Internet Commons and Its Impact on Entertainment Industry in US: A study on impact of Music CD Sales to
Warner Brothers

Assignment on Preparation of Research Proposal

Submitted by George Maliyeakal Antony

26-04-2010

Introduction Rationale and Objective

Introduction
In the era of modern technologies in the digital world with the internet access has created a huge amount of digital resources which can be accessed through the web. These resources are widely accessed by the people around the world and referred to have the nature of a common property. There is several studies on the common property has been under taken from the past five decades which can be stated as “everybody’s property is nobody’s property” Wantrup, C. and Bishop, R. (1975. pp:1). As majority of these internet resources doesn’t have legal access rights protection it leads to the free access these online resources by the communities. Internet is considered to be a ‘no-mans land’ where no one has really a control over it, all over the world Internet consists of 15000 computer networks linked to twenty million users in more than 175 counties and the users increasing drastically (Smith. R 1997 P: 01). The lack of international institutions for the monitoring and control of internet piracy and most of the nations crafting their own rules which is not sufficient to tackle the cases reporting from other nations because it might be not directly related with their concern.

People started using resources as a knowledge base and a tool for information sharing, online trading, banking and entertainment. When the people started using internet for entertainment purpose there was a huge demand for music and video downloads using credit cards. Mean time people started searching for less priced or free downloads which given a boost for the piracy industry exploit this opportunity. With the invention of newer technologies day by day people’s traditional music concepts started changing and people started accessing internet for the purchase and download the music rather going in to the CD outlets. From 2001 onwards there was a drastic reduction in the sales music CD’s as people preferred to download from peer-to-peer[1] service providers.

The Warner Brothers one of the leading Music Company which is started in 1918 by four brothers is the worse hit with internet piracy as it had reduced its music CD sales more than 20 % in 2008 and 2009. The company is now trying to control the internet piracy by recruiting student interns from universities to locate and spy on pirates. In US the counterfeit of pirate CD is 2,795,693 in 2001 and 5,298,368 in 2002 with growth of 89.5% (RIAA-2002)

Statement of Issue
The music industries in US and all over the world are trying to control the internet piracy of music as it directly affecting the sales of CDs and cause huge losses. There isn’t much success for such efforts because internet still remains as a common property and the current institutional framework lacking the international policies to prevent such illegality. Apparently the skill and technological expertise of piracy industry is remaining unchallengeable and they keep on upgrading their system.

In this study it is tried to understand the actual impact of music piracy on the CD sales of Warner Brothers a leading music company in US. There are two types of piracy online piracy and off line piracy, in online piracy one person downloads the music and use by him where as in offline piracy one person downloads and share it with his friends. In offline piracy the rate impact is up 500% than online piracy because single downloaded material normally shares more than 5 persons (Peitz, M. and Waelbroeck,...

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