Social Science
This passage is adapted from "Music Piracy," which appeared on UKEssays.com, February 2009.
In the future, the only way musicians will make money is by playing live. New federal legislation says universities must agree to provide not just deterrents but also "alternatives" to peer-to-peer piracy, such as paying monthly subscription fees to the music industry for their students, on penalty of losing all financial aid.
When record companies appeared, the services they provided were necessary in order for people to listen to recorded music. Making and selling records was a major undertaking. At that time, making recorded music available to the masses required significant capital and investments, which in turn required a legal structure that would provide stable profits and return on the required investment. The music industry used to provide people with tools that were essential to listen to recorded music. The difference between that time and our day is that record companies now charge people for permission to use tools they already have that the record companies did not provide—that in fact people paid someone else for—1 yet the legal structure that developed during the time when those services were useful remains. The legal structure says if you don't pay, you are breaking the law.
"In our day, there is no need of publishers, distributors, and in most cases manufacturers. Modern technology allows people to burn CDs at home or publish their own records using the internet, distributing the material across the web digitally.
"The problem of piracy has been rising for the past ten years, and the numbers of "pirates" is growing day by day. The reason is simple: user-friendly peer-to-peer software takes only a couple of minutes to set up and another minute to become familiar with all the features. In another ten minutes it is possible to find your favorite artist and download your favorite album. It's so convenient that it is becoming only a question of conscience whether to become a pirate.2
It is becoming more and more difficult for the music industry to ignore the basic economics, technological progress, and the outdated legal structures of the industry such as unenforceable property rights (because it is impossible to sue everyone) and "zero" production costs (peer-to-peer and file sharing systems became way too popular). Music companies are still trying to charge for their music, but it's becoming more and more clear that as long as there is a free alternative (peer-to peer and other file sharing systems), the price of music and other media will have to fall.
Some artists have already started to accept the situation, and instead of fighting the "problems" have started to look for opportunities.3 Marginal production costs are zero, and with software applications, it doesn't cost anything to produce another digital copy that would be as good as the original; as soon as the first copy exists, anyone can create additional copies. Unless effective technical, legal or other artificial barriers to production can be created, simple economic theory dictates that zero marginal cost plus competition (the possibility that the consumer will create and spread another copy) results in a zero price, unless government creates artificial barriers to a free market.
In October 2007, Radiohead announced that their new album In Rainbows would be available to download free of charge. But the networks and file-sharing systems had grown even easier to use than what Radiohead was offering. Radiohead's only requirement was for downloaders to set up an account on their website, but according to the statistics, that turned out to be not "cheap" enough.
A new era is coming—the era of free music.4 Recorded music will become one of the marketing tools to get people to pay for live concerts, which will put emphasis on performance quality, resulting in cultural socialization and stronger musical communities. In countries like Brazil, people have already started to use the situation as an opportunity, doing huge amounts of remixes, resulting in new styles and music cultures like Techno Brega.
Record labels are going down, struggling to make profits from CD sales, and it appears that digital music selling is more reliable for revenue. Copyright and intellectual-property law have to be updated, and the CD-sales model has to be reinvented as the CD-promotional model5 in order to regain the value of a physical product with the emphasis now on live performances.