A Rant about the Music Industry

Well you can lie to me
And I imagine you do

David Byrne, "Lie to Me"

As I write this in March 2001, the Recording Industry Association of America is doing its best to shut down the music-swapping network Napster. Who's right here? On the one hand, everyone knows that swapping music hurts the music's creators. On the other, the RIAA is no angel. Let's take a more detailed look at arguments for and against each side.

Disclaimer: I'm not going to argue from an ivory tower, or even necessarily be completely accurate. I'll strive for being plausible.

The RIAA's Claims

Napster use hurts creators

Likely. It strains credulity to imagine that every Napster user will do the morally correct thing and buy the music he or she downloads.

On the other hand, the recording industry bears some blame in this. They haven't provided music in ways that their customers want. If you're only interested in one song, you're out of luck; you have to buy an entire CD's worth of other music along with it. If you want a mix of songs, you have to buy several different CDs and then compile the mix manually. People would be happy to have options when it comes buying music.

On the other other hand, it's possible that Napster helps creators to some extent. I'm reasoning by analogy from the few compilation CDs I have. Two in particular led to the eventual purchase of six more CDs. Similarly, Napster gives people the opportunity to quickly and inexpensively find new music, which might lead to new sales.

Napster use has hurt CD sales.

Perhaps. According to RIAA figures, CD sales grew last year, but not as much as in the past few years (0.4% vs. 10.9% and 12.5% in the previous two years).

However, further analysis of the statistics reveals some interesting points. In 1997, before Napster existed, CD sales actually declined. A bad year might simply be due to lackluster releases. It's too early to blame Napster for 2000's small growth; the year's releases just might not have been that good.

Another interesting thing to note is that CD prices, after holding steady from 1991 to 1996 at around $13, have risen steadily since. Revenue from an average CD is now $14.02, where as in 1996 it was $12.75. When you consider that manufacturing prices haven't risen much -- a blank CD costs less than 30 cents these days -- it does make one wonder where all that money is going.

Could it be that the growth of CD sales has slowed because people are tiring of paying inflated prices?

In the interest of completeness, it should be noted that sales of CD singles did experience a significant drop (38.8%). However, it should also be noted that sales of CD singles have been on the decline since 1997.

The monetary loss due to Napster use is $X billion.

Bogus. They can honestly say that Y number of people each downloaded Z copyrighted songs from Napster, but that does not necessarily equate to lost sales. A person could download a song, then buy a CD. Or a person could download a song which he had no intention of ever buying. How does either of these count as a lost sale?

Answer: they don't. It's just not a meaningful figure.

Napster's Claims

Sharing music is a fair use.

Highly suspect. This is a real stretch. It's generally understood that sharing means with a few people known to the purchaser. Making a hundred thousand perfect copies and handing them out on street corners isn't fair use. It's a tool to drive a business into the ground. Example: Microsoft giving away its Web browser in order to destroy its rival, Netscape.


It's pretty clear that neither side can claim the moral high ground in this struggle. Napster challenges an industry that does not appear to do much for its creators. On the other hand, Napster might generate even fewer sales for creators. It would be interesting to see statistics that compare sales generated through Napster to real-world numbers about sales lost to Napster. I suspect the music industry will come out the loser, but that is a guess.

The real challenge is to create a system that benefits creators, is easy to use, and doesn't suffer from price inflation. No one seems to have a clue about this. In the meantime, the technology wars continue. The irony is that in killing Napster, the RIAA might find it supplanted by decentralized swap networks, which are a much harder target. Kill those, and an even tougher target will appear, rather like a hydra. However, I suspect the RIAA will stop action against swap networks when they become more difficult to use than the average person is willing to tolerate. After all, the last thing the RIAA wants is to unintentionally create a hardened swap network that is easy to use and can withstand any challenge!

I will say this, though. The lawsuits, propaganda, and just plain disingenuousness from both sides have made me decide to give up buying recordings. It's a pity, since there is new music I want to hear, and artists I'd like to support. But I can't in good conscience give money to the RIAA, which considers me (and all consumers) guilty until proven innocent.

I don't download music, either.

I'll just have to wait until those Lenny Bruce recordings are available in an ethically neutral format.


RIAA figures computed from their 2000 Yearend Statistics. Note that the document is a PDF.

Last updated 15 March 2001
All contents ©2001-2002 Mark L. Irons

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