Are intellectual property rights the answer to combat piracy in the music industry

AUTHOR
S. R. Ponelis, J. J. Britz

ABSTRACT

Piracy in the music industry is a global phenomenon, a fact repeatedly bemoaned by major music companies. Piracy has always been a problem but the rise of new information and communication technologies (ICT) have made it a straightforward and relatively uncomplicated exercise to commit. This ability to unbundle content from conduit through digitisation has given rise to a new generation of information goods. These information goods have certain characteristics that distinguish it from other economic goods, in particular that the cost structure of information goods comprises a high fixed cost but low variable and marginal costs (Varian, 1998). In competitive markets prices are driven toward the marginal cost.

This atypical cost structure of information goods in competitive markets result in the price of information goods tending to zero. Since the price of a compact disc (CD) is frequently considered exorbitant relative to the perceived cost of producing one, many individuals may feel that this injustice inflicted by the manufacturers justify piracy (Bagchi, Kirs and Cerveny, 2006:73); piracy through file sharing and illegal downloads alone may have cut album sales by as much as a quarter in the past 5 years (Edgecliffe-Johnson, 2005). Major artists have little time for the music companies’ complaints about the impact of the Internet on their business models. According to Mariah Carey “if the labels would have been less greedy at the beginning, they would not be dealing with this now” (Edgecliffe-Johnson, 2005).

In order to counter this trend, the competitive value of the information goods must be protected so that the act of creation can be supported and stimulated through by means compensation for this creation. Such creations include music, novels, medicines, computer software (Prakash, 1999). These creations are referred to as intellectual property (IP), which is defined as a means of acquiring ownership over a particular resource that is intangible in nature. Protection of IP is done legally by means of intellectual property rights (IPR).

In an attempt to prevent piracy IPR in all information-intensive industries (particularly in the entertainment and related industries) have been increasingly tightened. It has been no different in the music industry. The music companies are incredibly powerful players and have, for example, together with other entertainment companies lobbied in the US for more stringent copyright protection with regard to digital media which has subsequently been introduced. These are referred to as digital rights management or sometimes digital restrictions management (DRM). However, the continuing fight against piracy (for example, the global Motion Picture Association of America or MPAA campaign championed by soccer player Pelé) is evidence that this remedy is not entirely effective. The piracy of music by consumers affects not only the music companies but also those responsible for creating the music, the musicians themselves. This gives rise to a question: why is piracy continuing in spite of stricter copyright laws and what are the alternative ways in which this trend be reversed?

Bagchi, Kirs and Cerveny (2006:75) found that “for piracy rates to decrease there must not only be a change in economic conditions, but also in societal structure and attitudes.” In order to answer the abovementioned the paper will examine societal attitudes; in particular the increasing emphasis on legislation and the loss of recognition and respect of the Other and the products of his/her mind will be the point of departure in this enquiry.

The paper will be structured in the following manner: first, a broad introduction to the problem will be discussed, namely how music companies have skewed the balance between the creators and consumers of music and as a result given rise to them being circumvented by means of ever-improving ICTs, to their own and the creators’ financial detriment. Second, the underlying ethical approaches of the stakeholders will be critically examined. Last, having critically examined the underlying ethical approaches giving rise to the situation potential means of resolving this standoff in a fair manner is discussed.

REFERENCES

Bagchi, K., Kirs, P. and Cerveny, R. 2006. Global Software Piracy: Can Economic Factors Alone Explain The Trend? Communications of the ACM, 49(6):70-75.

Edgecliffe-Johnson, A. 2005. The Eager Diva. Financial Times [online], December 17, 2005. Available WWW: http://www.mariahdaily.com/corantofiles/news-archive-12-2005.shtml (accessed August 18, 2006).

Prakash, S. 1999. Towards a synergy between biodiversity and intellectual property rights. Journal of World Intellectual Property, 2(5).

Varian, H. R. 1998. Markets for Information Goods [Online]. Available from: http://www.sims.berkeley.edu/~hal/Papers/japan/index.html (Accessed 25 October 2004).

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