1. Digital Music Distribution By: Gregory Javardian, Andrew Kelly, Colin McGrail, Nicholas Mortimer, Daniel Zantzinger

2. What is Digital Music Distribution? Digital Music Distribution is the process of uploading, copying, spreading, downloading, and consuming of music. The process begins with the source of the music(artists or record labels) and ends with the user. There are many ways music can be distributed and consumed on the Internet. Sparrow, Andrew. “Introduction to the Internet and its Impact on Music Distribution.” Music Distribution and the Internet: A Legal Guide for the Music Business. 2006. http://books.google.com/books?id=JdGvh8FKwG8C&printsec=frontcover#v=onepage&q &f=false

3. Distribution Services Music is distributed through two different services, direct downloading(iTunes, Amazon, etc) and streaming(VEVO, MySpace, etc). The services which people use can either be illegal or legal. Illegal distribution is when the music is distributed by somebody not authorized by the intellectual property right owner.

4. Background of DMD Napster – Created by Sean Parker in 1999 – First peer to peer file distribution system – Music artist became upset with Napster and Metallica filed a lawsuit for early release of ‘I Disappear’ in 2000 – Lawsuit filed by the RIAA in December of 1999 caused the closing of Napster in 2001 due to decrease in profits http://www.hometechanswers.com/mp3/histo ry-of-napster.html

5. LimeWire Free peer to peer file sharing developed in 2000 Versions – Free – Purchasable which allowed users more enhancement Networks – Gnutella – BitTornnet protocol Virus Attacks Legal Issues – Injunction issued in 2010 by Federal Judge which caused Limewire to freeze their networks http://music.lovetoknow.com/History_of_Lime wire Arango, Tim. "Judge Tells LimeWire, the File-Trading Service, to Disable Its Software." New York Times (2010): 3. Web. 22 Nov 2010..

6. Legal Options Amazon.com Apples iTunes eMusic.com Royalty Free Music Pandora YouTube http://www.google.com/imghp

7. Which companies are affected by DMD? “…suggests the music industry has ‘so far failed to adapt’ to the digital age.” 2 Record Labels – The “Big Four” Warner Music Group creates “e-label” 1 Sony Music Entertainment EMI Group Universal Music Group Musicians – U2’s No Line on the Horizon – available via download before release – “Leaked” CDs 2 http://www.pcworld.com/article/112857/is_th e_music_industry_stuck_in_the_past.html 1 http://www.digitaltechnews.com/news/20 05/08/elabel_coming_f.html

8. How are they affected? “According RIAA figures, US recorded music sales fell to $7.7bn in 2009 from $14.5bn in 1999” 1 – Digital Labels require less investment in distributing and promoting new albums 2 – Loss in album sales – Illegal file sharing phenomenon – Emergence of legal download services – Piracy results in loss of money 1 Fitchard, Kevin. "CTIA: Play it on the phone." Telephony 248.18 (2007): 7. Academic Search Premier. EBSCO. Web. 21 Nov. 2010. 2 http://www.guardian.co.uk/technology/2 010/oct/27/limewire-shut-down

9. What decisions to be made about DMD LimeWire shut down by federal court 1 How are we going to download music digitally? – Who is going to be in charge of download standards? Will there be Royalties per download? – What is a fair price? Bandwidth – Will downloading music affect available bandwidth? How to prevent theft/illegal downloading – Shutdown of Napster, LimeWire, etc. 1 http://www.guardian.co.uk/technology/2010/oct/ 27/limewire-shut-down

10. Digital Music Distribution http://www.google.com/ url?sa=t&source=web&cd =3&sqi

11. Threat to Existing Industry and Companies Digital music distribution has been a big threat to CD industry and all genres of music. Interestingly, the CD industry introduced the beginning of the digital music industry. Digital music distribution is doing to CD’s what CD’s did to cassettes and records. With so much music being downloaded and shared, CD companies and stores, such as FYE, the Wall, and Tower Records, took immense hits. The older music industries and media resist the new digital music media through the four steps of: (1) complacency, (2) resistance, (3) differentiation and(4) diversification (Furgason).

12. Threat to Existing Industry and Companies (cont.) There have been many lawsuits and backlash against digital music distribution mediums for stronger copyright protection, which essentially caused the termination of familiar names, such as Napster and more recently, LimeWire. The damage has been done though by these file sharing networks as they have caused billions of dollars in damages to other facets of the music industry (Fergason). There are still other file sharing networks for the general public to download and distribute from that will continue to negatively affect the CD industry.

13. Threat to Existing Industry and Companies (cont.) Branches of the CD industry are affected as well, such as graphic companies who design art work for physical CD covers. Obviously, downloading music is simpler and more convenient for individuals; therefore, we can expect to continue to see digital music distribution to grow while the CD industry and other music industries continue to decline.

14. Solutions Cheaper downloads for consumers  $$$ – Cheaper downloads for the consumer brings more consumers to the marketplace. – Allow the artist to determine the price of the songs/albums Cheaper downloads for consumers  $$$ – Cheaper downloads for the consumer brings more consumers to the marketplace. – Allow the artist to determine the price of the songs/albums

15. Solutions Higher royalties for the artists. – Higher royalties for the artists is more reasonable as they are the ones who are producing the product. – Expenses for operating a digital download database are low. Higher royalties for the artists. – Higher royalties for the artists is more reasonable as they are the ones who are producing the product. – Expenses for operating a digital download database are low.

16. Solutions Artists should spend less money on distribution of physical CD’s and put more emphasis of distributing music digitally. – Artist such as Radiohead released their album via their website – Artists would save money on graphic design because they would produce less album art Artists should spend less money on distribution of physical CD’s and put more emphasis of distributing music digitally. – Artist such as Radiohead released their album via their website – Artists would save money on graphic design because they would produce less album art

17. References Sparrow, Andrew. “Introduction to the Internet and its Impact on Music Distribution.” Music Distribution and the Internet: A Legal Guide for the Music Business. 2006. http://books.google.com/books?id=JdGvh8FKwG8C&printsec=frontcover#v=onepage&q&f=false Arango, Tim. "Judge Tells LimeWire, the File-Trading Service, to Disable Its Software." New York Times (2010): 3. Web. 22 Nov 2010.. Fitchard, Kevin. "CTIA: Play it on the phone." Telephony 248.18 (2007): 7. Academic Search Premier. EBSCO. Web. 21 Nov. 2010. http://www.hometechanswers.com/mp3/history-of-napster.html http://music.lovetoknow.com/History_of_Limewire http://www.pcworld.com/article/112857/is_the_music_industry_stuck_in_the_past.html http://www.digitaltechnews.com/news/2005/08/elabel_coming_f.html http://www.guardian.co.uk/technology/2010/oct/27/limewire-shut-down