Silence music the industryWhen we want new music, there's a strong temptation to get it for free through file sharing, ripping it from our friends, or downloading it illegally. So perhaps it shouldn't surprise us that four out of five digital music downloads are illegal, according to the Recording Industry Association of America. In today's struggling economy, it's tempting to cut costs where we can, and easy to think the practice doesn't have any negative consequences.

The problem is, when you steal music, you aren't just hurting music executives, who are often stereotyped as greedy, rich businessmen exploiting the creativity of the musicians you love. You're also hurting the musicians -- and maybe yourself, too. The wide prevalence of music theft is changing the musical marketplace for the worse, reducing the incentive for musicians and labels to develop and finance new projects.

A Hostile Market for Musicians

Emily White, an intern at NPR's All Songs Considered blog, recently revealed that she has some 11,000 songs in her music library, though she's paid for just 15 CDs' worth. She says, "I honestly don't think my peers and I will ever pay for albums. I do think we will pay for convenience."

But as musician and University of Georgia instructor David Lowery points out in his open letter to Emily, this behavior hurts musicians, who earn an average of about $35,000 per year and get no benefits.

As Lowery notes, most record contracts include provisions for both royalties and advances to artists. Advances are paid before the release of a recording. If the album or songs bring in enough sales, the record companies recoup the money paid out in the advance. If not, they write off the loss. As music sales decrease, record companies will offer fewer (and lower) advances to minimize their risk of financial losses. Royalties are paid to artists for each song purchase. When we steal an artist's work, neither the record company nor the artist receives compensation.

Lowery asks us to imagine a neighborhood that is loaded with record stores but lacks a police force. Many people steal from these record stores, because they know they will rarely be punished for their crimes. Record stores allow this behavior, because they can gain a profit from selling ad space on their walls, and can eliminate expenses associated with paying musicians for their work.

The record stores in this fable, says Lowery, correspond to illegal downloading sites like The Pirate Bay and Kim Dotcom's Megaupload, which make money from selling ad space through companies like Google (GOOG), which also makes a profit from this shady behavior.

Everybody gets paid -- except those who created the music.

But the negative effects don't end there, says Lowery. Consumer behavior in this unpoliced neighborhood shapes the decision-making processes of legitimate businesses such as Spotify that follow the law. Spotify has faced endless complaints about how little it pays artists.

So how do illegal downloads alter the behavior of businesses like Spotify? First, the prevalence of illegal downloading and other music theft reduces the pricing power held by Spotify and its peers, encouraging them to generate profits by cutting costs in the form of artist compensation. Second, the ready availability of free music gives musicians less pricing power. Since their music is available for free elsewhere, they are forced to take what they can get for their work.


The Sound of Silence

This theft not only harms the musicians you love, it also harms music lovers by reducing the incentive for labels to develop and produce new music. In other words, it's likely to reduce our access to good music in the future.



It stands to reason that musicians in need of money will turn to other alternatives for making a living. Love for one's occupation only goes so far, as suggested by Lowery's claim that "the number of professional musicians has fallen 25% since 2000."

Without stricter regulations or changes in consumer behavior, we risk silencing the musicians who inspire us.

Motley Fool contributor M. Joy Hayes, Ph.D., is the principal at ethics consulting firm Courageous Ethics. She doesn't own shares of any of the companies mentioned. Follow @JoyofEthics on Twitter. The Motley Fool owns shares of Google. Motley Fool newsletter services have recommended buying shares of Google.

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Lynne M

Music is a part of almost everyone’s daily life whether you are in the car listening to music, in the elevator, doctor’s office or in your office there is music all around us. But how often do we think about where the music comes from and who really profits from the sale of the songs we listen to? I can honestly say that when I was younger I never really thought about it. Being someone who grew up in the 80’s and 90’s with a vast supply of blank cassette tapes I know I recorded off the radio which in a way is the same as illegally downloading music today. But I never realized until I was older and the stealing digital music became a hot topic that what I was doing was wrong. I guess I figured if they sell blank tapes they know what was going to be recorded on them. Ess states that David Pogue suggests that a generation gap is to blame for the ethical sensibility in regards to the ethics of copying and younger people because of today’s technology don’t consider it wrong (Ess, 2009, p. 71). Maybe if they understood how little the artists actually get paid and their dependency on the royalties from their songs they might think twice before stealing ones work. If not I think they will get it when their favorite artist can no longer afford to do what they love (play music) and slip away into never land to get a job just like every other non-musical person.
Works Cited
Ess, C. (2009). Digital Media Ethics. Malden: Polity Press.

July 10 2013 at 12:11 AM Report abuse rate up rate down Reply
bryanlambeth

Here is my take on the whole "downloading music" topic. Anyone who grew up in the 80's I guarantee at some point in time you set next to a "boom box" with a cassette tape in the deck, the record button pressed down along with the pause button and tuned into your favorite radio station. We were just waiting for the radio DJ to play our favorite song(s) and we always had our hand on that pause button ready to record that song at a moment’s notice. Were we breaking the law by doing this? I sure hope not because at one time I had a whole shoe box full of music I copied off the radio. Did you ever "dub" a tape or CD from your friends? Once again, were we breaking the law? What ever happen to loving what you do and sharing that love with the world? According to Ess (2009) copying is an activity that expresses highest respect for the work of the author By the same token, a master philosopher or thinker is motivated primarily by the desire to benefit others with his or her work – rather than, say, personally profit through the sale of that work, (Kindle Locations 1765-1769). It seems to me the recording executives and musicians are becoming extremely greedy and may be losing fans in the process.

Bryan

June 19 2013 at 5:15 PM Report abuse rate up rate down Reply
javiprince

To comment on your idea that less quality music will be produced and released due to there not being enough money to provide an incentive- I find that to be a good thing. Please, let's get rid of the musicians who's only incentive to create is the paycheck that will come and instead, listen to the good music made by musicians who don't have an incentive to create, but create because they need to in order to be happy. That's the kind of music I want to hear, and that is the kind of music I would be happy to pay for, and support- weather that means I buy the album, or I steal the album and catch a live show instead.
Also as to pirate bay and other sites making all the money from advertisements on their site- Record Labels are capable of the same thing. Release music for free on their website, and collect money from advertisements. We can not stop fans from stealing music, and we can not fight it, so we must embrace it, and find the new revenue streams.

December 18 2012 at 1:26 PM Report abuse rate up rate down Reply
ATM

Indie artist- join World Music League and keep 70-80% of your revenues and enjoy leveraged marketing support -

The new label for the Indie artist... World Music League is here!

July 08 2012 at 4:38 PM Report abuse rate up rate down Reply
ATM

Visit http:\\www.worldmusicleague.com and visit Worldmusicleague on youtube

July 08 2012 at 4:37 PM Report abuse rate up rate down Reply
ATM

Today's music is great --- just not at the major labels or at radio, where they manipulate spins on late night "sponsored shows" to manipulate who stays in the top 40 ... that's tight - everytime a song is played, even in a "sponsored show" it is counted a s aspin- so record executives have motive to "sponsor" or payola their way onto radio.

July 08 2012 at 4:36 PM Report abuse rate up rate down Reply
ATM

When an artist performs and the promoter and broadcaster keep 85% of the revenues from merchandise, airplay, writer's royalties, publishing- it is time to move on and write my own music for enjoyment and stop funding the high ticket expenses from the meg-concert rippoff companies.

Any ticket outliet that charges more that $2.50 for a ticket convenience fee is ripping off the public and the artist...

July 08 2012 at 4:32 PM Report abuse rate up rate down Reply
ATM

The music industry and the Artist are two different animals....

I avoid Clear Chanel, Live Nation, and focus on local musicians to fund their ambitions.

America and music go together... having congress set a royalty rate which goes to a writer, but not a band, is abusive and is not fair in any manner.

July 08 2012 at 4:31 PM Report abuse rate up rate down Reply
1 reply to ATM's comment
HumanFankind

do you ever consider using www.HumanFankind.com to support them?

July 19 2012 at 10:05 PM Report abuse rate up rate down Reply
cdrr61

Hey, I don't feel sorry for the music industry. I remember when CD's first came out. The prices were outrageous!! They stayed high for many years! Music companies ripped off the public. Ordinary musicians never made much money and always needed a second job. The industry does have a police force, its well known that people are sued by the record companies for illegal downloads. The music companies had a chance to deal head on with the problem when everyone was downloading from Napster. they should have negotiated a settlement, instead they shut it down and everyone scattered. Now there are many different sights.

July 07 2012 at 9:25 AM Report abuse rate up rate down Reply
rowenabeau

At least musicians who are paid and recording studios pay taxes on their earned income. There's an "ebook search" site for sale that claims to make $60,000 a month from advertising revenue.
https://flippa.com/2761490-ebookee-org-impressive-revenue-ebook-search-engine-downloads-huge-traffic

July 07 2012 at 9:07 AM Report abuse rate up rate down Reply