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The Industries At Risk
Academic affiliation: Oklahoma State University
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Every year people are given more opportunities to access copyrighted material with the advanced features of today's technology. People do things everyday on their computer not knowing that what they are taking part in just might put many industries out of business. At the moment highly advanced technology has given consumers the opportunity to retrieve copyrighted material from the Internet at no charge to them. Due to this opportunity, consumers are not purchasing their entertainment materials and therefore have put a financial burden on many of our entertainment industries. Mike Godwin discusses what this is doing to our entertainment industries, along with different solutions that have been very controversial, in the article titled "Hollywood vs. the Internet." Technology today makes it convenient for even novice computer users to download and transfer media files, which may cause serious financial problems for many of the industries related to the entertainment business. Many entertainment industries are suffering financially due to the transfer of media files, and the suggested solutions are forcing other parts of the entertainment industry to suffer.
It is first important to understand where the true problem lies. File sharing programs such as Napster, Kazaa, and Morpheus allow people to connect to peer to peer file sharing networks to transfer media from computer to computer. Audio, video, software, and virtually any type of file can be shared on these networks. Generally speaking, these programs offer a search bar that allows the user to type in keywords searching for the specific song, movie, etc. that they are looking for. The network then searches the files of the other users on the network for what the consumer is looking for. Depending upon what people are searching for, hundreds, and even thousand of search results may show up, allowing plenty of opportunities to download what they are looking for. With less than 5 clicks from start to finish, even a young child can easily find what they are looking for. The ease of use these programs offer makes it convenient for users to download copyrighted material with a free conscience. Stealing a cd now does not require one to make their way into a store with security cameras, but only to click on files for download in the comfort of their own home. This added convenience only inflates the scale of the problem, and the entertainment industry suffers greatly because of it.
One main area of concern for the movie and studio industry is the use of digital television. Many viewers find a way to copy a broadcast of a television show or a movie, and then regenerate it onto their computer and share it with anybody who has access to the Internet. This possibility for copying of broadcasts is due to the unencryption of digital broadcasts, along with the high quality of digital TVs. Encryption is the altering of files using a code that is not identifiable to unauthorized viewers. Without this code users have found a way to copy a digital broadcast and distribute it around the world. Due to the simplicity of file-sharing, its more convenient to download a movie then to go out and buy it. Godwin comments: "Who is going to buy DVD's or tape's of TV shows or movies they can get for free online sharing through peer-to-peer file sharing?" (Godwin 174) People are more than likely going to be less willing to go out and pay money for something that can be received from a friend free of charge. Due to this the movie industry is most likely not going to sell as many older movies and reruns because people can simply get them at no cost whenever they like. After some time this might start to cause a larger effect and have a large economic impact on the movie industries. The movie industry is not the only industry struggling with file-sharing piracy of copyrighted material.
The industry that seems to be struggling the most is the music industry. There are many programs similar to Napster, which allow millions of people to download any song they wish at the click of a button. Godwin states "Music lovers have already gotten out of the habit of paying for records, which means an end to big profits and thus and end to big record companies" (Godwin 176). People, once again, are less likely to go out and buy the newest CD that just came out because it can easily be retrieved for free from the Internet. "Today's heavy downloader tends to be the same person the record industry has relied on in the past to be the heavy purchaser," says Jayne Charneski, vice president of Edison Media Research (Wade 1). This comment brings up the question: how is the music industry supposed to make money, if the people they used to count on to buy records, are now stealing them from the internet at no charge? Jared Wade proves statistically the effect that Internet piracy has had on the music industry, when he states "Since 2000, unit shipments of recorded music have fallen 31 percent and revenues are down by 22 percent from $6.2 billion in 2000 to $4.8 billion in 2003, according to the Recording Industry Association of America (RIAA), the trade group representing the U.S. recording industry" (Wade 1). With a revenue drop of 22 percent in just three years, many are concerned that it might just be a greater problem in the future, and if the piracy continues the music industry might not make enough money to even produce new records.
This problem does not just stop with the movie and music industries. It has begun to also affect video game makers such as Nintendo. Nintendo just recently discovered that a Hong Kong firm was selling certain devices that made it possible to copy games and upload them to the Internet for free downloading. These devices merely sold for what a Nintendo game costs and allowed people to bypass security features and remove the software. It then could simply be uploaded to the Internet for everyone to reach. Amanda Evensberg states "Rampant piracy in the region has prevented the world's major video game producers, such as Microsoft and Nintendo, from entering the market"
(Evensberg 1). Consumers in Hong Kong that purchased this device no longer contributed to the profit that Nintendo was making for the creation of these games. With the company making less profit, there would be less money to create new video games and Nintendo and Microsoft would be at risk of being eliminated from the market. With many industries such as the video game industry being put at risk of destruction due to Internet piracy, many industries have tried to come up with ways to stop piracy before it is to late.
Companies and legislatures have begun trying to come up with solutions to the file-sharing problem. Many of the solutions however, help some industries, yet may cause problems for other industries as well. "We simply cannot allow online piracy to continue destroying the livelihoods of artists, musicians, songwriters, retailers and everyone in the music industry," according to RIAA President Gary Sherman (qtd. in Wade 1). The music industry wants to do something before it gets so bad that it is not worth it for musicians and songwriters to produce new music, so they have proposed the Hollings Bill. This bill hopes to make it a crime to develop new technology that does not include a security standard to prevent this unlicensed replication. The security standard deals with the implication of a new watermark system. This watermark would not be known to the viewers, but would contain information that would let an entertainment system know whether the material should be copied. But would people be willing to buy this new technology? Godwin states "Why trade in last years feature-rich laptop for a new one that, while faster, has fewer capabilities?" (Godwin 178) People might just stick with their old computers longer, so that they can keep the features. People not purchasing new technology so that they can maintain certain abilities, might just hurt the technological industries. The technological industry can not survive if people are not buying the new computers that come out every year. If the Hollings Bill were to pass, people might be less willing to go out and buy a new computer since their old one has more features, and this would just shift the financial burden onto the technological industry. This Bill could help many industries out, however it might just help to put the technological industry out of business instead.
Due to the widespread use of these file-sharing companies, many of our entertainment industries have been put under a financial burden with the possible risk of destruction. Many of the entertainment industries have sought to find a reasonable solution against piracy, however even the solutions that have been suggested appear to only help to put other industries such as the technological industry out of business as well. A sensible solution must start at the source of the problem, there must be strict penalties set forth on the file-sharing program owners and operators and the convenience must be eliminated as well. At this moment it is simply more convenient to obtain copyrighted material from the Internet than purchasing it from a store. If it were not as convenient as purchasing it at a store and consumers were at risk of certain punishments, then people might simply take the easier route and return to paying for their entertainment content. If nothing is done soon to turn this around, then we are at risk of losing many of our forms of entertainment due to the ultimate destruction of the movie, music and video game industries.
Evansburg, Amanda, Mark Flore, Allison Fitzpatrick, Vanessa Watson,
and Brooke Welch. "Video Game Maker Wins Copyright Judgement."
Intellectual Property and Technology Law Journal 15 (2003): 19
Godwin, Mike. "Hollywood vs. the Internet." Speculations. Ed. Jason Landrum,
Matthew Sivils, and Constance Squires. Kendall/Hunt Publishing Company, 2003. 173-178.
Wade, Jared. "The Music Industries War On Piracy." Risk Management Feb. 2004: 10
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