There have been many studies done about the effect of CD sales in the face of piracy and different possible marketing strategies that the record industry could adopt. An interesting finding among these studies was that "strategies that minimize piracy do not necessarily maximize revenues" (Bhattacharjee, 2003). Such a statement could beg the inquiry: is piracy not completely evil?
In another study, this research team examined the RIAA's claim of a decrease in CD sales because of illegal music downloads. According to their findings, there indeed was a 10% decrease in CD sales all over the world in 2001. While this could be due to any number of reasons, the primary hypothesis is that it is due to illegal downloading. However, in 2002, the drop in CD sales only reduced by 2%. While it is still a drop, it is significantly less than was what thought to be a 9% drop. Again, this could be due to any number of reasons and it only complicates any hypotheses that could be made in connecting the two years in CD sales. In addition to their findings, they have addressed the prospect of the music industry actually benefiting from the digital downloads. Their reasons are that it could potentially "save on marketing and promotion costs" (Peitz, 2004).
In addition to these studies, there are other facts and figures that must be addressed. Apple’s iTunes set the price at $1.29 per song so that they to be downloaded legally. For whatever reason, Apple has decided that this is the best price for MP3s to be sold at. Federal courts believe that a different price should be paid per illegal download. The minimum penalty per song downloaded illegally is $750 (RIAA).
It gets worse.
Not everyone who is charged is fortunate enough for such a "cheap" fine. A real fine that a pirate got charged with was $22,500 per mp3 illegally acquired. If that sounds ridiculous, how does $80,000 sound? Again, someone got fined that amount. In fact, you can legally be charged up to $150,000 per song. I haven't even started talking about going to prison for up to five years.
With such stiff penalties being implemented on the users of programs that promote piracy, you can be sure that the companies behind these programs are not left out.
Back in 2000, the music peer-to-peer file sharing giant Napster was sued for various forms of copyright infringement and was eventually shut down in 2001. Of course, there is a silver lining to this story: a some bands actually gained popularity due to the free promotion and distribution that they received through Napster. These bands include Radiohead and Dispatch. While some artists fought to put an end to Napster, others supported it based on promotional benefits.
A more resilient peer-to-peer giant, Limewire, was ordered to be shutdown on October 27, 2010. This was due to charges of a "massive scale of infringement." According to the RIAA's figures, the United States recorded music sales fell from $14.5 billion in 1999 to $7.7 billion in 2009. The RIAA believes that the main cause of this was due to the prevalence of peer-to-peer file sharing programs that had been around during this time period. Personally, I find this situation very reminiscent of the cassette situation with the RIAA in the 1980s. There are many other possible causes for this lost revenue, like a weakening economy for example.
It would not be any surprise if Limewire was a catalyst for the promotion and popularity of various artists. Surely the proponents of Napster would feel the same way about Limewire. With all of the studies being done and the legal problems being battled, I believe that there is a revolution that will take place in the world of music distribution.