According to new statistics from the International Federation of the Phonographic Industry (IFPI), approximately 95 percent of all music downloads on the Internet are currently illegal, in that they infringe on copyright and cut the flow of cash to companies and artists. As a result, revenues have dropped globally by some 7 percent last year alone. Peer-to-peer (P2P) site representatives say that trying to hold on to obsolete copyright laws in the modern setup of the Internet proves that the companies have no real understanding of how the system works.
"There is a momentous debate going on about the environment on which our business, and all the people working in it, depends. Governments are beginning to accept that, in the debate over 'free content' and engaging ISPs [Internet Service Providers] in protecting intellectual property rights, doing nothing is not an option if there is to be a future for commercial digital content," says IFPI chairman and chief executive, John Kennedy.
According to the estimates of the organization, some 40 billion music files were illegally shared in 2008, while only 1.4 billion were downloaded legally. They say that the digital music business has expanded last year by more than 25 percent, reaching an estimated value of around $3.7 billion. Because people share music illegally and don't pay for the albums and tracks they own, they cause massive dents in profits for companies, labels, and music artists, the IFPI, which represents 1,400 companies in 72 countries, says.
However, those who operate large P2P sites say that placing something online makes it free for all, and that, in digital times, posted materials are shared. They say that the copyright laws are obsolete, and that trying to stop downloads online is impossible, even if the ISPs were to collaborate with companies in pursuing those guilty of copyright infringements. The debate is similar to that between people advocating open-source software, and those claiming patents for their creations.
"This is an age of rampant sharing and remixing, and if you can make the connection between sharing and culture as Doctorow has, you will see this war between rightsholders and consumers will never end and the rightsholders will never win. The band Girl Talk and Lessig and James Boyle and Terry McBride of Nettwerk and isoHunt all echo a common point: Remixing and sharing is good for culture, suing consumers and technologists who enable sharing is destructive for everyone," says the administrator for IH, a major P2P tracker site.
"The Internet is a more efficient information machine than the printing press or VCR ever was, and also a whole different animal. It's time the content industries learn to put it to better use as well, by discarding past notions of how business is done based on an economy of scarcity," he concludes.
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