borehole-Gee and Strumpet (2007) is most widely cited for reaching the opposite verdict.

Despite its merits however, the study suffers from a number of flaws that raise questions about the conclusions made. Specifically, Liability (2007) made a powerful critique of Borehole-Gee and Strumpet (2007) analysis, highlighting a number of serious inconsistencies in the methodology and representation of findings. The majority of overall research has sought to establish a relationship between piracy and demand for music in a physical format.To date, Analogue (2009) conducted one of the few studies on the relationship between digital piracy on the demand for digital music. POP file sharing networks are no long as popular as they once were. Recent evidence points to file hosting websites as an increasingly popular source of digital music and other pirated content. Thus, this study employs a more comprehensive definition of illegal downloading in an attempt to contribute to the understanding of the relationship between digital piracy and emend for digital music.

Copyright in the Digital Age Copyright protection is highly important to the music industry and to the creative industries as a whole. An understanding of the basic workings of copyright is necessary to comprehend the Impact of illegal downloading on the record label and the expansion of intellectual over original forms of intellectual production or “intangibles” and gives the holder the right to exploit the work through licensing its copying in return for compensation Jar, 2005). The mechanism allows the record label to produce an artist’s work and ell it for a profit.The MPH can be taken as an “inherently political” technology through the embodiment of power in copyrights, as the format is objectified as an article of intellectual property (Sterne, 2006, p. 830). The rise in popularity of POP networks meant that copyright infringement occurred on a massive scale through unauthorized copying and distribution of the work (Yard, 2005). Digital piracy poses a serious challenge to the industry business model that fundamentally depends on a cycle of per-unit pricing and copyright law enforcement (Lesson, Webb, French, rift, & crew, 2005).

Record labels and stakeholders have collectively pursued a variety of protective, educational, and repressive measures in an effort to stem the flow of digital piracy smarter, 2011 a). In the United States, the music industry is represented by powerful actors such as the Recording Industry Association of America (ARIA) which sued Anapest in 1999 for copyright infringement. Litigation has also been brought against individual users of file sharing networks, resulting sometimes in excessive penalties due to the nature of copyright law (Barker, 2005). These measures in tandem have curbed digital piracy to a degree.A study by Patriarchates, Lowercase, Copal, & Marksmen (2006) found that legal threats from the ARIA discouraged participation in file-sharing networks, but that prevalence of music files on these networks largely remain. More recently, the 2010 Digital Economy Act effectively mandates I-J Internet Service Providers to take a greater role in tackling copyright infringement (Smarter & Eng, 2011). Developments in intellectual property rights have taken place over time, but could also be considered a reactionary measure by the creative industries in response to the threat posed by piracy.

Under pressure from the recording industry, Congress passed The Copyright Term Extension Act (known as the Sonny Bono Term Extension Act) in 1998, which extended copyright protection for an extra 20 years (McClure & Burbank, 2003). On a global scale, the US government has worked to extend copyright interests. For instance, the 1994 TRIPS Agreement obliges WTFO members to abide by a set of intellectual property standards giving maximum protection to rights holders (Yard, 2005). The Digital Millennium Copyright Act (TDMA) implemented in 1998 is the most Ninety disputed of such legislation.Controversy surrounds the act’s curtailment of the fair use’ provisions of the 1976 Federal Copyright Act. Through the prohibition of circumvention, the DACCA affects the very use of technologies (Gillespie, 2004). By shifting the focus of regulation from “use of the work” to regulating “access”, the act constitutes a “broad overreach that severely limits fair use rights” (Boucher, 2002, p.

36). Nonetheless, the practice of rights management is not entirely unforeseen. For technology to consumer CD and DATA recorders which prevented second-generation digital copies (McClure, 2003).Rights management practices have also been applied to the distribution of digital music. Formed in 1998, the Secure Digital Music Initiative SIDES) attempted to implement digital rights management technologies such as Intermarrying to bring a secure standard to music distribution on the Internet (Sylvan, 2000). More widely recognized, the tunes music store (launched 2003) used a proprietary digital rights management (DRUM) system ‘Fairly to encrypt music files, until the format was exchanged in favor the MPH in 2009 (George Chanced, 2006).Now that music streaming services have been widely adopted, new questions are raised about technical and legal constraints placed on the consumers.

In many ways, the expanded notion of copyrights has lost sight of its original purpose. Rather than providing artists with incentives to create, its primary purpose is to generate revenue for the record label (Dollars, 2000). It remains to be seen Nether consumers perceive this negatively and whether it ultimately affects intentions to purchase digital music. Piracy is as much a function of the boundaries of the law, as it is of the actual behavior committed.Overvaluation which has occurred effectively incriminates a large part of the population (Lessee, 2004). Underlying the industry response to piracy was an implied right to re-assert commercial copyright in a set of relations that were deregulated (Reek, 2005). As such, the music industry could be perceived as attempting to appropriate the digital economy by “reintroducing communication” (Terracotta, 2000, p.

35). Digital Piracy: Attitudes and Norms As a relatively recent development, only a small body of research exists on the behavior of individuals who pirate digital content.Kong, You, Lee, Sin, & TTS (2003) examined consumers’ intentions to purchase pirated CDC. Their Nor demonstrated that the social cost of piracy, anti-big business attitude, and the Individual’s ethical framework played key roles. Contemporary explanations of the actors that underpin intentions to illegally download borrow from earlier studies on software and digital piracy. Digital audio and software are similar products since both possess some of the same characteristics as a public good, such as non- calculability and non-rivalry (Sundials & Martin-Barbers, 2007).Copal, Sanders, Patriarchates, Augural, and Wagner (2004) constructed a model based upon ethical determinants of software piracy, with an emphasis on deontological and consequential influences.

Has and Shies (2008) take a different approach altogether. Rather than focusing on intentions to pirate content, they measured whether attitudes towards intellectual property and perceived risk are drivers of a consumer’s Unwillingness to pay (WET) for innovated software. Importantly, the results show that social norms had strong positive influences on WET, whereas prosecution risk did not Issue & Shies, 2007).Furthermore Aching and Sane (2009) find that income, risk perception, and ethics influence WET for digital music. According to attitude functional theory, people hold motivations that serve to fulfill utilitarian, value- McClure, and Spooky (2008) utilize the theory to assess motivations behind unloading behavior amongst college students. The majority of research however has applied the theory of planned behavior to examine intentions to download music illegally. Corona and AAA-Raffle (2008) showed that attitudes towards intellectual property, perceived risk, and previous behavior, influence intention to pirate digital content.

Wang, Chem., Yang, and Afar (2009) combine the theory of planned behavior Ninth social identity theory. The results suggest that intentions to download pirated music do not have a significant impact on the intention to purchase music in a physical format. Furthermore, the study highlights the significance of idolatry as a moderating influence. Wang & McClure (2010) employ a combination of three theories to provide a more detailed understanding of the attitudinal and normative factors of individuals who download pirated movies and software.The study finds that both multiple motivations and normative considerations are influences, in contrast to previous research that focused solely on utilitarian motivations. Finally, lamellar & Hellebore (2010) find that the subjective probability of legal threats and morality were significant determinants of illegal downloading.

Comparatively little is understood about the role of subjective norms on intentions to pirate digital content and willingness to pay for non-pirated music.File sharing is widespread with a significant proportion of Americans having used the technology (Lessee, 2004). An argument can be made that individuals do not perceive the act to be illegal because norm has emerged through repeated practice across the population, such as with cannabis use (Reek, 2005). In this way, individuals may recognize illegal file sharing as a theft but would not consider it a crime (Belletrist, 2008). Some ‘pirates’ even attain cult status, such as members of the Pirate Bay website which provides links to torrent files.Sift Giving and Consumption Practices Ere aforementioned has focused predominately on the behavior of individuals who download pirated content. Studies that focus on intentions to upload material should also be considered.

Becker and Clement (2006) focus on the motivations of users who upload copyrighted material and suggest that the act of gift giving could stem from altruism, reciprocity, or an obligation to the network itself. POP networks function on he basis that individual users share their music collection.Building on classical theories of gift giving, Giggler (2006) claimed that Anapest contained key characteristics of a gift giving system, including social distinctions, norms of reciprocity, and rituals and symbolisms. Most recently, Bam (2011) recanted file sharing from an illegal practice to one embedded in participatory culture, and in doing so, undermined the traditional distinction between the producer and the audience. Although the theory of gift giving provides insight into marketed exchange, the theory is limited in certain respects.The interconnectedness of POP networks is perhaps not as extensive as previously thought. A large proportion of users free ride’ off of the files provided by a relatively small number of individuals.

Furthermore, the explanatory power of participatory culture is challenged as piracy on the Internet shifts away from POP networks to De- personalized means of sharing. The gift system contributes an important concept to investigation of the consumption of digital music, whether through streaming services or downloading.The notion of the Internet as an example of gift system is paramount (Ignite, Hanging, Penmen, & Chant, 2009). For example, the open source software movement is regarded as an example of a genuine culture of gift giving and as a counter to the hegemonic forces of production. Ansell (2004) rightfully cautions that further research is needed into the structure of power that underlies the movement, such as its elitist creators for instance. Indeed, neither open source nor Creative Commons licenses operate outside of the mechanisms of traditional copyright (Smarter, 2011).With the concept of the gift economy, this study will Investigate the notion of intangibles as free and the notion of the Internet as free Feldman & Needle, 2006).

Lesson et al. (2005) argues that the crisis facing the industry is the result of the emergence of a “quasi-gift economy of music” since the mid-sass and broader cultural forces that have affected the role of music within society. Consumers arguably do not attach the same value to digital music as they do to the physical product (Steven, 2010). A small body of work focuses on the effects of the digitization of music on consumption practices.McClure (2005) argues that ownership of intangible music is intensified through desires for compacting, immediacy, and customization. Despite being intangible pieces of software, Sterne 2006) believes that individuals treat Amps as cultural artifacts. This has lead some to argue that new pleasures emerge in obtaining access and consolidating a database of music files (Burbank, 2008).

Recent research finds that young people may derive satisfaction from the process of accessing and organizing a large music collection Skibob, 2009).Finally, descriptive norms on POP networks can explain excessive consumption behaviors that result in the hoarding of pirated music (Largos and Kim, 2007). Conceptual Framework and Research Objectives At an overarching level, this paper investigates the extent to which scarcity is reproduced in the distribution of digital music and the consequences for consumers. Ere political economy analysis situates the distribution and consumption of music Nothing the context of capitalism – 11 – petting, 1996).Political economic theory places an emphasis on power relations that label. Specifically, Lesson’s et al. (2005, p.

186) model of the ‘networked economy outlines the complex network of relationships between producers, distributors, and consumers and effectively demonstrates the power commanded by record impasses. The recent surge in popularity of music streaming services necessitates the need for inquiry into the technology, especially as it is taken to constitute the industry latest business model.Although not directly referring to the recording industry, Ansell (1999) pertinently wrote that the dialectical relationship between scarcity and abundance present in capitalism is manifesting in new ways with the centralization of the Internet. Music distributed online as a service rather than as a product, gives the intellectual property rights owner “distinct advantages” in imprison to the traditional relationship between buyer and seller (Burbank, 2008, p. 248). Despite frequent claims about the demonstrating power of the Internet, inequality remains in the digital environment.An integration of an analysis of the structures of power with concern for symbolic form, would revivalist the political economy approach and allow for a better understanding of the dynamics of digital music distribution and consumption (Ansell, 2004).

The theory of planned behavior has substantial explanatory power in the investigation of intentions to perform certain behaviors. Prior research has demonstrated that the theory can be systematically applied to studying the underlying attitudes and norms of individuals “ho engage in digital piracy.According Zen (1991), intentions to perform behaviors of different kinds can be predicted from attitudes, subjective norms, and perceived behavioral control. Attitudes are determined by the individual’s views towards an object, whilst social norms refer to perceived social pressures. This study will use the two concepts as an analytical framework for study of the consumption of digital music. The first theme to be investigated surrounds the consumption of digital music room legitimate paid and non-paid sources.The objective is to analyze the relationship between attitudes of the consumer and intentions to purchase digital music, or to use a legal outlet such as a streaming service.

Secondly, the paper seeks to determine whether consumers are willing to pay a subscription for a streaming service. Thirdly, this study seeks to establish the effectiveness of legal repercussions on willingness to pay in an attempt to analyze devices that have the potential to encourage consumption. .12- Ere second theme to be investigated pertains to norms and attitudes towards illegal unloading.

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