It all started in 2006, when the music industry took aim at a peer-to-peer (P2P) software developer known as LimeWire (Veiga, 2006). According to the record labels, LimeWire owed nearly $150,000 for each time a song was distributed illegally by a user of the software. As you may know, this amount could potentially become astronomical. After a three-year battle, no fines will be paid. Instead, as of October 26, 2010, LimeWire was shut down permanently (Stempel & Adegoke, 2010). Record companies still swear to the immeasurable amount of damage caused by the LimeWire service on its industry. Still, it is questionable as to whether LimeWire truly caused the amount of harm stated by the recording industry.
Some may argue that the drop in record sales of the past decade was the direct result of the emergence of P2P software, beginning with Napster in 1999 (Heater, 2010). This is main argument of International Federation of the Phonographic Industry (IFPI). According to the IFPI, global record sales slumped from a record $26.9 billion in 1999 to $17 billion in 2009 (Densley, 2010). Many may take a step back and wonder if this sales drop was truly because of the introduction of P2P software or because of the economic impact of the dot com bust and events following. It makes logical sense that consumers would spend less on their entertainment budgets if they had less money to spend due to job loss or other economic hardship. This seems to be the message coming from the Bureau of Labor Statistics’ data concerning entertainment spending as a percentage of the average U.S. family’s budget. In the years of 1996 to 1997, Americans spent 4.67% of their yearly budgets on entertainment (Bureau of Labor Statistics, 2006). Between 2002 and 2003, this dropped to 4.11% (Bureau of Labor Statistics, 2006). If millions of Americans made even this slight drop in their overall entertainment budgets, one could imagine how much of a drop that would make in the music industry.
Still, one cannot deny the odd correlation between the slowing fall of record sales in response to the closure or hindrance of some of the largest file sharing sites, starting with Kazaa, which was fined back in 2006 (Heater, 2010). According to news from earlier this year, music sales in the UK had their “lowest drop in five years,” only a 0.8% decline in 2009 (IPC Media, 2010). It is unclear if the drop is sales loss was directly or indirectly caused by Kazaa’s switch to legitimate music sales. In the same fashion, time will only tell if the fall of The Pirate Bay and LimeWire will reveal a further effect on record sales worldwide. It is doubtless that, until then, the debate over the ethical use of P2P technology rage on.
Bureau of Labor Statistics. (2006, August 2). 1996-97. Retrieved October 28, 2010, from United States Department of Labor
Bureau of Labor Statistics. (2006, August 2). 2002-03. Retrieved October 28, 2010, from United States Department of Labor
Densley, R. (2010, April 30). Music sales drop worldwide. Retrieved October 28, 2010, from NG Retail
Heater, B. (2010, October 27). LimeWire, Napster, The Pirate Bay: A Brief History of File Sharing. Retrieved October 28, 2010, from Gearlog
IPC Media. (2010, March 24). Music sales drop by lowest amount in five years . Retrieved October 28, 2010, from NME: First For Music News
Stempel, J., & Adegoke, Y. (2010). LimeWire music-sharing service shut down. Retrieved October 28, 2010, from Canoe Technology
Veiga, A. (2006). Music Industry Sues LimeWire. Retrieved October 28, 2010, from Breitbart