Stories and Articles

How the Internet has Forever Changed the Way You Listen to Music

Dr. Alex Koster


Before mankind had the means to record music, composers and musicians received profits from their intellectual property through concert sales or by just passing the hat.

As more people were able to pay for entertainment, enactment of copyright laws became necessary to pay royalties and protect intellectual property. U.S. copyright laws to protect infringements on performance music were first enacted in 1889 and expanded to mechanical recordings in 1909.

Nearly a century later, the emergence of the Internet kicked copyright laws to the curb as peer-to-peer file sharing companies such as Napster, BearShare, SteamCast and others gained a substantial following among the public. Since then, according to research conducted by SDSU management information systems professor, Dr. Alexis Koster, the profits realized by legitimate music content providers has seen sharp declines.

According to Koster's research, this partially due to the fact that even though there has been a substantial increase in legal music downloads and streaming music (where music is played over the Internet, but not downloaded), illegal piracy of music still remained on a worldwide basis.Even though peer-to-peer file sharing companies were ordered to cease offering free downloads by a U.S. Court of Appeals in 2001, the damage to music industry income was done. "A large part of Internet users still feel strongly that they are entitled to free access to music and other copyrighted works over the Internet," said Koster. "Between the years 2000 and 2010, the industry had seen a decline of 74 percent in sales of physical records, and digital sales have fallen short of compensating the industry for its losses of physical record sales."

Attempts in both the U.S. and Europe to bring a halt to the illegal internet file sharing have been largely unsuccessful. "The Stop OnLine Piracy Act (SOPA) and Protect IP Act (PIPA) bills, which were to be voted on by the U.S. House and Senate, had strong support of the industries providing content ‐ in particular, the music and movie industries ‐ but they were shelved under political pressure and for constitutional reasons as well," said Koster. Similarly, Koster pointed out, the Hadopi law which would disrupt the internet connections of illegal content downloaders in France was much weakened for the same reasons.

"As illegal downloading has lowered revenues from CD sales, performers have increased ticket prices, resulting in declining concert attendance and revenues."

Even concerts are also not immune from piracy, as Koster noted: "Concert ticket prices used to be kept relatively low by performers to increase attendance and, as a consequence, boost CD sales. As illegal downloading has lowered revenues from CD sales, performers have increased ticket prices, resulting in declining concert attendance and revenues."

But the news isn't all bad, said Koster. Though sales of CDs had decreased in the U.S. by a whopping 74 percent between 2001 and 2010, legal digital music sales have been increasing since 2008. Starting in 2011, sales figures overcame the decline of the previous past few years and have been increasing ever since the inception of paid Internet music providers such as iTunes.

Koster also found that music streaming has become even more popular than music downloading. "Customers of legal streaming sites are not required to pay, provided they are exposed to advertising before streaming their music," said Koster.

In conclusion, the professor noted that even though CD sales still experience steep declines, the music industry is continuing to find new ways to use the Internet to help them regain profitability through the use of concert webcasts, streaming advertising and the creation of new models for music distribution as technologies develop.