Erose Sthapit: Exploring Copyright, Music Piracy and Cultural Industries

8/2/2019 Erose Sthapit: Exploring Copyright, Music Piracy and Cultural Industries

1/7

1

Exploring Copyright, Music Piracy and Cultural Industries

Erose Sthapit

[email protected]

Introduction

Current developments in the global economy have brought about the dominance of intellectual property (IP). IP

refers to creations of the mind: inventions, literary and artistic works, and symbols, names, images, and designs

used in commerce. Ownership of these creations is important because potential economic gain provides a power-

ful incentive to innovate. IP is divided into two categories: Industrial property, which includes inventions (patents),

trademarks, industrial designs, and geographic indications of source; and Copyright, which includes literary and

artistic works such as novels, poems and plays, films, musical works, artistic works such as drawings, paintings,

photographs and sculptures, and architectural designs (Marshall 2009; MIPI 2012; WIPO 2012; WTO 2012).

The economies of developed countries are mainly founded on their intellectual property. Intellectual property

rights (IPRs) continue to play a leading role in the wealth of nations and in the development of most countries and

regions of the world. Europe and North America have fully grasped the dynamics of intellectual property and are

driving developments in the global and international arena. These countries have also traced their economic suc-

cess to the conscious efforts of their governments in making intellectual property, including copyright based in-

dustries, the engine room of their economies. Other regions like Asia and Africa are responding in measured steps

that emphasize the role of intellectual property in the pursuit of national, regional and international initiative

(Adewopo 2005). On contrary, the violation of intellectual property rights (IPRs) has become a huge global prob-

lem in both developed and developing countries, for example, music piracy - a form of copyright infringement

which is a crime in many countries (Idris).

Music piracy has become one of the worst types of intellectual property crimes (IPCrimes 2009). It has disastrous

results for the growth of local cultural industries, creativity and economic development. It not only costs jobs but

also interrupts cultural diversity by discouraging a more diverse supply of local cultural production in international

markets (UNESCO 2003). It is said that the music industry has its strength rooted in the protection of primary

products and services through the laws of copyright and related rights (Idris). I believe that music, a cultural prod-uct, due to its non-physical form contributes to virtually negligible marginal cost of reproduction and their ability

to be digitally delivered. Rapid advance since internet connectivity and digital technologies have dramatically

increased online downloading and sharing of digital music, shifted the market landscape, and raised important

issues on intellectual property rights and loss of sales (Bhattacharjee et al 2006; Bhattacharjee et al 2009; Chircu &

Kauffman 2002; Clemons et al 2002). In addition, many music industrial reports state that such file availability and

consumer activity has been damaging for music industry investments as well as artist careers (Wang et al 2012).

The essay introduces readers with intellectual property (IP) and the issues of violation of intellectual property

rights (IPRs), particularly, music piracy. The discussion section contextualizes music piracy as a growing problem

and its impact on the local cultural industries. It also provides insights on economic and socio-cultural impact and


2/7

2

some of the recent legal practices and strategies undertaken to combat music piracy and the challenges faced by

todays global music industry in emerging counties. It concludes by emphasizing on legal procedures and

strengthened collaboration to combat music piracy, a cultural problem with economic impact.

Discussion

Historical and the present day problems faced by the global music industry

Since the advent of cassette tapes and home recording devices in 1970s, the music industry has con tinually tried

to control and legitimize the practices of music copying and distribution (OHara & Brown 2006). In

1976, Universal Studios and Walt Disney Productions sued the Sony Corporation for bringing about the home

recorder; however, 8 years later it was legal to record entertainment on a recorder. I believe that this shows a

continuing struggle over music piracy. Another example is Napster, the first peer-to-peer service (P2P) introduced

in 1999. It is said that about 87% of music that was traded on Napster was copyrighted. Since then P2P services

began to take over the music industry and were followed by other providers like Kazaa, Morpheus, and Bear

Share. In fact, as of 2002, P2P service had registered over 100 million users. Consequently, the US government

began crack down on these programs (Marshall 2009).

In todays world, the rise of high-speed, wireless networks and P2P file sharing (still used to this day) has changed

and challenged the global music market (Fessenden 2002; Toynbee 2001). The extraordinary demand for goods

and products has surpassed the abilities of the enforcement agencies to monitor and protect against counterfeit

products. Certain new technologies have allowed easier reproduction of IPR bearing products and goods and

facilitated the reproduction of products in nearly every field where there are eager customers or market demand

for the legitimate products. Music is easily reproduced and foisted onto the public, facilitated in large part by new

technologies (Idris). In my opinion, the music industry is heavily affected by the digital revolution and continues to

exclaim that downloading, file sharing and counterfeiting is crippling their markets, leading to reduced ticket, CD

and record sales.

Impact on local cultural industries

Cultural industries are those activities which deal primarily in goods whose primary economic value is derived

from their cultural value. I believe that it contains those activities, goods and services within the cultural sector

that carry cultural content and symbolic meaning (OConnor 2000). The cultural industries involve the creation

and production, distribution and consumption of cultural goods and services and include radio and television

broadcasting, film production, book and periodical publishing, and video and sound recording, as well as theatre

and musical performance etc. (OConnor 2000; Garnham 2005; Throsby 2001). It is governed by public policy func-

tion (Hartley 2005; Lash & Lury 2007; Yuko 2007).

From a local cultural industries perspective, countries where counterfeiting and piracy flourishes are said to losetheir creative assets and are culturally impoverished as a consequence. The results are disastrous. Credible evi-

dence on counterfeit and pirated goods manufacturing in a country and no focused government efforts to pre-
http://voices.yahoo.com/topic/1107/universal_studios.htmlhttp://voices.yahoo.com/topic/1107/universal_studios.html


3/7

3

vent such manufacturing has direct impact in a countrys reputation. It discourages manufacturers of legitimate

goods from establishing their facilities in those countries. It leads to loss of FDI as well as technology transfer and

foreign know-how. It impacts not only foreign manufacturers but a countrys local industry. Local creators, inven-

tors, and SMEs, which might have focused their efforts and resources on the same products, are discouraged by

illegal counterfeiting. It prevents the future growth and the very spirit and energy are at stake, which are an inte-

gral part of the creativity process towards a knowledge-based economy (Idris).

Economic impacts

According to CBS Interactive (2012) 31 countries have larger pirated music markets than commercial. Brazil, China,

India, Indonesia, Mexico, Pakistan, Paraguay, Russia, Spain, and Ukraine are the countries with unacceptable levels

of music piracy. In 2003, Pakistan (84% of music sold is pirated) produced more than 230 million copies of both

CDs and DVDs. Only 25 million copies of these products are sold within the country, while remaining 205 million

copies are sold in various places throughout the world.

According to IFPR (2012), in 1999, pirated music market totaled 1.9 billion units. CD piracy increased to 500 million

units, leaving music cassettes to account for 1.4 billion pirated units. CD recordable units had made a significant

impact. Shipments of recorded music in the US had fallen by 26% from 1.15 billion units in 1999 to 860 million

units in 2002 (Marshall 2009). In 2003, piracy caused an estimated 120,000 job losses in the United States and

100,000 in the European Union UNESCO (2003). On the other hand, international authorities seized a record 56

million fake units of music (OECD 2007). In my opinion, even though more actions are being taken to combat

piracy and many organizations work to protect cultural diversity, raise awareness and promote the importance of

respecting copyright, the higher number of seizures also reflects the growing scale of the problem.

I believe that the theft of music represents a loss to the record labels and artists that have worked to create a

product that satisfies consumers cultural needs and desires. It is said that when a pirate steals a creation and as

soon as it is released, the studios and record companies lose millions of dollars instantly (IPCrimes 2009). For

instance, due to music piracy, the global music industry had gone from $40 billion to $32 billion in a period of 2

years: 2000 to 2002 (Marshall 2009). Such culture of piracy is a growing global problem not only because the

record companies are suffering, but because the deadlock between the file sharers and the recording industry is

only one aspect of larger transformations, shifts which highlight the conflicting demands of civil society, where

information and ideas should be freely exchanged, and an information economy, where cultural goods play an

increasingly important role in the marketplace (Adewopo 2005).

Social impacts

Music piracy has become a popular outlet for people all over the world; however, it has a greater negative impact

on the users, the providers and the artists. I believe that the social consequences of counterfeiting and piracy

mostly affect the artists, creators, and entrepreneurs who compete directly against the illegal products. The prod-

ucts of local musicians, music groups, record companies, and distributors are pushed out of the market by the


4/7

4

counterfeit copies, which are sold at a lower price, with none of the artwork, lyrics, or printed material which ac-

company legitimate copies, and no guarantee as to quality. Consequently, local creativity and culture are throttled

by counterfeiting and piracy as inadequate respect for cultural works and heritage counters national efforts to

promote indigenous culture and identity (Idris).

Recent legal practices and strategies to combat music piracy

The international recording industry has recently engaged with MasterCard, Visa and the City of London Police to

extend co-operation in tackling illegal online services selling unlicensed music worldwide. Under the arrangement

IFPI can secure action by police against websites that infringe its members rights. Indust ry anti-piracy experts

have drawn up best practice procedures for MasterCard and Visa, to distribute both internally and to banks that

use their services, which help identify infringing websites and prevent them from being granted card payment

facilities. I believe that it is a good example of collaboration between government authorities and business sectors

to tackle the impact of music piracy (IFPI 2012).

Another example is the new Hadopi graduated response, a protocol or law, adopted in several countries, aimed at

reducing unlawful file sharing. After its implementation, there has been decline in P2P levels by 26 percent in

France. Around two million P2P users stooped the activity since warning notices were first sent out in 2010. In

the US, an ISP cooperation deal was signed in 2011 and a graduated response programme is being implemented

with most major ISPs for a copyright alert system. In New Zealand, a new graduated response law took effect in

late 2011, with early indications of impact. Similar approach in Italy and Belgium, it has led to decline in visits to

infringing sites by 70-80%. In Spain a new law came into force to allow the blocking of illegal websites (IFPI 2012).

Therefore, in my opinion such legal procedures are a positive step towards limiting the scope of music piracy.

Challenges

A recent report published by the Social Science Research Council states that media piracy is rampant in emerging

economies, like Brazil, India, Russia, South Africa, Mexico and Bolivia (Ludwig von Mises Institute 2012; Vargas

2012). The major findings of the report were (a) high prices for media goods, low incomes, and cheap digital tech-

nologies are the main ingredients of global media piracy. It is said that relative to local incomes in Brazil, Russia, or

South Africa, the retail price of a CD or DVD is five to ten times higher than in the US or Europe. Legal media mar-

kets are correspondingly tiny and underdeveloped; (b) the chief predictor of low prices in legal media markets is

the presence of strong domestic companies that compete for local audiences and consumers. In the developing

world, global music companies dominate the market, such conditions are largely absent; (c) antipiracy education

has failed and piracy is part of the daily media practices of large and growing population; (d) industry lobbies have

been successful at changing laws to criminalize these practices, but largely unsuccessful at getting governments to

apply them; (e) no systematic links between media piracy and organized crime or terrorism in any of the countries

examined. However, it states that commercial pirates and transnational smugglers face the same dilemma as the

legal industry: how to compete with free. Lastly, the report argues that efforts to enforce copyright law have large-

ly failed.
http://www.ssrc.org/http://www.mises.org/http://www.mises.org/http://www.ssrc.org/


5/7

5

Conclusion

Firstly, music piracy is a global problem and not just in the United States. I agree that high prices for media goods,

low incomes, and cheap digital technologies are the main ingredients of global music piracy. Particularly, in the

emerging countries, mass production of counterfeit products and lack of government intervention to address the

issue contribute to the growing problem. In todays world, a lot of people think its silly to pay for music, when it's

so easy to get it for free. I believe that the legal market is competing with a market that can provide their products

for free.

In my opinion, the music industry needs to embrace the price competition. I support the idea of making it socially

unacceptable through legal procedures, for instance, graduated response in order to influence the consumer

habits. However, it is not an easy task to control the internet. I believe that local government authorities and busi-

ness sectors need to work in close collaboration, particularly, in developing countries as well as international co-

operation and partnerships between countries, regions, associations and partnerships needs to be furtherstrengthened to tackle music piracy. Lastly, in my opinion, loss of sales and piracy led cultural destruction is only

one aspect of the problem, but the ways to bring about a change in the consumer behavior should be the focus.


6/7

6

References

Adewopo. A. (2005). Development of Intellectual Property Rights in Africa. Internet source:

www.atrip.org/

Consulted 2.4.2012

BBC. (2004). Pirate CD sales hit record. Internet source: http://news.bbc.co.uk/2/hi/technology/3916681.stm

Consulted 5.4.2012

Bhattacharjee, S., Gopal, R.D. Marsden, J.R. & Sankaranarayanan, R. (2009). Re-tuning the

music industry- Can they re-attain business resonance? Communications of the ACM 52(6), pp. 136-140

Bhattacharjee, S., Gopal, R.D., Lertwachara, K. & and Marsden, J.R. (2006).Whatever happened to payola? An em-

pirical analysis of online music sharing. Decision Support Systems 42(1), pp. 104-20

CBS Interactive. (2012). Top 10 countries for music piracy. Internet source: http://www.zdnet.com/blog/itfacts/top-

10-countries-for-music-piracy-brazil-china-india-indonesia-mexico-pakistan-paraguay-russia-spain-and-

ukraine/8613

Consulted 5.4.2012

Chircu, A.M. & Kauffman, R.J. (2002) Competitive strategy, economics and the Internet. Journal of Management

Information Systems 19(3), pp. 11-16

Clemons, E.K., Gu, B. & Lang, K.R. (2002). Newly vulnerable markets in an age of pure information products: An

analysis of online music and online news. Journal of Management Information Systems 19(3), pp. 1741

Fessenden, G. (2002). Peer-to-Peer Technology: Analysis of Contributory Infringement and Fair Use. Internet

source: www.idea.piercelaw.edu/articles/42/42_3/3.Fressenden.pdf

Consulted 2.4.2012

Garnham, N. (2005). From cultural to creative industries: An analysis of the implications of the creative industries

approach to arts and media policy making in the United Kingdom. International Journal of Cultural Policy 11(1),pp. 15-29

Hartley, J (ed.). (2005). Creative Industries. Blackwell Publishing, Oxford

Idris. K. Intellectual Property A Power Tool For Economic Growth. Internet source: http://www.wipo.int/about-

wipo/en/dgo/wipo_pub_888/index_wipo_pub_888.html

20.3.2012

IFPI. (2012). What is piracy? Internet source: http://www.ifpi.org/content/section_views/what_is_piracy.html

Consulted 28.3.2012

IPCrimes. (2009). Music and Movie Piracy. Internet source:

http://investigativeconsultants.com/ipcrimes/html/music-movies.html

Consulted 5.4.2012

Jingguo, W., Zhiyong, Y.W. & Bhattacharjee, S. (2012). Same Coin, Different Sides: Differential Impact of Social

Learning on Two Facets of Music Piracy. Internet source:

http://wweb.uta.edu/faculty/zyang/published%20articles/JMIS2012.pdf

6.4.2012

Lash, S.& Lury, C. (2007). Global Cultural Industry. Polite Press, Cambridge

Ludwig von Mises Institute. (2012). Media Piracy: better described as a global pricing problem. Internet source:

http://blog.mises.org/16042/media-piracy-better-described-as-a-global-pricing-problem/

Consulted 5.4.2012

Marshall, B. (2009). Music Piracy: The Struggle of the Recording Industry. Internet source:

http://voices.yahoo.com/music-piracy-struggle-recording-3691190.html

Consulted 5.4.2012
http://www.atrip.org/http://news.bbc.co.uk/2/hi/technology/3916681.stmhttp://www.zdnet.com/blog/itfacts/top-10-countries-for-music-piracy-brazil-china-india-indonesia-mexico-pakistan-paraguay-russia-spain-and-ukraine/8613http://www.zdnet.com/blog/itfacts/top-10-countries-for-music-piracy-brazil-china-india-indonesia-mexico-pakistan-paraguay-russia-spain-and-ukraine/8613http://www.zdnet.com/blog/itfacts/top-10-countries-for-music-piracy-brazil-china-india-indonesia-mexico-pakistan-paraguay-russia-spain-and-ukraine/8613http://www.idea.piercelaw.edu/articles/42/42_3/3.Fressenden.pdfhttp://www.wipo.int/about-wipo/en/dgo/wipo_pub_888/index_wipo_pub_888.htmlhttp://www.wipo.int/about-wipo/en/dgo/wipo_pub_888/index_wipo_pub_888.htmlhttp://www.ifpi.org/content/section_views/what_is_piracy.htmlhttp://investigativeconsultants.com/ipcrimes/html/music-movies.htmlhttp://wweb.uta.edu/faculty/zyang/published%20articles/JMIS2012.pdfhttp://mises.org/http://blog.mises.org/16042/media-piracy-better-described-as-a-global-pricing-problem/http://voices.yahoo.com/music-piracy-struggle-recording-3691190.htmlhttp://voices.yahoo.com/music-piracy-struggle-recording-3691190.htmlhttp://blog.mises.org/16042/media-piracy-better-described-as-a-global-pricing-problem/http://mises.org/http://wweb.uta.edu/faculty/zyang/published%20articles/JMIS2012.pdfhttp://investigativeconsultants.com/ipcrimes/html/music-movies.htmlhttp://www.ifpi.org/content/section_views/what_is_piracy.htmlhttp://www.wipo.int/about-wipo/en/dgo/wipo_pub_888/index_wipo_pub_888.htmlhttp://www.wipo.int/about-wipo/en/dgo/wipo_pub_888/index_wipo_pub_888.htmlhttp://www.idea.piercelaw.edu/articles/42/42_3/3.Fressenden.pdfhttp://www.zdnet.com/blog/itfacts/top-10-countries-for-music-piracy-brazil-china-india-indonesia-mexico-pakistan-paraguay-russia-spain-and-ukraine/8613http://www.zdnet.com/blog/itfacts/top-10-countries-for-music-piracy-brazil-china-india-indonesia-mexico-pakistan-paraguay-russia-spain-and-ukraine/8613http://www.zdnet.com/blog/itfacts/top-10-countries-for-music-piracy-brazil-china-india-indonesia-mexico-pakistan-paraguay-russia-spain-and-ukraine/8613http://news.bbc.co.uk/2/hi/technology/3916681.stmhttp://www.atrip.org/


7/7

7

MIPI. (2012). Music and copyright. Internet source:

http://www.mipi.com.au/About-Piracy/What-is-copyright/

Consulted 5.4.2012

Oberholzer-Gee, F. & Strumpf, K. (2007). The effect of file sharing on record sales: An empirical analysis. Journal of

Political Economy 115(6), pp. 1-42

OConnor, J. (2000). The definition of the cultural industries. The European Journal of Arts Education 2 (3), pp.15-

27

OECD. (2007). The economic impact of counterfeiting and piracy. Internet source:

http://www.oecd.org/dataoecd/13/12/38707619.pdf

Consulted 5.4.2012

OHara, K. & Brown, B. (2006). Consuming Music Together: social and collaborative aspect of music consumption

technologies. Internet source:

http://books.google.fi/books?id=32F6bwAqCIcC&pg=PA290&lpg=PA290&dq=sociocultural+aspects+of+music+

piracy&source

Consulted 5.4.2012

Throsby, D. (2002). The music industry in the new millennium: global and local perspectives. Internet source:

http://portal.unesco.org/culture/en/files/25428/11066604353The_Music_Industry_in_the_newMillenium.pdf/The+

Music+Industry+in+the+new+Millenium.pdf

Consulted 5.4.2012

Toynbee, J. (2001). Creating Problems: Social Authorship, Copyright and the Production of

Culture. Milton Keynes, UK: Pavis Centrex for Social and Cultural Research, Open University

UNESCO. (2003). Copyright, Piracy and Cultural Industries. Internet source:

http://www.acpcultures.eu/_upload/ocr_document/UNESCO-GDAC_CopyrightPiracy_article10.04.2006.pdf

Consulted 21.3.2012

Vargas, G. (2011). Media piracy in emerging economies. Internet source:

http://bibliotecadigital.fgv.br/dspace/handle/10438/8526

Consulted 21.3.2012

World Intellectual Property Organization (WIPO). (2012). What is Intellectual Property?. Internet source:

http://www.wipo.int/about-ip/en/

Consulted 19.3.2012

World Trade Organization. (2012). What are intellectual property rights? Internetsource:

http://www.wto.org/english/tratop_e/trips_e/intel1_e.htm

Consulted 19.3.2012

Yuko, A. (2007). The role of consumption and globalization in cultural industry: The case of flamenco. Geoforum

38(1), pp. 103-113
http://www.mipi.com.au/About-Piracy/What-is-copyright/http://www.oecd.org/dataoecd/13/12/38707619.pdfhttp://books.google.fi/books?id=32F6bwAqCIcC&pg=PA290&lpg=PA290&dq=sociocultural+aspects+of+music+piracy&source=bl&ots=GlZErL7EuF&sig=djESzHUKLe_AhMYNUbAIc6weUn8&hl=fi&sa=X&ei=72aAT5PyAqzP4QT_g-ycBw&ved=0CFEQ6AEwBQ#v=onepage&q&f=falsehttp://books.google.fi/books?id=32F6bwAqCIcC&pg=PA290&lpg=PA290&dq=sociocultural+aspects+of+music+piracy&source=bl&ots=GlZErL7EuF&sig=djESzHUKLe_AhMYNUbAIc6weUn8&hl=fi&sa=X&ei=72aAT5PyAqzP4QT_g-ycBw&ved=0CFEQ6AEwBQ#v=onepage&q&f=falsehttp://portal.unesco.org/culture/en/files/25428/11066604353The_Music_Industry_in_the_newMillenium.pdf/The+Music+Industry+in+the+new+Millenium.pdfhttp://portal.unesco.org/culture/en/files/25428/11066604353The_Music_Industry_in_the_newMillenium.pdf/The+Music+Industry+in+the+new+Millenium.pdfhttp://www.acpcultures.eu/_upload/ocr_document/UNESCO-GDAC_CopyrightPiracy_article10.04.2006.pdfhttp://bibliotecadigital.fgv.br/dspace/handle/10438/8526http://www.wipo.int/about-ip/en/http://www.wto.org/english/tratop_e/trips_e/intel1_e.htmhttp://www.wto.org/english/tratop_e/trips_e/intel1_e.htmhttp://www.wipo.int/about-ip/en/http://bibliotecadigital.fgv.br/dspace/handle/10438/8526http://www.acpcultures.eu/_upload/ocr_document/UNESCO-GDAC_CopyrightPiracy_article10.04.2006.pdfhttp://portal.unesco.org/culture/en/files/25428/11066604353The_Music_Industry_in_the_newMillenium.pdf/The+Music+Industry+in+the+new+Millenium.pdfhttp://portal.unesco.org/culture/en/files/25428/11066604353The_Music_Industry_in_the_newMillenium.pdf/The+Music+Industry+in+the+new+Millenium.pdfhttp://books.google.fi/books?id=32F6bwAqCIcC&pg=PA290&lpg=PA290&dq=sociocultural+aspects+of+music+piracy&source=bl&ots=GlZErL7EuF&sig=djESzHUKLe_AhMYNUbAIc6weUn8&hl=fi&sa=X&ei=72aAT5PyAqzP4QT_g-ycBw&ved=0CFEQ6AEwBQ#v=onepage&q&f=falsehttp://books.google.fi/books?id=32F6bwAqCIcC&pg=PA290&lpg=PA290&dq=sociocultural+aspects+of+music+piracy&source=bl&ots=GlZErL7EuF&sig=djESzHUKLe_AhMYNUbAIc6weUn8&hl=fi&sa=X&ei=72aAT5PyAqzP4QT_g-ycBw&ved=0CFEQ6AEwBQ#v=onepage&q&f=falsehttp://www.oecd.org/dataoecd/13/12/38707619.pdfhttp://www.mipi.com.au/About-Piracy/What-is-copyright/

Erose Sthapit: Exploring Copyright, Music Piracy and Cultural Industries

Documents

Transcript of Erose Sthapit: Exploring Copyright, Music Piracy and Cultural Industries