Music piracy
Music piracy, often referred to as music theft, involves the unauthorized downloading and distribution of copyrighted music through various means, including file-sharing services and specialized software. The rise of digital formats, particularly MP3s in the early 1990s, significantly transformed music piracy, leading to widespread sharing of music online. One early catalyst was the creation of Napster in 1999, which allowed users to exchange music files, resulting in substantial revenue losses for the recording industry and prompting numerous legal battles. Despite the emergence of legal music streaming platforms like Spotify, music piracy remains prevalent, with a notable increase in "stream ripping"—a method that allows users to extract music from streaming services.
As of 2021, stream ripping sites accounted for a significant portion of music piracy, reflecting an ongoing challenge for the music industry. The economic impact of music piracy is significant, with estimated annual losses in the U.S. economy reaching $12.5 billion, alongside job losses and reduced tax revenues. Additionally, some individuals engage in music piracy as a form of protest against corporate control over music distribution. While legal action continues against piracy, changing consumer behaviors and preferences are also influencing the landscape, as many are shifting towards legal streaming options for offline listening.
Music piracy
Music piracy, or music theft, includes downloading unauthorized versions of copyrighted music from file-sharing services and illegally copying music using special software or mobile applications. According to the Institute for Policy Innovation, the US economy loses $12.5 billion annually because of music piracy. This also leads to the loss of 71,060 jobs in that piracy costs the sound recording industry and downstream retail industries $2.7 billion in annual earnings.
At one time, music piracy was limited to the distribution of illegally copied physical media, such as cassette tapes or records. Music piracy exploded with the introduction of MP3 music files in 1992. This allowed people to transfer music onto computers while maintaining relatively good sound quality. In 1999, a site called Napster was created that allowed people all over the world to share and download music. Because of the rise of Napster and similar platforms, the record industry suffered dramatic decreases in revenue. In response, the industry and some artists filed lawsuits against the company.
In the age of music streaming platforms like Spotify, music piracy still persists. In the 2020s, lawsuits shifted away from “pirate” sites and towards software creators that allow users to stream rip tracks from existing services such as YouTube. According to monitoring company Muso, there were more than 17 billion visits to music piracy websites in 2022.
Background
Music is protected by copyright law. Music piracy includes downloading unauthorized versions of copyrighted music from file-sharing services and illegally copying music using special software or mobile applications. One of the main drivers of music piracy was the invention of the MP3 file in the early 1990s. These files could be transferred to a portable MP3 player or put onto a compact disc (CD). Computers could then “rip” the files from a portable device or CD. These files could then be sent to other people over the Internet.
In order to control this kind of file sharing, the United States passed the Digital Millennium Copyright Act in 1998. The law became effective in 2000. The act was designed to prevent music “pirates” from duplicating digital copyrighted works and selling or distributing them. It also made it illegal to make or share tools or techniques to get around copyright controls. Critics of the law said that it has allowed game developers, music and film companies, and others to keep too tight of a control over how consumers use their copyrighted works. For instance, Lexmark, a laser printer manufacturer, used the law in 2002 to prevent third-party companies from selling refilled toner cartridges for its printers. Lexmark sued but lost.
In 1999, an Internet site called Napster was created by a nineteen-year-old American hacker Shawn Fanning. Napster allowed for the sharing of digital music files between users online. Fanning said the service was meant to allow people to share music already in their own collections. To use Napster, people had to download software and mark the computer directory where they stored their music files as shared so that other users could access it. When the user connected to the Internet and Napster, they could type in the name of a song or artist. Napster would connect them with users who had a copy of that song, and then they could download it. At the time, CDs were the most popular music format, but they cost about $16 per album. People were drawn to the idea of downloading individual songs for free. At its peak, Napster had more than 25 million users able to download 80 million songs.
The record label A&M was the first to sue Napster. Then in 1999, the Recording Industry Association of America (RIAA) filed a lawsuit against the company, seeking up to $100,000 for each copyrighted song shared on the service. On April 13, 2000, the band Metallica filed a lawsuit against Napster after finding an unreleased mix of their song “I Disappear” on the service. The lawsuit was for copyright infringement, racketeering, and unlawful use of digital audio interface devices. Metallica also compiled the names of 335,000 Napster users who had shared their music and asked Napster to ban them. Napster complied, but this created backlash from the public.
Many music critics said the music industry made a mistake by focusing on lawsuits. They contended that the industry would have been better off creating a competing, cost-effective service. Napster was forced to cease operations in July 2001, but it reopened in September 2011 after paying $26 million toward past and future royalties. It then attempted to shift to a subscription service, but largely failed because of the rise of other similar file-sharing services like Gnutella, Limewire, Kazaa, and Grokster, which continued to offer music for free. In June 2002, Napster filed bankruptcy and was taken over by music provider Rhapsody.
After the creation of Napster and similar services, there was a dramatic decrease in revenue to the recorded music industry. From 1975 to 1999, the value of US shipments of recorded music increased from $5.8 to $12 billion. Between 1999 and 2008, revenue from physical recorded music products fell back to $5.5 billion. Worldwide, revenue from physical recorded music fell from $37 billion in 1999 to $25 billion in 2007.
Topic Today
Music streaming made up 67 percent of the global record business in 2023, according to Statista. The rise of streaming music applications such as Spotify have not brought music piracy to end. In the 2020s, the music industry continued to pursue legal action for music piracy. However, in the age of streaming, lawsuits have shifted away from pirate sites towards software creators that allow users to stream rip tracks from existing services such as YouTube. For instance, the RIAA, which represents US record companies, won a case against FLVTO.biz and 2conv.com that could potentially lead to $83 million in damages. Both sites were dedicated to YouTube ripping. According to Muso, a digital piracy monitoring and management company, stream ripping sites accounted for nearly 40 percent of music piracy in 2021, up 33.9 percent from the previous year. In the United Kingdom, for example, the use of stream ripping software programs jumped significantly from 2016–2019. In the United States, the number of stream rippers went from 15 million in 2017 to 17 million in 2018, according to the MusicWatch Annual Music Study.
The COVID-19 pandemic also affected music piracy trends. Muso revealed that illegal music streams fell globally in March 2020. Europe, Japan, the United Kingdom and the United States experienced the most substantial decreases. Japan, in particular, dropped nearly 20 percent in illegal streaming. An article in Rolling Stone said this may have been attributed to changes to behavior during the early days of the pandemic—people were no longer spending time in their cars commuting to work, for instance. Nor were they in the office or gym listening to music. However, peer-to-peer illegal music downloading platforms, known as torrenting platforms, saw a resurgence. In the United States, music-related visits to torrent sites grew by 15.62 percent between the last week of February and the last week of March 2020. This trend was seen globally. Muso CEO Andy Chatterly said the trend back towards “old school piracy” could have to do with people wanting physical copies of music or subscription fatigue.
However, Muso said the number of visits to sites dedicated to music piracy increased by 13 percent from 2022 to 2023. The company reported 17 billion visits to piracy websites in 2023. Muso said the United States has the biggest piracy market, accounting for 10.6 percent of all global traffic. While TV piracy accounts for more than half of that traffic, music accounts for just 8.1 percent. According to the Institute for Policy Innovation, the US economy loses $12.5 billion annually because of music piracy. This also leads to the loss of 71,060 jobs in the US recording industry. Piracy also costs the sound recording industry and downstream retail industries $2.7 billion in annual earnings. Tax dollars are also at stake, according to the institute—federal, state and local governments lose at least $422 million in tax revenues annually.
According to Forbes, many people who illegally download music may feel they are making an ideological statement by striking a political blow against corporations. In 2019, MusicWatch reported that users who downloaded music illegally did it because they wanted to listen to music offline (46 percent) or because they didn’t feel that they should have to pay for individual songs (37 percent). However, trends that started in 2019 show that more and more users are considering legal audio streaming platforms as a better way to listen to music offline.
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