It's like when the CD made the cassette tape obsolete — only it might be an even bigger overthrow.
The rise of the digital music format, with single-song tracks that can be uploaded, downloaded, e-mailed, burned and shuffled from player to player is turning the music industry upside down. Compact disc sales experienced a 10 percent drop in 2006.1 Seventy percent of legal music downloads2 and almost a quarter of all music3 sold in the US are now purchased through the iTunes Web site.
If you've even been near a music-loving teenager lately, it won't surprise you to hear that Apple has the undisputed corner on the market for digital media players as well, with the iPod accounting for a whopping 51 percent of devices shipped in 2006 — compared to SanDisk, whose players came in second with just 10 percent of the market.4
A new development in the industry is the sale of tunes without protective code (called DRM) imbedded. In the past, iTunes' DRM has prevented its songs from being played on any non-Apple player, but now that Web site and others are beginning to sell DRM-free files. Competitors hope that the tactic will give them a market foothold.5
One of the ongoing controversies created by the advent of digital media is the question of how users get their music and video files. From the beginning, illegal file acquisition through peer-to-peer (or p2p) file-sharing services has been an enormous headache for the music industry. Obviously, they would prefer that consumers pay for their music.
The good news is that the development of easy-to-use legal download services has increased legal downloading. Estimates for 2007 show the number of legal downloaders surpassing the number of illegal downloaders for the first time.6
On the down side, it seems that those who download media illegally do so in high volumes. Five billion songs were illegally downloaded in 2006, as opposed to 5 million legal ones.7 Popular sites for illegal downloading are LimeWire.com, Kazaa.com and BitTorrent.com. All of those force users to sign an agreement not to violate copyright laws — which some users then ignore once they're logged in.
Parents of young downloaders would do well to talk with their children and teens about the ethics involved in acquiring media files. In addition, illegal downloaders now have more to worry about than a guilty conscience. The Recording Industry Association of America (RIAA) is cracking down on illegal file sharing. The RIAA has filed more than 26,000 lawsuits since 2003.8 While most are settled out of court for sums between $3,000 and $5,000,9 the first defendant to actually go to trial lost — badly — and was required to fork over $222,000. That was the penalty assessed on just 24 of the 1,702 songs the 30-year-old woman had illegally offered to share on Kazaa.com.10
The RIAA isn't just focusing on adults. The organization has also sued illegal file-sharers as young as 12 years old.11