What is a file sharing?
Recent developments in information technologies have revolutionised the way we listen to music and share it with people around. The new cutting-edge technologies, such as file sharing, has weakened copyright protection, causing the increase of the amount of music shared on the Internet illegally violating copyrights. As a result, the copyright-related companies have lost customers and revenue. This situation has forced them to change their business models.
File sharing is the action of exchanging or providing an access to media using the Internet. There are two different methods of file sharing: through peer-to-peer systems and through a cloud service. The first peer-to-peer online service Napster has founded by Sean Parker and Shawn Fanning in 1999. By means of the free software provided by Napster, people could exchange music stored on computers. (Ente, 2000). Napster was the first company to discover the concept of digital distribution and digital market on the Internet. After the bankruptcy and resale Napster has become an online music store that give an access to music through subscription and pay-for-song basis.
Does the decrease in record labels income cause the reduction of new products in the market? …show more content…
Consequently, copyright-related companies lost customers and revenue (Liebowitz, 2008). However, this does not mean that there is less music produced for the market every year. According to Arias (2013) there have been an increase in the number of new albums since 1998 and the low effectiveness of the copyright protection has not caused the reduction of produced music. One reason is that the cost of production, distribution and promotion has decreased (Waldfogel, 2012). As a result, there is more low-quallity music in the market that cancels out the reduction in the amount of high-quallity