Peer 2 Peer File Sharing: A Victimless Crime?

The concept of ‘file sharing’ is not a new one. Our parents and their parents would swap vinyl LPs of their favourite bands. Indeed, I remember a time long ago when my friends and I would stay up late at the weekend to record the Radio One Essential Mix, trying desperately to not fall asleep before the first hour and that all important moment of swapping the tape over to record on the other side. C120 tapes were hot property in the 1990s, a fact that has become lost in the mists of time, like much of our childhood memories in the face of ever involving technological developments. However, over time, the innocence of that sharing of music has become big business and inevitably has fallen into the hands of less than scrupulous people. We recently reported on Omid 16B’s idea of changing the free promo service that currently blights music producers and record labels all over the world and I wanted to add a little more context.

The year is 1999 and a new file sharing service called Napster becomes popular. The basic premise of it and the services which followed, was to allow people to share files with each other over the internet. Initially, these were small files due to bandwidth speeds and other factors, but soon larger and larger files could be shared. Napster didn’t last that long though and was shut down in 2001 for copyright infringement. It later reopened as a pay site with little success. Following in the footsteps of Napster were companies such as Kazaa and Gnutella. Much like their predecessor, files were shared around the internet between users, but with the added bonus inclusion of games and movies. Where Napster and eDonkey were centralised systems, this second generation of systems employed a more remote ideology of connecting users across the planet, by hooking each user up directly with another person who had what they were looking for without the incumbency of a central hub. Eliminating the main vulnerability of sites like Napster revolutionised the file sharing industry and partly lead to the abuse we now see on a daily basis. A third generation of file sharing networks now exist which inhabit the far reaches of the world wide web – the so called Darknet. Here the user can have complete anonymity as well as independence from centralised servers and is typically a place where less socially accepted behaviours are allowed to continue unmonitored. Similar to peer to peer file sharing, torrents were a first generation model which really took off and are still used today. Essentially relying on a central set of servers called ‘Trackers’, users are directed to other users who have the material you are looking for. If the file is popular, additional users may be added to your data stream increasing the speed with which you can download. This has proven to be very popular to share software, movies and other larger data items that a simple file share would find hard going.

pirate bay

Several factors have contributed to the wide spread use of peer to peer file sharing, the most obvious being the increase in bandwidth for most major internet service providers (ISP), another which may in fact be because of the former, is the widespread digitisation of physical media and of course the increased capabilities of your personal computer or lap top. Public perception of file sharing is also an interesting area of debate. The idea of owning music has shifted over the last 15/20 years from a physical format towards what we see today – all music is digital and on an iPod or mp3 player. Less of us now fork out the money to buy CDs or vinyl, opting for the more financially sound route of online stores or illegal file shares. In fact, CBS poll in the US in 2004 found that nearly 70% of 18 to 29 year olds thought that peer to peer file sharing was acceptable. A later poll by Tiscali UK in 2009 found that 75% of the public were aware of what was legal and illegal in relation to file sharing, but there was a divide as to where they felt the legal burden fell. 49% of people believed peer to peer companies should be held responsible for illegal file sharing on their networks, while 18% viewed individual file sharers as the culprits. A further 18% either didn’t know or chose not to answer. A similar poll in Sweden enlisted the views of 18-20year olds who supported (38% adamantly agreed and 39% partly agreed) with the statement “I think it is OK to download files from the Net, even if it is illegal”. Thats a pretty damning indictment of modern society – we would rather have something for free, even if it is illegally sought.

The economic impact of file sharing has been difficult to estimate due to a number of variables like the drop in CD prices, consumer spending habits, economic depressions and independent music outlets closing. Also the scope and range of peer to peer services has changed over the years with the introduction of legislation and sabotage of these networks by hackers (anyone remember Limewire?). Certainly the advantages to using a nodal file sharing system lend themselves to it becoming a market leader. Flexibility, file storage and memory, fault tolerance, performance and costs are more efficiently dealt with in a peer to peer share scheme compared to a client/server situation which only has two members shouldering the load. Unfortunately, peer to peer file sharing has become a blight on many areas of the entertainment industry. In 2005, it is alleged Hollywood film companies lost an estimated 2.4 Billion dollars to internet piracy; that number might well be doubled claim some industry insiders as the original figures were based on one download = one lost sale. It is entirely possible that the illegal download occurred simply because the opportunity was there; the recipient might not have even wanted to buy the film in the first place. In 2010, TERA (based in France) conducted a study covering physical and digital piracy of movies, TV series, recorded music and software in Europe estimated a loss of 10 Billion Euro. This, they say, has lead to 185 thousand job losses in the creative industries and associated businesses. They also predicted by 2015 these losses to retail revenue would increase to 159 Billion Euro and result in 600,000 job redundancies.

Erik Petterson, Owner of Lowbit Records explains, “As a label owner, rampant piracy is a huge problem. With music transitioning from ownership to access models, sales are even more important today than they were a few years ago. Sales on sites like Beatport are still one of the key metrics by which artists and labels’ success and popularity are measured, so the decline in sales has a far deeper effect than just losing money, as it can also affect an artist’s bookings and other areas of their musical career. Sites and blogs that actually sell pirated music are a real concern, and to be honest they’re a slap in the face for labels and artists.”

Nick Thayer, an Australian breaks DJ/producer recently revealed just how little money is made from record sales these days. In a blog post he outlines his costs in time/money for each aspect of an EP (admittedly, in this instance it’s a 7 track collection with 3 additional remixes. A regular release would typically only have 4 to 6 tracks max). After breaking down the costs for the tracks/sample clearance/artwork/distribution/marketing he explains how much he pays to management etc leaving him with very little even after a tour. And in a heartfelt plea, asks that if we support the artists, we should buy the music. Nick has made a career from music for 10+ years, but can certainly understand his frustration when he finds numerous file sharing sites pushing his music for free, not to mention the music blogs with links to free music. It’s a big business and supply is fierce to meet the demand. An OfCom study (2013) states,

“Taken at face value, our findings indicate that digital music piracy does not displace legal music purchases in digital format. This means that although there is trespassing of private property rights (copyrights), there is unlikely to be much harm done on digital music revenues. This result, however, must be interpreted in the context of a still evolving music industry. It is in particular important to note that music consumption in physical format has until recently accounted for the lion’s share of total music revenues. If piracy leads to substantial sales displacement of music in physical format, then its effect on the overall music industry revenues may well still be negative.”

So who do we believe? The corporations who are apparently losing money hand over fist or the independent studies who admit to following the click streams of internet users and in particular their visits to legal and illegal music consumption websites. (Lets not dwell on the Orwinian overtones of big brother counting your mouse clicks here!) I guess one way of viewing any study in this field, is by saying maybe pirates like music more, maybe it’s not that they are cheap or subversive or dislike leaving their homes to actually buy physical music, but that they genuinely enjoy the music they download. I’m not saying thats the right way. Just a way. As you can see from the graph, we seem to be consuming more and more overall product despite the rhetoric.

games-music-dvdsSo how do we make our music more discoverable and encourage sales rather than illegal downloads? Leading the way in the fight against media piracy are some of the internet service providers like Virgin Media in the UK who use a software to monitor its customers internet use in an attempt to dissuade viewing unauthorised websites. They can of course only be a watchdog rather than actually affect consumption. They have gone on the ban use on some TV and movie streaming sites and large torrent sites, but new ones spring up in a matter of weeks. On a smaller scale, many record companies employ a third party company to monitor file sharing sites for their product issuing cease and desist orders. A new company called JAMM has now just started up offering a unique product which allows you to upload and display your music files in their full glory but when illegally obtained are rendered impossible to mix into or out of. Leon Sweet the founder explains…

“Music piracy is huge problem and it’s the producers and labels that get hit the hardest. One thing we’ll never be able stop is people ripping music from the internet. If you can hear it, you can rip it. We’ve come up with a brand new way to help combat music piracy for dance music. It’s not a complete solution to end music piracy but it’s a step in the right direction and with a vigilante approach we can make a change in how people think about how they obtain their music. We’re basically putting a spanner in the works with JAMMd tracks and we’re sending out a clear message to DJs that steal music. Support the creators of the music you choose to play in your DJ sets. They’re just as passionate about what they do as you are and without them you wouldn’t be doing what you’re doing. We don’t live in a vinyl only era anymore where you’d pay £6 upwards for a release, the cost of an MP3 or WAV is very low compared to vinyl. We’re saying it’s only 83p or one pound something to buy a track these days, so go and buy their tracks. I know of a lot of producers and record labels that have stopped making music because they simply can’t afford to; wants, needs, musts and all that. Just think about the talent and potential tracks we’re already missing out on. We have some really cool things lined up for JAMM. We’re almost ready to launch the service, although we do have a live website with lots of info on and right now we’re spreading the word.”

You can leave your name and email address on the JAMM site to keep up to date with all developments. There’s also a nifty Facebook page and Twitter feed (nudge nudge)

What has become most evident from researching this article, is how the consumption of music by the different generations has altered the playing field we are on now. In my day of buying vinyl, financial constraints kept me from spending a fortune all the time on music. We had to really, really like the wax to fork out 8, 10 even 20 pounds a time, but, it was music which stood the test of time in many cases. These days, music is a click of a mouse away and rightly or wrongly that has meant legitimate music services like Beatport, Juno, Traksource etc have to release an inordinate amount of music weekly. Record labels in a bid to respond to the changes in the business have had to lower the bar somewhat to be able to maintain output making the music less special in my opinion. Steve Parry, Co Owner of Selador Records and uber DJ agrees in part,

“The world of music piracy has changed a lot since the vinyl golden age. Music has become throwaway. It costs less to make. It sells for less and of course, its ridiculously easy to share files. Its infuriating on one hand, as its further lowering the value of the actual music, but on the other hand, music being passed around by people is also promoting the track as it gets to more and more peoples inboxes. Its certainly a double edged sword. We at Selador do have online piracy management system (we use You still have to fight your corner and at least try and make it a bit difficult for people to download your music illegally. Unfortunately nowadays there will be generations of people not understanding the importance of paying for music, which in the long term, may be seriously detrimental to the artists and labels which may in turn stop some making music. Do we educate people to explain the importance of paying for the art? Do you wait for the non copyable file to become standard (but would people embrace it?), or is making music now just a promotion tool for the dance music industry for the DJ and artists to earn performance fees? The answer – unfortunately I just don’t know… But to throw another point in…. people in the 70’s and 80’s used to say ‘Home taping is killing music’ but its still around now.. I’m sure it will still be here in 20 years… and I’m pretty damn sure it always will be.”

So what is the answer? Certainly the big record companies have sought to shut down these illegal file share companies by legal means. Indeed a few years back if you remember, was the Megaupload case where a number of criminal indictments and enforcement actions were taken against owner Kim Dotcom. Initially, stemming from the US dept. of Justice, the main site was shut down before there were related arrests in New Zealand, Canada and the Netherlands and Hong Kong customs froze a large chunk of assets belonging to the company. This as you remember lead to conspiracy theorists going wild claiming that these file sharing sites were helped in part by the very companies now suing them.
Of course in the aftermath of that came legislation in the form of SOPA and PIPA. In an interesting article I found while researching this piece, Mathew Ingram makes the interesting point on where we draw the line in terms of these files share services, for instance, whats the difference between say Zippyshare and Dropbox really? Other than how many people use it and how easily accessible it is, the line that separates legitimate sharing between record labels and the press or between artists sending tracks to their friends is barely defined. And even with laws passed to aid authorities in building a case against them, the Megaupload case sets precedent that a organisation can shut down or even financially cripple these file share sites with very little evidence. Essentially, he feels it smacks of Big Brother using its power to stifle the little guy. Many of these types of cases centre on copyright infringement, but many countries employ a fair use exception and if that file share company is prepared to take down any material the owners find contravenes that usage, should they been vilified as ‘modern day pirates’? Surely, sharing art in whatever medium, can only open our minds and make us a better, more tolerant species? Unfortunately, money rules and this will continue to be a problem for many years to come.