In this research paper, it will explain piracy, how it affects the economy, its social gains and losses, and the legal aspects of copyright materials. This paper is designed to show clarity, facts, and statistics to back up my findings. It will also present materials that were learned in class discussions, to help write this paper with a clear understanding of the web, as it relates to piracy. While others use the internet for social interaction and entertainment, many use the web site to download illegal materials.
This has become, over the years, a growing problem within the American economy. Some people believe that these websites should be shut down, while others find no fault in file sharing. Although websites allow users to download, it is illegal to steal someone else work that has been copyrighted. Artists and companies work hard at creating music and ideas; and for someone to come along and download their music and software, it takes away from their revenue.
Illegal downloading has been a major problem in the movie and music industries, infringing on copyrighted materials; because of this, web sites and their users have been sued and or shut down. “Piracy is a form of theft. Specifically, it refers to the unauthorized copying or use of intellectual property. Intellectual property is knowledge or expression that is owned by someone” (Torr, p. 4, 2005). Piracy has been a problem for the entertainment and software industries by violating copyright laws.
Copyrights protect an individual’s work from being copied, reproduced and/or performed, without their consent. A copyright gives an owner exclusive rights to their own materials. Internet piracy took off in 1999 when Napster was established. This on-line music service was created by college students that allowed other students to trade files and download music, from computer to computer. These students argued that Napster was not stealing, it was just a tool for sharing music.
They felt that Napster gave independent musicians exposure. The music ndustry disagreed with Napster and according to Hilary Rosen, then president of Recording Industry Association of Records (RIAA), felt that it was legally and morally wrong. In Dec 1999, several record labels filed lawsuits against Napster, shutting them down in July of 2001. Many other websites emerged to try to take Napster’s place, but was targeted by copyright infringement lawsuits. Kazaa was a file sharing service, located overseas, that began to grow. They were not bound by US laws. RIAA began threatening Kazaa users, in order to stop them from downloading.
The RIAA was able to file lawsuits because the court ruled that internet service providers (ISP’s) were legally obligated to reveal names of alleged file sharers, but in “December, 2003, the US Court of Appeals for the District of Columbia Circuit over turned the earlier rulings, stated that ISP’s are not legally obligated to reveal their customers identities” (Torr, p. 6, 2005). By this, it made it difficult for the music industry to target individual file sharers. “Copyright infringement and other forms of intellectual property have become a large and growing problem around the world. ” (DeVany & Walls, 2007).
According to the Motion Picture Association of America (MPAA), they estimate that motion picture industry losses, due to piracy, exceed $3 billion annually in worldwide revenue. A $3 billion revenue loss to an industry that only takes in less than $10 billion annually, is a serious loss” (MPAA, 2005). Motion pictures are expensive to produce but cost little to illegally reproduce. That’s why they are the target for piracy. Within days of a newly released movie, they are downloaded illegally over the internet and on soft ware. At some time, they are available before the movie is released to theaters.
The MPAA produced a study that captured the losses sustained from piracy to the US and was said to have estimated approximately $6. 076 billion. This reflects only the direct losses to the major motion picture studios and does not reflect on overall effect of motion picture piracy on the US economy. If the revenue from making motion pictures increase (by a decrease in piracy), movie companies will make more movies and invest in higher quality, in order to capture more profits. If piracy increase, the opposite affect will occur. Movie industries will be less equipped to make movies because of a loss in revenue.
In the United States, music industries reported that only 37% of music obtained by consumers in 2009 was paid for” (Siwek, 2006). Without being paid, producers are less likely to create new content. So, therefore, without the turn-a-round of investment and revenue, a new generation of talent, such as artists and inventors, entering the market place, will diminish. The law compensates an artist for every reproduction of their songs, including digital downloads; however, they do not receive anything for unauthorized downloads made through P2P (peer-to-peer) networks.
There are over 3 billion unauthorized downloads per month on all peer-to peer servers. Every time someone download a song without authorization, they loose the ability to support their family, the capital needed to re-invest in their business and the economic incentive to continue to create music. Therefore, artists must protect their work. Music industries earn from selling CD’s of the artist’s songs. Now sharing music has become, as simple as, copying and pasting files. People no longer buy CD’s, instead they download artists’ music and sell them without the artist permission.
There are still other people who understand the value of buying original CD’s. They are aware that this helps the music industry strive to continue to produce more work. These industries need to earn for them to exist. Artist need to earn as well, in order for them to focus on creating more music. The more people patronize or tolerate piracy, the more likely the music industry will fall. The movie industry is also affected by piracy all over the world. A large amount of funding goes to the artist, the special effects and the computer animation in a film.
The more demand for the movie, the higher the risk of it being copied. Pirated items are very cheap compared to the legit copies. For example, an original DVD movie cost around $20. 00 each, but pirated DVD cost around $5. 00 each or you may be able to get 3 for $10. 00. Original products are expensive to create, produce and distribute; and once they reach the consumers, more added cost has been placed on them, causing the final product to be expensive. Many consumers contribute to piracy because original products are often too high for them to purchase; therefore, they feel the need to copy or pay for cheaper goods.
Those who pirate may think that this is a good business for them because people would by cheap from them instead of paying twice as much for the legal one. Most people who are involved in piracy, do not realize that the industries they are pirating from, are losing revenue; then others are, but they continue to pirate. Companies not only lose revenue, but they have to pay directors, producers, artists, technical staff, advertising and many more behind the scene people, to produce their product.
These industries get their revenues from the sales of their products to cover the cost but if people continue to pirate their products, how can they pay the salaries for the production staff, or even get money to advertise their products. With lower to no money, these industries would have to cut cost by lowering the quality of their product. Fewer people would stop buying the product and this would cause the industries to start laying off employees. The true cost of motion picture piracy far exceeds the impact it has on producers and harms the U. S. economy as well as taxpayers.
Can you imagine how much revenue is lost? When money is not being made from these industries due to “bootlegging”, it impacts the artists, producers, companies and so on; causing a trickle effect. Piracy affects businesses and pulls them down like a domino effect. Downloading digital products for free may harm creators because consumers may no longer buy the version for sale. There are billions of dollars being lost to music and movie industries from piracy.
“The following is an estimated loss of these industries. Motion picture piracy now results in total lost output among U. S. ndustries 20. 5 billion annually. Motion picture piracy cost U. S. workers 5. 5 billion annually in lost earnings. Of this amount 1. 9 billion would have been earned by workers in motion picture while 3. 6 billion would have been earned from other industries. Motion picture piracy cost jobs. With no piracy, 141,030 new jobs would have been added to U. S. economy. Of this total, 46,597 jobs would have been created in motion picture industries while 94,433 jobs in other industries. Motion picture piracy cost governments at all levels 837 million in lost revenue” (Siwek, S. , p. 1, 2006).
Downloading copyrighted materials may be subject to severe penalties, such as impoundment of computer equipment, large fines, and orders to cease activities. When students are caught, they may be reported to the Office of Student Conduct and Conflict Resolution, for administrative discipline. The copyright holder may seek civil or criminal restitution. According to Justice. gov, copyright infringement penalties range from $100,000 to $250,000 in fines for each violation and up to 10 years in prison. The RIAA have been suing individuals who illegally download music, forcing them to pay a settlement for each individual song downloaded.
The MPAA has also sued individual downloaders, representing studios as Warner Bros, Walt Disney Company and Sony Pictures. Downloading copyrighted materials without permission is wrong. A lot of time and money is put into producing the materials, with the expectation that those that want to use it will pay for the privilege. Downloading unauthorized materials is like walking into a store, picking up a CD, and walking out, without paying for it. This is wrong and considered stealing; therefore, pirating other people material, without consent, is also stealing.
One has to look at how piracy affects the owner. Think about the revenue that is lost due to a decrease in original sales. When the producer loose sales, the money that is needed, is lost, resulting in no extra money to support their family and themself. When the owner lose money, they are unable to continue to make their products for consumers; which in the long run, damages their careers. There are two similar bills that were established in an effort to stop on-line trafficking in copyrighted intellectual property, The Stop Online Piracy Act (SOPA), and the Protect IP ACT (PIPA).
The SOPA and PIPA expand the ability of US law enforcement to prevent various entities from conducting business with websites engaged in trademark and copyright infringement by mandating that the entities block access to or cease business arrangements with such rogue websites (Yonder, C. 2012)”. For example, a web site called LimeWire, was a site that allowed users to download music for free. This web site was shut down several years ago because of its illegal downloading of music.
In December 2010, LimeWire was shut down after being defeated in a federal court case brought against it by the RIAA. The RIAA was awarded $1 billion in statutory damages for copyright infringement” (Anderson, 2010). Now, their site has a big warning message about illegal downloading and it stops any access to the site. It is not illegal or immoral to download copyrighted materials, as long as you have the consent of the author. A great deal of copyrighted material is placed on the internet with the permission of the author so that it can be viewed and downloaded for free. Some copyrighted material on the internet may be pirated or made available for download without the author’s consent and this can lead to legal liability.
Copyright exist to protect the intellectual work of the creator. Just because it is easy to pirate music, does not make it right. As long as the potential for profiting from illegal copies continues, piracy will continue to exist. Remember that if consumers do their part in purchasing products legally, the creator will be rewarded for their hard work and creativity. From the information given in this research, the question remains, should web sites be shut down for piracy? On the legal aspect, these web sites should protect the artist’s or producer’s work from being downloaded by their users, illegally.