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Nicole Paterson: s2744835
Info Tech Arts 1712QCM

Assignment One
Word Count: 987
Due Date: Tuesday 4 May, 2010
Abstract
This essay examines the impact that digital downloads may have on music piracy; a
global phenomenon against which online music stores attempt to diminish the effect
of by providing an online alternative for consumers. The essay examines empirical
and non-empirical data gathered from literary sources which suggest, theorise and
show evidence attesting to the fact that digital downloads do have a positive effect
on music piracy and do aid in the alleviation of piracy.
Introduction
“ (Piracy) can be alleviated through secure standards, legislation and education”
(Calvin et. al, 2001, 62).
The above statements serves as the crux of this discussion, in that music piracy is a
common and escalated problem which the music industry struggles to overcome
with the introduction of more ‘secure standards, legislation and education’ (Calvin
et. al., 2001, 62). The major step taken to alleviate piracy is with the initiation and
wide-spread marketing of digital downloads. The question posed in this paper – do
legal digital downloads have an impact on music piracy? - will be examined from the
perspectives of a number of reputable sources to discuss the effect one has on the
other whether it’s in a positive or negative manner.
Literature
There is much literature available on the subject of music piracy and many
conflicting yet justified perspectives on the specifics of music piracy, the cause and
effects, the resolution strategies associated and so on. (Although it should also be
said that information on whether legal downloads effect music piracy as opposed to
the other way around is a little more obscure).This is true for the question at hand;
the professional opinions on whether legal downloads help to alleviate the volume
of music piracy vary exponentially. For example, contrary to popular discourse, Hui
(2002)discusses the fact that recorded music industries claim excessive economic
loss, and makes the valid point that even if there was a prevention for piracy, ‘many
of those who used pirated products might not switch to buying the legitimate item’
(p2.). Alternatively there is a saturation of data and a strong mainstream belief that
shows that piracy increase and music sale decrease are directly correlating figures,
as purported in Peitz and Waelbroeck’s article (2004, p 16.). Both takes on the
subject are valid (to a degree) and deserve further investigation.
Argument
Music piracy – why it occurs and what the alternative is
To quote Chiou et. al. (2005), “piracy is the greatest threat facing the music industry
worldwide today” (p.161). The escalation of music piracy can be attested to many
reasons, one especially being the vast improvement and all-consumptive nature of
the internet. As Calvin et. al (2001) notes, the portability and quality of the current
internet, as well as the huge progression relevant to bandwidth restrictions, has
allowed music piracy levels to surge in an unprecedented manner (p.62). The clear
appeal in music piracy lies in the accessibility and cost free nature of illegal
downloading, as well as a reliance on the assumed anonymity that the internet
appears to promise the use. To curb the volume of pirating and to alleviate the
enormous economic loss to the music industry - Jones (2007) states that “global
music piracy robs the United States *alone+ of $12.5 billion in economic output” (p.1
) - retailers have had to create a mechanism that simulates the process for the
highest cost that consumers will be willing to pay.
The cause and effects of legal downloads
An obvious starting point for discussion is to examine the huge empire that is Apple
iTunes, who as a reference point were responsible for over a quarter US music sales
in 2009 (http://www.ipodnn.com, 2010, online). With the introduction of the iTunes
online music store, Apple has effectively presented consumers with an alternative to
piracy for a cheaper and far more immediate method of purchasing music rather
than the traditional way, thus perhaps enticing consumers who would normally
pirate music out of ‘laziness’ into purchasing music online instead. As with any new
spawn of technology, this monopoly on an original and quickly popular market has a
large pull of competitors attempting to match Apple’s weight in the industry, only
inflating the number of legal downloading options available to consumers who want
to access music quickly and with a clear conscience. It is fair to hypothesise then that
these legal downloads do have a positive impact on music piracy, in that when
presented with easy alternatives to pirating, there will be consumers who will
purchase music online instead, simply due to a legal option being available.
Benefits of legal downloads

Another argument to consider is the well-purported claim that online sharing
encourages consumers to purchase more music legally (Gopal et. al., 2004, p. 5),
revealing another positive effect low cost, legal downloads has on piracy. The
following quote is drawn from Bhattacharjee et. al.’ s discussion of whether legal
downloads actually do have a benefit over pirating:
“Contrary to conventional wisdom, lowering the cost to sample music will propel
more consumers to purchase music online, as the total cost of evaluation and
acquisition decreases.. Reducing the cost to sample may encourage some consumers
to pirate music; but is also enhances legitimate customer base by decreasing the
total cost of music acquisition” (2004, p.2).
As discussed briefly in an earlier paragraph, to look at the subject in pure economic

terms is to realise that as an increasing number of consumers are turning to the ease
and efficiency of purchasing music online, more traditional retailers are ‘recognising
the value of internet sales’ (Calvin et. al., 2001, n.p.). To explore this theory further,
as more consumers opt to download legal music, more and more influential
companies will recognise the need to forge their own online buying scheme in an
effort to retain their customer base and revenue. As this begins to occur more
frequently, the market competition gets stronger and forces prices down whilst the
music databases available to consumers will continue to expand – thus reducing the
need for piracy. This is another point to tally in argument for the use and benefits of
legal downloads.
Conclusion
As discussed throughout this essay, there is a clear positive impact that legal
downloads have on online music piracy. With the empirically proven increase in
online music sales, the need to download music illegally theoretically decreases. It is
clear that the ‘market’ for pirating lies in the zero cost factor and in the easy
accessibility meaning music can be listened to within seconds. However, with online
music stores expanding and increasing, the literature gathered for this essay
reiterates that the exponential options for obtaining music quickly and cheaply
(especially in comparison to music purchasing to last decade), and legally, has a
positive effect on music pirating.
Reference List
1. Bhattacharjee, S., Gopal, R., Sanders, L. (2004). Do artists benefit from

online music sharing? Journal of Business, Forthcoming(n.p). Abstract retrieved April
16, 2010, from Social Science Research Network database.
2. Calvin, K., Lam, M., Bernard, C., Tan, Y. (2001). The internet is changing the
music industry. Communications of the ACM,44(8), 62-68.
3. Chiou, J., Huang, C., Lee, H. (2005). The antecedents of music piracy
attitudes and intentions. Journal of Business Ethics, 57(2), 161.
4. Hui, L., Png, I. (2002). Piracy and the legitimate demand for recorded music .
National University of Singapore, School of Computing. Retrieved April 16, 2010 from
Social Science Research Network database.
5. iTunes takes over a quarter of 2009 US music sales? (2010). Retrieved April
16, 2010 from
http://www.ipodnn.com/articles/10/04/28/digital.grows.within.context.of.industry.
decline/.
6. Jones, K. (2007). Music piracy costs U.S. economy $12.5 billion, report reveal.
Retrieved April 16, 2010 from
http://www.informationweek.com/news/internet/showArticle.jhtml?articleID=2018
01704.
7. Pietz, M., Waelbroeck, P. (2004) The effect of internet piracy on CD sales:
Cross-sectional evidence. CESifo Working Paper Series, 1122(12), 16.

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Nicole Paterson: s2744835

Info Tech Arts 1712QCM

Benefits of legal downloads

As discussed briefly in an earlier paragraph, to look at the subject in pure economic

1. Bhattacharjee, S., Gopal, R., Sanders, L. (2004). Do artists benefit from

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