andy decker and the ethics of downloading music - case analysis

7/27/2019 Andy Decker and the Ethics of Downloading Music - CASE ANALYSIS

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Andy Decker and the Ethics ofDownloading Music from the Internet

Recording Industry Association of America (RIAA)


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Case Background

RIAA (Recording Industry Association of America) is a trade organization that embodies the

interests of the different U.S. recording companies.

Its members include EMI Group Bertelsmanns BMG unit, Sony Music Entertainment, AOL Time

Warners Warner Music Group, and Vivendis Universal Music Group.

The emergence of the internet as part of the technological advancement gave birth to modern

applications which included P2P File Sharing software.

2002, CD sales plummeted by 11% according to Nielsen Soundscan and on the same time, the

consumer electronics association believed that the sales of blank CDs would rise by more than

40%.

2003, the downloading of music from the internet became a prominent leisure activity. This was

commonly done by students in their dorm rooms and even made copies and shared

downloaded files with one another.

A survey by the Pew Internet and American Life Project showed that 60% of college students

uses had downloaded music files compared to 28% of the overall populations.


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Case Proper

TIME CONTEXT

On May 1999, a P2P file-sharing service named Napster allowed users to exchange music

for free and on December of the same year, Napster was accused of copyrightinfringement and encouraging of illegal copying and distribution of music. The Recording

Industry Association of America (RIAA) filed a lawsuit against the said P2P file-sharing

service.

Since the growth of P2P file-sharing services, recording companies suffered a massive

decline in worldwide CD sales. At the end of 2001, CD sales dropped by 5% and at the end

of 2002, there was an 11% decline in sales of CDs.

In 2003, a number of P2P file-sharing services announced upgrades to their software that

would make it more difficult to uncover the identities of its users.


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Case Proper

VIEWPOINT

According to the RIAA, there were an increasing and significant number of students using

the networks of the university to participate in online piracy of copyrighted materials.Because of that, the College administrators, including the General Counsel/Chief Legal

Officer, Director of Information Technology, and the Chief Financial Officer were asked

substantial support by the RIAA to help bring the piracy under control.

The RIAA, being the embodiment of different recording companies is also responsible in

the continuous effort of putting a profound value in the meaning of ethical music

downloading.


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Statement of the Objectives

MUST OBJECTIVES

To bring piracy under control

To educate online downloaders about how they could violate the Federal copyright law

by simply uploading and downloading copyrighted works To increase the sales of recording companies

WANT OBJECTIVES

To specify what practices are and are not acceptable on the schools network

To impose effective remedies against violators

To improve security in university networks by monitoring student compliance


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Statement of the Problem

CAUSE

EFFECT


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CAUSE

EFFECT


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CAUSE

EFFECT


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Environmental Scanning

A. INTERNAL ENVIRONMENT

AREA STRENGTHS WEAKNESSES

Marketing Product Legal music products

- there are still existing P2P file sharing servicesnowadays that the RIAA pursues to abolishbecause of their illegal distribution, copying orrecording of files.

Flexible payment options- online stores was able to develop ways in

providing different payment options for theircustomers in order to pave way for easy andconvenient transactions.

Place Options to buy online or from stores

- P2P-file sharing networks are only availableonline but businesses offering legal music can

be found in physical stores and online stores.

Price Expensive cost of CDs and

online copies- The costs of newly

released albums are veryexpensive whether customersbuy from music stores oronline.


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AREA STRENGTHS WEAKNESSES

Promotions Strong product advertisement

- Music that customers are looking for aremarketed or advertised in many different ways

such as television, radio, newsprints, magazines,posters and online advertisements.

- In the fight for the abolishment of illegalcopying, recording, or distributing ofcopyrighted music or files, recording companieshave the support of artists or celebrities who also

support the same advocacy.


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B. EXTERNAL ENVIRONMENT

AREA OPPORTUNITIES THREATS

Degree ofCompetition

Legality of transaction as theiradvantage

- The legality of their transactions can beused as their advantage to keep people fromillegally downloading files.

Advocacy to stop music piracy- Other than partnering with prominent

songwriters, singers, and musicians, the RIAA

has also sent letters to University Presidents tobuild a bridge between the understanding ofethical principles of downloading of musicand the students.

Limited support from thepublic to fight music

piracy- A national survey

conducted by Edison MediaResearch found that 74percent of teenagers (12 17years old) did not seeanything wrong with

downloading music for free.

High-costs of legal andclean file copies

- people view recordingcompanies as greedycharging $20 per CD when

the costs of duplication wereminimal.


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Clean files- Almost all of the legal online music services

dont have viruses, adware or spyware hiddenbehind the files they provide for their customersas compared to P2P-file sharing networks thathave less socially redeeming features.

- Its possible that young people were beingexposed to age-inappropriate materials.

P2P-file sharing networksexcuse

- A federal court judgeruled that the users, and notthe networks offering thesoftware, were responsible forcopyright infringement.

- Networks were able tostay in business and were ableto attract additional investorsand advertisers now that the

viability of their businessesmodels was more certain.

Continuous growthof p2p

- The continuous growth ofP2P-File sharing networksprovide alternatives forpeople who are looking for aneasy and free access to

music or any other kind offiles.


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C. GENERAL ENVIRONMENT


Politico-legal

- As stated by the courts of law, anyonewho digitally transfers files of copyright-

protected songs and keep them on thehard drives of their computers or laptopswere breaking the law.

- When the RIAA found out about the entirebusiness operation of Napster, it filed alawsuit against Napster on December1999. Napster was accused of illegaldistribution and copying of music.

- According to the Ninth U.S Circuit Court ofAppeals, Napster was fully well-aware oftheir users illegally traded music.


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- A group of P2P File-sharing servicesreceive their own lawsuits coming from agroup of recording and movie picturecompanies for financially benefiting from

the infringing of copyright works.

- A restraining order was issued to Madster,was also known as Aimster. Another P2PFile-sharing service established by JohnnyDeep. Due to the restraining order, itsoperations were forcefully shutdown onDecember 2002.

- A federal appeals court in Chicagoupheld an injunction that forced Aimsterto shut down.(July 2003)


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- To further combat music piracy, the RIAAsettled more than 900 subpoenas withuniversity administrators and Internetservice providers asking for the names andaddresses of people sharing music files.

The RIAA stated that they would filelawsuits against these individuals by theend of August.

- School administrators value theirstudentsright to privacy but they also felt obliges tofollow the Digital Millenium Copyright Act

(DMCA)

Economic - Recording Companiesexperienced an 11% declinein worldwide sales of CDs,Approximately 1.7 billionblanks CDs were sold in 2002,

up to 40% from 2001.(end of2002)


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Socio-Cultural

- Despite the culture of people when itcomes to their perception of music piracy,there are students who are willing enoughto pay for legal music. Based on the studyconducted by a Princeton University

student, 46% of the students whoparticipated in the survey said that theyrewill to buy a legal copy of online musicand only 27% said that they would not.

- There were less socially redeemingfeatures being catered by P2P File-sharing

services. An Ipsos-Reid survey clearlyshowed the negative impact of files beingexchanged online and the advertisingstrategies used by the P2P File-sharingservices on their primary users, teenagers.

- Most people did not seemusic piracy as an ethicalissue.


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Technological - Administrators of the different collegesand universities found the habitualdownloading of movies, games, andsongs would overload the computernetwork of the campus making it difficult

for the professors to make use of theinternet for teaching and researchingpurposes.

- Screening software thathinders pornographymaterials from regularwebsites did not work onfile-sharing programs.

- The flourishing of theinternet opened a door ofopportunities for newapplications to be madethat includes P2P File-sharing services.

- Technological advancesmade the downloading ofmusic from the internet aprominent leisure-timeactivity in 2003.


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- Because of the subsequenttechnologicaladvancements, atremendous amount ofinterest in the free

reproduction and distributionof music grew.

- Some university studentswould set up search engineson their campus computernetworks in order to keep

files such as photographs,term papers and MP3 musicfiles. Since these files arelocated in the campussnetwork, all of the studentswho study within the vicinityof the school can haveaccess to any files available

on the network.


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SWOT Analysis

SWOT MATRIX STRENGTHS WEAKNESSES

1. Legal products2. Strong product

advertisements

1. Expensive cost of CDs andonline copies

2. Public perceptions of theRIAA

OPPORTUNITIES1. Preference of the

majority2. Advocacy to stop music

piracy3. Clean files

S1, O1, O2: Educate the peopleabout the illegal transactions ofP2P file sharing services.

W1, O1, O3: Offer lower costs of

CDs and clean online copies.

THREATS1. Limited support from the

public to fight musicpiracy

2. Continuous growth ofP2P-File sharing networks

T1, T2, S2: Strengthen advocacy

about music piracy. Educateconsumers about the possibleviruses and malicious materialsthat could be harmful to peoplebetween 12 and 17 years old.

T1, W2: Fix their accountingerrors which will help them gainpublic support in order toregulate music piracy.


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Alternative Course of Action

Education about Music

Piracy

ACA 1: To stronglyeducate the people,especially the students ofdifferent colleges anduniversities regardingMusic piracy and howthey are violating theFederal copyright law by

simply uploading anddownloading infringingcopyrighted workswithout permission.

ADVANTAGE DISADVANTAGE

- It will teach the peopleabout the fundamentalpart of educating themabout ethics, personal

responsibility, and respectfor the rule of law.

- It will also make themunderstand that if theypirate copyrighted works,they are subject to legalliability.

- Education about musicpiracy could lead to apossible decline in thepercentage of peopleillegally sharing anddistributing music.

- It takes a lot of time andeffort for educationabout music piracy tocompletely spread.

- Theres no assurance thatpeople will abide to theadvocacy the companyis trying to send across.


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Alternative Course of Action

ACA 2: To change theirbusiness models that will

help them earn profitfrom digital music.

ADVANTAGE DISADVANTAGE

- It will allow them tocompete against otherP2P file-sharing servicesby providing a myriad of

legal digital music.

- It will give options to theconsumers that will resultto them convenience.

- Changing businessmodels and keepingpace with theadvancement of

technology will requirethem a huge amount ofinvestment


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Recommendation

RIAA should modify their promotion and change it that will help them gain morecustomers. For example, they could offer a bundled music with a lower price.

Offer lower prices that will not compromise their profit.

Ensure the accuracy and correctness of their accounting papers in order togain the trust of recording artist and the public.


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Detailed Plan of Action

ACTIVITY PEOPLE INVOLVED TIME

SCHEME

DESIRED RESULTS PRIORITY

Education ofpeopleespeciallystudents

- School administrators(General Counsel,Director ofInformation

Technology, Dean ofStudent Affairs)

- Hilary Rosen(Chairman and CEOof Recording IndustryAssociation of

America), Edward P.Murphy (Presidentand CEO of NationalMusic PublishersAssociation), and RickCarnes (President ofthe Songwriters Guildof America)

Q1Q2 - To see studentsencouraged to stopdownloading musicwithout permission

from the originalauthor or composer.

- To see colleges anduniversities applystricter rules when itcomes to the students

access to the internetand imposeappropriate warningsand penalties to thosewho violate the rule.

High


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Detailed Plan of Action

ACTIVITY PEOPLE INVOLVED TIME

SCHEME

DESIRED RESULTS PRIORITY

- To see more peopleinformed about whatmusic piracy is andwhat penalties can be

given upon themwhen its violated.

- Letters sent to differentcolleges anduniversities.

High

Modificationof businessmodel

CEO and the board Entire year - Additional option forcustomers to buymusic.

- Additionaldepartment that willhandle digital music

High

andy decker and the ethics of downloading music - case analysis

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