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The Effects of Peer-to-Peer File Sharing On the Music Industry and Possible Technical Solutions

CHAPTER ONE
INTRODUCTION

1.0. Overview

The advancement in technology has in one way or the other led to the discovery of the Internet and its associated benefits.Individuals across different age groups have found the Internet very helpful in their day-to- day activities as it has increasingly become a source of information and vital services.

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Quoted among these services include the numerous social networks that allow surfers to share files by passing them from one place to another via the Internet. This service has been variously referred to as Peer-to-Peer (p2p) filesharing and is lauded to have brought joy and laughter to over 60 million people across the globe. The music industry and related associations would not be included in these statistics because research work has shown a great dichotomy (Alejandro, 2005). Experts have been cited as saying that filesharing becomes an illegal activity when copyright material is made available without the permission of the rights holders particularly recording studios in the music industry.

In view of this argument, research findings have shown that filesharing involves the trading of digital files with other users over the internet causing untold financial suffering to the affected companies and institutions. This act of Peer-to-Peer filesharing has received a widespread adoption and facilitation due to a number of factors. Firstly, the increasing Internet bandwidth and the widespread digitization of physical media files have substantially made home PCs capable of managing digitized audio and video files in a far much better way (Ethan, 2007). This has additionally made it relatively easy to transfer several files from one computer to another across the Internet using various file management networks as observed by Eric (2008). Further observations by Ethan (2007) have revealed that the music industry has repeatedly shown concerns over the potentially devastating impacts of online music sharing. In this regard, the present study has proposed to analyze the effects of p2p file sharing on the UK music industry and effectively recommend viable solutions to this heinous act. The first chapter is presented through the sections discussed hereunder.

1.1. Background

Published works in this area indicate that the majority of people across all age groups are currently involved in downloading all forms of information freely from the internet. All sorts of information including copyrighted material are readily made available online by various filesharing websites resulting in adverse financial repercussions to the concerned companies. According to claims by Stephen (2007), social networks such as Facebook and Napster are shown to have made filesharing a commonplace phenomenon amongst the world’s young population. Additionally, Stephanos & Spinellis (2004) further observe that peer to peer has been equated to the sharing of popular music and other kinds of digital data transfer. This concept of filesharing is definitely very popular with consumers the world over as is evidenced by the rapid escalation of p2p application networks that are growing faster than any other technology (Moya, 2008). It is further stated that p2p technologies have generated heated debate among players in the media industry for their unauthorised distribution of copyrighted material (Shuman, 2002). This has led to the raising of the red flag in the music industry due to the enormous financial losses in recent times occasioned by the increased decrease in the sale of record labels as noted by Phillips (2010).

The argument in the foregoing paragraph is reportedly found to have resulted in the growing concerns over music piracy in the past few years. It is however in order to mention here that the nature of technology has changed tremendously owing to the fact that the popularity of music artists is short lived and the market situation changes abruptly (Phillips, 2010). This fact has effectively forced music artists to join the fight against piracy in defense of their plight according to reports by Peter (2008). In the views of Sean (2004), artists from both concerts and recorded music sales are shown to be the real gainers from illegal filesharing at the expense of record labels. This claim is supported by the increased revenue collections from the said artists over the past five years as underlined by Felix & Koleman (2004). It has therefore become more necessary and fundamental for the music companies to address this very disturbing issue. According to Felix & Koleman (2004), the net effect of illegal filesharing in the UK and elsewhere in the world has been the reduction of legitimate sales and the eventual decline of spending on recorded music. Although it is impossible to estimate the actual cost of unlawful P2P filesharing to the music industry, reports show that close to ?180 million have been lost annually by the UK music industry as quoted by Ethan (2007). In view of the increasing illegal filesharing activities especially in downloading music files, it has become necessary for the music companies in UK to come up with appropriate initiatives that can arrest this situation.

1.2. Problem Statement

Bhattacharjee et al (2006) have noted that there are devastating impacts associated with filesharing particularly in the emergence of digital libraries that seem to embrace the concept of communal property where virtually everything is shared. The overall impact of filesharing according to Frans (2008) will be an increased concern to the publishing industry whose livelihood is put under eminent threat. Since digital files are easily copied, perpetrators of filesharing are simply publishing large volumes of data denying the rightful owners their dues (Britz, 2002). For these pertinent issues, urgent interventions need to be urgently initiated in order to address these afflictions.

1.3. Significance of the Study

The results of this study are deemed critical in attempting to address the impacts and effects of file sharing on the financial health status of the music industry in the UK. This study used the general aims and objectives mentioned hereunder in embarking on this fundamental exploration. It therefore aimed to:

find the status of file sharing and music downloads in the United Kingdom
analyze the impact of file sharing on the music industry in the UK and the eminent legal solutions available for the music companies and
recommend viable suggestions to protect the rights and stop illicit download of music by the users

1.
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4. Research Questions

Given the magnitude of the issue at hand, the following research questions were used to conduct the survey:

What are the effects of Peer-to-Peer file sharing on the UK music industry
What are the legal implications for those engaged in file sharing
What are the possible technological solutions to the effects of Peer-to-Peer file sharing

1.5. Limitations and Delimitations of the Study

All field studies have been known to face a number of limitations. The most notable in this study was the existence of method bias attributed to the use of a single questionnaire in the collection of data. This impacted on the validity and reliability of the instrument because of the possibility of inflating the relationships existing between constructs under study (Masters, 2010). The respondents also showed some marked indifferences towards participating in the study due to a loss of interest probably from monotony. Moreover, time and cost constrains played a major role in challenging the completion of the study. These limitations were mitigated in one way or the other by initiating appropriate measures as each case demanded.

1.6. Chapter Summary

The chapter introduced the primary themes prevalent in the research and addressed all the major issues in the context of the study. It outlined the essence of the study, explaining the problem and significance of the study as well as the research questions being addressed. The chapter finally identified the limitations that the research had to contend with. This was in line the findings of the vast body of literature search reviewed by the researcher in the next chapter.

CHAPTER TWO
LITERATURE REVIEW

2.0. Introduction

On reviewing literature related to the effects of filesharing, it reveals that very little discussion and research work has been done in attempting to come up with technological solutions viable in addressing this retrogressive problem. According to Phillips (2010), the existing knowledge gap is found to be lacking in proposals aimed at innovating viable mechanisms for both the music industry and Internet Service Providers to enter into a collective licensing agreement that would help them solve their impasse. Suggestions by Klaus (2005) find it amicable for ISPs and individual users to pay a flat fee in exchange for unrestricted use of any p2p filesharing technology for downloading music. As noted by Liebowitz (2006), this solution would result in the music industry being compensated for their currently infringed-upon copyrighted works and would promote the use of p2p filesharing technology by more users. This according to the views of Gribble et al (2002) will translate to more users utilising p2p filesharing and hence the music industry would receive more money in fees. In view of this realization, it has become very necessary for experts to investigate the outlawing aspect of filesharing in view of tracing the root cause and magnitude of the said problem particularly on the fiscal aspect. This chapter delves into an in-depth search of related literature in an attempt to discovering the enormity of the vice.

2.1. Historical Overview and Current Findings

The term filesharing has been defined as the act of exchanging digital files between users over the internet (Wally, 2004). It is an activity perpetrated by users who download and upload files to be accessed by peers without the express permission of the rights holders. As observed by Peter (2008), this action is considered illegal when copyright material is shared between peers without the consent of the producers. Further observations made by Bhattacharjee et al (2006) indicate that filesharing came into existence with the advent of computing and informatics discipline. This is dated back to the late 70s when files are reported to have been first exchanged on removable media using computers (Alejandro, 2005). In the mid 80s, this practice is further indicated to have advanced into using more reliable and effective servers to share files. These earlier forms of filesharing are reported by Britz (2002) to have given way to the Internet Relay Chat in 1988 and Hotline of 1997 which were both able to allow users to communicate remotely through chatting and file-exchanging. The standardization of MP3 encoding in 1991 substantially reduced the size of audio files and grew rapidly throughout the 90s to its current state. According to arguments by Ethan (2007), the MP3 format is currently offering music by unsigned artists and serves close to over five million audio downloads daily across the globe.

Apart from this seemingly short history, arguments by Klaus (2005) demonstrate that the earlier forms of filesharing were comparatively primitive and purposed mainly to provide a platform for the exchange of text-based messages as well as allowing users to encode files and distribute them to participating subscribers through attachments. At the time, published works in archives claim that files were generally stored on large central servers with all users connected to that server in order to download files (Shuman, 2002). Additional reports by Sean (2004) further illustrate that the period between 1979 and the mid 1990s saw the perpetration of filesharing being effectively done through bulletin board systems and Usenet. But still in the same line of thought, Stephen (2007) argues that the advent of peer-to-peer (p2p) software facilitated direct filesharing system between users effectively removing the necessity of a central server. Instead, all operational sites simply index the location of the files on each participating individual’s computer (Stephanos & Spinellis, 2004). This enables users to download popular files very quickly by connecting to multiple users.

In another development, reports allude that the release of Napster as a centralised unstructured peer-to-peer system sometime in 1999 opened the doors to free access to digital files. After the blocking of Napster in 2000, Gnutella was released as the first decentralized filesharing network in the continent with all connecting software being considered equal and with no possibility of failure as observed by Alejandro (2005). The eventual shutting down of Napster late in 2001 saw the escalating migration of users to other P2P applications and file sharing continued its exponential growth as propounded by Eric (2008). The most outstanding development is witnessed before the end of 2004 when Kazaa network reigned as the most popular file sharing program before its decline from bundled malware and legal battles in various countries across the globe.

The collapse of Kazaa gave way to the development of the modern day Spotify which is a music streaming service offering unlimited streaming of selected music from a range of major and independent record labels with virtually no buffering delay (Felix & Koleman, 2004). The Spotify system is currently accessible using a number of operating systems including Microsoft Windows, Linux and several mobile devices like the iPhone and those compatible with web OS as highlighted by Britz (2002). Further highlights by Frans (2008) indicate that music can be browsed by artist, album, record label, genre or playlist in addition to direct searches. According to observations proffered by Masters (2010), there is a link on desktop clients that allows the listener to purchase selected material via partner retailers.

Reports abound indicate that the company Spotify was incepted in 2006 (Phillips, 2010) but was launched for public access in late 2008. According to 2010 statistics, the Spotify service had approximately seven million users; about 250,000 of these being paying members. Immediately after opening its access to the public, Spotify is reported to have announced licensing deals with many major music labels and was opened for free registration in the UK in 2009 (Masters, 2010). Ostensibly, this provision attracted a surge in registrations following the release of the Spotify mobile service forcing Spotify to close its open registrations in the UK towards the end of the same year as observed by Masters (2010). The free service is now invitation-only, although it was possible to bypass the invitation system for several months by opening the registration page directly. This loophole had then been closed and the registration page required an invitation code. Subscriptions may still be purchased without an invitation.

2.2. Effects of Peer to Peer filesharing

In the views of Peter (2008), Internet distribution of music without the consent of the copyright owner harms the careers of current and future artists firstly because record companies would have fewer sales and secondly because musicians, singers, songwriters and producers depends heavily on royalties and fees gained from their music. This claim is supported by study findings indicating that filesharing is a big hurt to sales even though not to the precise degree “the record industry would like the public to believe”. Additionally, p2p and the impact of filesharing upon so many delicate matters have got into the top list of most controversial issues and are poised to remain there for a long time. Because it engages the boundaries and the interests of innovators, content owners and consumers; it has triggered new, difficult and definitely interesting questions significantly regarding how the interests of some IP owners should affect the development of technology (Shuman, 2002). All in all, available data is substantial to conclude that online illegal filesharing has some negative influence on conventional sales even though the size of this effect is highly debatable (Stephen, 2007).

The Digital Economy Act is the latest Government crackdown on illegal file sharing. The perpetrators accused of illegally downloading music and films will receive a letter via their respective Internet Service Providers (ISP). This could result in repeat copyright infringers having internet access slowed or blocked altogether under secondary measures in the act. As of April 2011, the Digital Economy Act will not come into force for at least another six months due to a high court challenge from BT and TalkTalk respectively (Halliday 2011).

2.2.1. Economic impact on the music industry

The economic effect of copyright infringement through peer-to-peer filesharing on music revenue has been controversial and difficult to determine. But a recent report by Phillips (2010) indicates that the UK music sector lost an estimated ?200m in 2009 to online copyright infringement due some 7.3 million people engaged in unlawful filesharing. The report further predicted that the cumulative cost to music companies will run into ?1.2bn between the years 2007 and 2012. Losses of this magnitude are clearly unsustainable and suggestions call for the support of Internet service providers and the government to assist the music community in tackling the issue. According to published statistics, music sales dropped globally from approximately $38 billion in 1999 to $32 billion in 2003 attributed to illegal filesharing. Additional reports by the MPAA as quoted in Stephen (2007) indicated that American studios lost $2.3 billion to Internet piracy in 2005, representing approximately one third of the total cost of film piracy in the United States.

In yet another study conducted by independent Paris-based economics firm TERA in 2010 (cited in Masters, 2010), it was estimated that unlawful downloading of music, film and software cost Europe’s creative industries several billion in revenue each year. Moreover, the study predicted that losses due to piracy are expected to reach as much as 1.2 million jobs and ˆ240 billion in retail revenue by 2015 if the trend is not checked (Phillips, 2010). Research findings conclude that piracy rates of 25% or more for popular software and operating systems have been common even in countries and regions with strong intellectual property enforcement. Hence, small independent labels have pointed out that the negative economic impact of illegal file sharing on them and their grass roots artists cannot be denied as it is difficult to compete with unauthorized free distribution of their copyrighted music as envisioned by Masters (2010).

2.2.2. The legal implications of filesharing

Since the increase in home internet connections and download speeds in recent times, the unauthorised sharing of copyrighted music and video files has become increasingly popular. According to estimates by Peter (2008), close to six million people are confirmed to be regularly filesharing copyright content without permission. The music and film industries have tried largely in vain to prosecute those who perpetrate this kind of activity. But a breakthrough was achieved in 2009 with the successful conviction of a key player in the filesharing industry as reported in Phillips (2010). Many observers claim that this outcome could have significant implications for the future of filesharing in the world at large. The current breakthrough involved the successful conviction of the four owners of The Pirate Bay, the world’s most high-profile filesharing website for breaking copyright law (Sean, 2004). The presiding court found the four guilty as charged and were sentenced to one year’s imprisonment and ordered to pay damages amounting to $4.5m as outlined by Masters (2010).

The foregoing revelation is critical in demonstrating the enormity of legal implications of engaging in illegal filesharing. The court case in reference in this discourse was made airtight following reliable testimony adduced from computer forensic experts that established that the facilitation of filesharing can concretely be considered a crime in itself (Eric, 2008). The basis of this court ruling was found to reside in the fact that a breach of copyright by the filesharing application was evident and the perpetrators were indeed aware of providing material protected by copyright for access to the public. Following this ruling, experts stipulate that other filesharing site owners and perhaps even p2p software developers could be convicted of breach of copyright (Bhattacharjee et al, 2006). Even claims are rive citing the giant Google search engine as earmarked for prosecution for providing links to copyrighted material that has been uploaded without authorisation (Bhattacharjee et al, 2006).

2.2.3. Public perception in the usage of filesharing

As already indicated elsewhere in this dissertation, filesharing has been perpetrated with such abandon across various nations in the world using the internet. Research findings have variously illustrated that most of the perpetrators of this vice have been much ignorant of their actions arguing that there is nothing wrong in exchanging files with peers. A case in point is presented by Alejandro (2005) who claims that an estimated 70 million people participated in online filesharing in 2004. Additionally, a CBS News poll reported by Felix & Koleman (2004) indicated that nearly 70% of those aged from 18 to 29 years thought filesharing was acceptable in some circumstances while 58% of all Americans who followed the filesharing issue considered it acceptable in at least some circumstances. It is also indicated that some 32 million Americans aged over 12 years had downloaded at least one feature length movie from the Internet early 2006 with over 80% of them reportedly having used the p2p software (Peter, 2008).

Alternatively, 40% of the population sampled felt that downloading copyrighted movies off the Internet constituted a very serious offense equitable to taking a DVD from a store without paying for it according to 78% of the focus group. This comparison was short in substance by ignoring the obvious distinction that taking a DVD from a store deprives the store owner of an object that they could otherwise sell to another person while downloading data does not deprive a business from selling that very same data to another person as explained by Phillips (2010). Moreover, filesharing results in creating an enormous illegal library of music available for illegal download thus constituting stealing and cheating which deprives the government and the music industry tens of millions of pounds each year.

Finally, it is indicated that 20% of Europeans used filesharing networks to obtain music in mid 2008 with 10% percent using paid-for digital music services such as iTunes (Masters, 2010). Another survey conducted in UK by Phillips (2010) found that 75% of the British public polled was aware of what was legal and illegal in relation to file sharing. There was however a significant divide as to where they felt the legal burden should be placed with 49% believing P2P companies should be held responsible for illegal filesharing on their networks while 18% viewed individual file sharers as the culprits and another 18% either didn’t know or chose not to answer (Phillips, 2010). In the same survey, 60% of people reported downloading music because of a limited budget. A common attitude concerning music downloading was that of ‘why should one pay for something when they can get it for free?’ as observed by Phillips (2010).

2.3. Recent studies

According to study findings presented by Alejandro (2005) on the public opinion about filesharing, it was effectively reflected that filesharing economically hurts music and record sales. Although this was also found to be true of other numerous economic studies, their conclusions fell short of pinpointing the precise degree “the record industry would like the public to believe” the extent of their financial hurt (Felix & Koleman, 2004). One disturbing study conducted in 2004 by two economists significantly deviated from these findings by concluded that music filesharing’s effect on sales was “statistically indistinguishable from zero” as reported by Felix & Koleman (2004). The results of this research were challenged by many as having been doctored and manipulated to suit the selfish intentions of the researchers (Liebowitz, 2006). Similarly, a 2006 study published by Industry Canada as quoted in Ethan (2007) made the conclusions that filesharing has no measureable effect on the sales of CDs. These conclusions were contradicted by another study in 2007 conducted by the Institute for Policy Innovation cited by Phillips (2010) that upheld that copyright infringement of movies, music and software, including unauthorized downloading costs the US economy some 373,375 jobs and $58 billion in annual output.

Using a recent Billboard report of 2010, Phillips (2010) indicated that the production of music, books and movies has increased tremendously since the advent of file sharing. This in effect negated the very fact the recently observed decline in record sales is due to file sharing. In fact, proponents of filesharing hold that illegal downloading had not deterred people from being original. They remained creative with or without the motivation of monetary incentives particularly those in creative industries. In their views therefore, adduced data on the supply of new works are consistent with the argument that file sharing did not discourage authors and publishers in any way (Phillips, 2010).

2.4. Chapter Summary

This chapter has delved into an examination of an extensive and diverse body of literature by attempting to review relevant literature in the area of Peer to Peer file sharing. Most recent studies have also been scrutinized and found to have been broad-based and not touching on the in-depth effects of illegal file sharing particularly in the music industry. These studies have also been found to be defining to the quest for knowledge as they endeavour to shed light of whether there is any change in direction adopted by the UK music industry and individual companies. Having carried out the evaluation and scrutiny of the literature available from various studies, the next chapter presents the approach that best fits the needs of this study.

CHAPTER THREE
RESEARCH METHODOLOGY

3.0. Introduction

This dissertation used the quantitative approach to realize the aims and objectives set originally at its inception. It thus took the form of a case study approach which is deemed desirable to facilitate the exploration of the impact of p2p file sharing on the UK music industry through empirical methods. The quantitative method was found to be appropriate in this study due to the fact that it is guided by a practical model according to highlights by Balsley (2006). It is further pinpointed by Davies (2007) that the quantitative method of research is one that is made up of counting and measuring events and performing the statistical analysis of a body of numerical data. The method is observed to be highly deductive and particularistic; implying that the study is ought to produce reliable and valid data. In view of this argument, the researcher employed the said approach in collecting reliable data that was ideal in addressing the impacts of the said research question.

3.1. Area of study

The researcher set out to investigate the effects of p2p file sharing on the UK music industry and the possible technical solutions that can be instituted by the concerned parties. The area of study was confined within UK companies dealing with music production, recording, publishing and distribution. The researcher therefore selected the EMI Music Company for the purpose of this study as it happened to be one of the worlds’ leading music company and home to some of the most successful and best known recording artists (Sean, 2004). All aspects of data pertaining past and present record sales including losses incurred by the Company due to filesharing were collected.

3.2. Research design

Usage of the quantitative research method was found to be most appropriate in studying the effects of p2p file sharing on the UK music industry since emphasis is laid on an intensive examination of the settings (Davies, 2007). Since this was a case study, the approach was used because it usually promotes an intensive and detailed examination of the case at hand (Davies, 2007). As a research method, it is used in many situations to increase knowledge of individual, group, organizational, social, political, and related phenomena as observed by Davies (2007). The conclusion of the dissertation demonstrated results of high reliability levels since all data was gathered through empirically correct research manipulations.

3.3. Target population

The focus group in this study was specifically composed of individuals found to have some interest in the music industry and had direct relevance to the research question being investigated. Employees of the EMI Music Company and members of the general public who were involved with the Company in one way or the other took part in the study. This sample of the population was subjected to interviews in order to collect primary information regarding various aspects of legal sanctions and their policies on handling copyright infringement. In addition, a well structured questionnaire was administered to managers in the marketing, distribution, sales and account departments respectively in order to collect appropriate data required in achieving the aims and objectives of the study.

The focus group was very inclusive by considering representation in terms of number and gender issues where ten respondents from each category of respondents were sampled. This brought together fifty (N=50) participants composed of both males and females in equal proportions where possible. Similarly, secondary data was collected by going through official documents of the sampled Company as well as using library sources dealing with the area of concern. Extensive review of various hardware and software was done in order to address the issue in present era.

3.4. Sampling technique

The target population was selected through stratified random sampling procedure for use in the collection of primary information. The researcher had pre-identified the EMI Music Company in UK from which the focus group was sourced. As earlier indicated, the target population comprised of forty managers and ten members of the general public concerned with the sale and distribution music records. The managers helped in extracting answers pertaining to the technological and legal assistance used to prevent illegal download of copyrighted music. Similarly, the researcher randomly consulted official documents particularly financial reports and policy documents of the sampled companies for the study. Finally, the researcher consulted library and other printed sources to support the primary sources.

3.5. Instrumentation

The research design employed in this dissertation was a simple survey design of a questionnaire constructed by the researcher by concentrating on the key issues outlined in the statement of the research problem. As already detailed from the outset, employment of library based research design of secondary information from multiple archival sources was exploited to compare and validate the primary sources of empirical materials (Davies, 2007). There is a rich source of secondary empirical materials available for any researcher conducting a survey in the area of social sciences. These sources are argued to be endowed with rich organisational information. The questionnaire was physically administered by the researcher to the focus group to complete and eventually returned for analysis alongside data obtained through secondary means.

3.6. Data collection

In this survey, primary data was collected from the focus group by use of the questionnaire technique. This information focused on achieving the aims and objectives of the study and in providing viable recommendations to the research problem under investigation. The survey instrument was thus distributed to the respondents by the researcher to complete and return for analysis. All of the participants were provided with a questionnaire each where the researcher sent out fifty questionnaires to be completed by both the Company employees and members of the general public. These included four sets of questionnaires each sent to the identified departments in the sample company and one set to the general public. In essence, this population was researched because it was made up of all the key stakeholders within the area of investigation. A cover letter of introduction was included with the questionnaire so as to let the respondents know what the research was attempting to accomplish and hence the significance of giving honest responses. The second round of data collection on the other hand sought to understand the company’s approach and analyse its components in order to provide a potential practice model for companies involved in the music industry. This mix of method was necessary to supplement each other and thus validate the data collected.

3.7. Statistical data analysis

It was fitting to rigorously analyse the data collected in consideration of the findings of the survey. The results of the questionnaire under exploration were first of all subjected to a rigorous statistical analysis as already mentioned using the computer program statistical package for social science (SPSS). This data evaluation was in line with the study objectives set earlier aiming to investigate the impact of filesharing on the UK music industry. Alongside data obtained from other secondary sources, it was used to analyze the impact of file sharing and the measures adopted to prevent illegal download of music online. All categorical items on the survey were completed using a 5-point scale format ranging from the minimum value (strongly disagree) to the maximum value (strongly agree). Items that did not receive a response were coded as missing values (Davies, 2007).

3.8. Reliability and validity

The reliability of the survey instrument was assessed by Cronbach’s alpha coefficients and those values above 0.7 were considered to have acceptable reliability (Davies, 2007). When checked against other such instruments used in research, reliability of the survey design used in this study might have been lacking probably because the questionnaire was constructed by the researcher and thus not standardized (Davies, 2007). Validity was found to be low just as is the case with most field researches.

3.9. Ethical consideration

The issue of confidentially was exhaustively addressed when carrying out this survey. It was addressed in the introductory letter by stating that information obtained was not to be divulged in any unauthorised manner (Davies, 2007). The questionnaire used also ensured the issue of anonymity to the respondents by signing the distributed consent forms. Secondly, the researcher made sure that the instrument was very gender sensitive and balanced between both sexes. Finally, the researcher made sure that all the print and audio media were used in accordance with copy right requirements in conducting the secondary research. There are no other issues as the research was mainly dealing with people who were conversant with the subject matter of the study.

4.0. Chapter summary

In this chapter, the rationale for the research approach has been clearly provided giving a vivid clarification of how the descriptive statistics will be applied to achieve the desired research goals of investigating all nuances of peer to peer filesharing in the UK music industry. The study has attempted to address the concepts of reliability and validity in this chapter. Similarly, the ethical considerations found resident in this study were also highlighted. The researcher thus went ahead to carry out an extensive data analysis as described in detail in the next chapter.

CHAPTER FOUR
RESULTS

4.0. Introduction

This chapter is concerned with the presentation of the descriptive data for the population sample studied in the primary research using the questionnaire instrument distributed by the researcher. In this section, the researcher presents the findings obtained from the focus group in the study. It is the researcher’s contention that the results obtained using the said research design are most reliable given that the focus group the survey set out to investigate was properly sampled.

4. 1. Descriptive data: Findings from the focus group

The findings indicate that the questionnaire instrument was completed by all focus group participants (N=50). The first question which had sixteen items was used to assess the general attitudes towards peer to peer file sharing. 57% of the respondents indicated that file sharing was significant in forcing music companies to cut on production and this variable was more important than anything else. It was closely followed by the fact that majority of the participants engaged in online file sharing on a regular basis at 46.6%. Moreover, a number of the respondents interviewed indicated that they preferred getting free music downloads from the internet at 45.9% which was a very significant percentage. The fact that filesharing was a result of technological advancement and the recording industry was losing money due to file sharing were both least important in contributing to the respondents’ attitudes towards the question under study. Most of them seemed to allude that the recording industry was losing money due to poor economy rather than as a result of file sharing (Alejandro, 2005).

The means and standard deviations of all the items in this variable are shown in Table 1 below. All the items were measured on the five-point scale from one to five on the survey instrument shown in the Appendix.

Table 1: Frequencies, Percentages, Means and Standard Deviations of General attitudes towards peer to peer filesharing variables (n = 50)

VariablesF%MeanS.D
Prefer free music downloads3445.94.000.93
Limited budget2533.83.040.79
Distributing unauthorized copyrighted material2837.83.190.84
A result of technological advancement2331.52.750.77
Engaged in online file sharing on a regular basis3446.64.030.95
Consider file sharing an innocent activity3141.93.300.89
Often use of peer-to-peer file sharing software3344.63.430.92
File sharing changing user’s livelihood for worse2533.83.040.79
File sharing forcing music companies to cut on production4256.84.200.98
File sharing forcing music companies to lay off employees3445.94.000.93
File sharing helps in marketing the music industry2939.73.300.89
Recording industry losing money due to file sharing2331.12.600.76
Decrease in sales of record labels due to file sharing2635.63.120.80
File sharing a threat to the recording industry3243.83.400.90
Use of free file sharing applications2432.92.800.77
Regulating file sharing

2839.43.300.89

KEY: S.D = Standard Deviation

F= Frequency

The mean of free music downloads, limited budget, distribution of unauthorized copyrighted material, a result of technological advancement, engaged in online file sharing on a regular basis, considering filesharing an innocent activity, using peer-to-peer filesharing software, filesharing changing user’s livelihood for worse, filesharing forcing music companies to cut on production, filesharing forcing music companies to lay off employees, filesharing helps in marketing the music industry, recording industry losing money due to filesharing, decrease in sales of record labels due to filesharing, filesharing a threat to the recording industry, use of free filesharing applications and regulating filesharing were 4.00, 3.04, 3.19, 2.75, 4.03, 3.30, 3.43, 3.04, 4.20, 4.00, 3.30, 2.60, 3.12, 3.40, 2.80 and 3.30 respectively.

The standard deviations for the same index were 0.93, 0.79, 0.84, 0.77, 0.95, 0.89, 0.92, 0.79, 0.98, 0.93, 0.89, 0.76, 0.80, 0.90, 0.77 and 0.89 respectively.

The results of this Table therefore reveal that all the sixteen variables have significant influence on the participants’ attitudes towards peer to peer filesharing. In line with results of other study findings, the table above confirms that filesharing has been instrumental in forcing music companies to lay off employees to minimize on operational losses supposedly occasioned by reduced record sales (Ethan, 2007). On reflection, the current researcher concludes that file sharing has been critical in marketing the music industry by allowing a number of new artists to become successful through the Internet. Felix & Koleman (2004) argue that a big majority of online perpetrators of peer to peer filesharing are ignorant of their actions as attested by the results showing 41.9% claiming innocence when filesharing. But these observations are negated by the results of Table 2 which indicate the legal implications associated with peer to peer filesharing.

Table 2: Frequencies, Percentages, Mean and Standard Deviations of participants’ interpretation of legal implications of peer to peer filesharing (n = 50)

VariablesF%MeanS.D
Holding P2P companies responsible39783.040.89
Government is successfully instituting legal sanctions on file sharing39783.040.89
Legal ramifications to curb losses31622.170.76
Illegal music downloaded with intent to sell34682.800.84
Illegal File Sharing Punishment32642.800.79
Stopping illegal file sharing all together38763.190.90

KEY: S.D = Standard Deviation

F = Frequency

The findings indicate that the entire focus group completed the questionnaire instrument on the legal implications of peer to peer filesharing. Approximately close to 78% of the respondents indicated that it was more meaningful to hold P2P companies responsible for illegal filesharing on their networks rather than individual users and that they believe the government is successfully instituting legal sanctions on file sharing (Wally, 2004). This aspect was closely followed by strong beliefs that illegal filesharing should be stopped all together, scoring a significant 76%. This was followed by arguments that there were no significant foreseeable legal ramifications that could curb losses to the music industry occasioned by filesharing in line with observations made by Stephen (2007). This was at 62% closely in the heels of participants’ feelings that it was not necessary to punish perpetrators of illegal filesharing.

The mean for holding P2P company’s responsible, legal ramifications to curb losses, illegal music download with intent to sell, punishment and stopping illegal file sharing all together were 3.04, 3.04, 2.17, 2.80, 280 and 3.19 respectively. The standard deviations for the same indexes were 0.89, 0.89, 0.76, 0.84, 0.79 and 0.90 Table 2 reveals that the five variables are significant in influencing the participants’ informed interpretations of legal implications associated with peer to peer filesharing. The sample in this study seems to suggest that the variable on stopping illegal file sharing all together is the most significant in influencing the participants’ interpretations. But generally, all the five variables were seen as interrelated in this study.

Moreover, the researcher sought to understand how the participants characterised theirviews on possible technical solutions that could minimize the impacts of peer to peer filesharing. It emerged that 44.7% of them felt that fining internet users for sharing music on the Internet would be most deterrent to the habitual perpetrators. Another 40.8% of them insisted that they would rather support the suggestion that the identities of repeat offenders of illegal filesharing should be disclosed as a measure to curb the aggression (Frans, 2008). This feeling was similarly reiterated by literature review indicating that P2P file-sharing users wouldn’t want to be openly identified. These result findings found in the study are shown in Table 3 below.

Table 3: Characterization of participants’ view on possible technical solutions to the impacts of peer to peer filesharing

VariablesF

Response Rate %

Allowing the music industry to enter into a collective licensing agreement with ISPs8

15.5

Individual users pay a fee for unrestricted access to any P2P file-sharing software for music download5

10.7

Unrestricted use of P2P file-sharing technology would promote record sales worldwide4

9.7

Increased number of P2P file-sharing users would bring more money in fees to the music industry9

16.5

Fining internet users for sharing music on the internet would deter them22

44.7

Blocking Internet access for repeat offenders of illegal file sharing is a viable solution13

26.2

Disclosing the identities of repeat offenders of illegal file sharing21

40.8

Formally warning those illegally downloading files will be a viable solution2

2.9

Results in Table 3 reveal that there were large differences in factors influencingparticipant’s views on possible technical solutions to the impacts of peer to peer filesharing. This differentiation was seen to vary from participant to participant with the least significant variable being that indicating formal warning through writing to those illegally downloading files was likely to become a viable solution. Likewise, the same argument was supported by result findings in the study where 44.7% of the respondents indicated that they strongly believed that fining Internet users for sharing music amongst themselves would be most deterrent as observed by Peter (2008). It must be re-emphasised that blocking Internet access for repeat offenders of illegal filesharing as a viable solution was significant to a number of respondents participating in the study. 26.2% of them sustained this argument and were strongly supported by 16.5% who underscored the importance of increasing the number of P2P file-sharing users in bringing more money in fees to the music industry (Stephen, 2007). It is additionally upheld by 15.5% who believed that allowing the music industry to enter into a collective licensing agreement with ISPs was a realistic technical solution to the peer to peer filesharing problem. Even though not the least significant, 10.7% of the focus group supported the suggestion that individual users be allowed to pay a flat fee for unrestricted access to any P2P file-sharing software for downloading music as noted by Shuman (2002).

4.2. Chapter Summary

This chapter has succinctly presented the results from the questionnaire sections handled by the EMI Music Company and the general public. The chapter has thus attempted to address the general attitudes towards peer to peer filesharing as well as the legal implications associated with peer to peer filesharing. The issue of possible technical solutions that can be initiated to arrest the problem has been clearly highlighted. The discussions and implications of these results are presented in the next chapter.

CHAPTER FIVE
DISCUSSION, SUMMARY, IMPLICATION AND CONCLUSION

5.0. Introduction

This is the final chapter of this dissertation and is divided into four sections. The first section handles a brief discussion of the results presented in chapter four. The second section presents a short summary of the study findings. In the third section, the author gives the recommendations that should be adopted for future research in this area. The final section presents the conclusions of the study.

5.1. Discussion of the results

The study suggests that there exists a vast discrepancy between the general attitudes held by different individuals towards peer to peer filesharing in the UK. However, these ways are found to be not so much diverse since most of the interviewed respondents demonstrated that there were similar behavioural patterns across music companies in the UK. Demographic factors to begin with play a crucial role in participants’ perceptions of their individual alienations towards peer to peer filesharing. Those aged between eighteen to twenty nine years are reportedly popular with free music downloads with about half of them blaming limited budget for their inclination (Liebowitz, 2006). They similarly demonstrated their often use of peer-to-peer file sharing software in exchanging files amongst themselves. A common attitude concerning music downloading among members of this group was that of ‘why should one pay for something when they can get it for free?’ in line with similar observations made by Klaus, 2005).

As far as the legal implications of peer to peer filesharing is concerned, there seemed to be a divide with the majority feeling that the legal burden should be placed on the P2P companies for filesharing on their networks at 78%. These results were in line with other study findings by Britz (2002) who observed that about 49% of people believed P2P companies should be blamed with only 18% viewing individual file sharers as the culprits. Those in the younger age cohorts (18-29) reported that they fully supported filesharing even if it is illegal (Gribble et al, 2002). They indicated that they partook file sharing with impunity regardless of the repercussions involved when asked how often they downloaded music. This feeling was further supported by respondents in the current study who indicated that fining and disclosing the identities of repeat offenders of illegal filesharing on the internet may effectively deter them from the vice.

5.2. Summary of the results

From the study findings presented in chapter four above, it emerged that the act of file sharing is widespread across all age groups in the UK. The practice was found mostly amongst the younger age group ranging between 18 and 29 years who are reported to be deeply entrenched in the act. This is represented by about 37.8% of them having distributed unauthorized copyrighted material to their peers regardless of the inherent legal implications. It is similarly illustrated that this category of users applied a number of P2P technologies when downloading music from the Internet as attested by 44.6% of the participants. It is also indicated that the use of peer to peer filesharing is attributable to the current technological advancement observed in recent times (Alejandro, 2005).

In the views of Phillips (2010), a lot has been done by both the government and music companies in controlling and regulating peer to peer filesharing as attested by study findings. 78% of the focus group in this study believed that the government had instituted legal sanctions on file sharing and scored a very significant value. Moreover, the numerous cases that have been concluded in courts regarding music pirating are a testimony of the government’s commitment in arresting the peer to peer filesharing problem. For instance, the successful conviction of the four owners of the world’s most high-profile filesharing website for breaking copyright law is a case in point as noted by Sean (2004). The Pirate Bay website was severely punished by the presiding court to act as an example to others with similar intentions. The study finally found that several technological solutions suggested by the government and music companies were acceptable by a big percentage of the respondents. It is only about one third of the suggested solutions that were rated as insignificant by the focus group in the study.

5.3. Practical implications and recommendation for future research

In regards to the consideration of the current macro environment, it is clear that the economic downturn is affecting consumer spending power and is stipulated to continue further into the decade. Studies show that since the start of the economic crisis late in 2007, numerous job losses have been witnessed with deteriorating consumer confidence being reported (Sean, 2008). This has fundamentally affected the music industry with a substantial proportion considering it a luxury and hence not a necessity. The researcher has therefore found it necessary to put certain recommendations in place for future research. From the outset, it is the researcher’s views that more research should revolve primarily around the technological solutions that can be instituted to minimize if not arrest the problems associated with peer to peer filesharing. Future research should therefore concentrate on discovering solutions that are more amiable to both the music industry and the Internet user.

Secondly, the findings of this study further recommends that something must be done to avert the current growing animosity between the government, music industry and the illegal Internet users over the status of peer to peer filesharing. Available research findings indicate that over 60 percent of people downloading music across the globe do it because of a limited budget (Stephen, 2007). If the economic situation in the world is improved, it is the researcher’s contention that this move would be instrumental in minimizing the number of music downloads due to a limited budget. Moreover, it is the suggestion of the current author to institute more research in the area of peer to peer filesharing in a view to dealing with this problem once and for all.

5.4. Conclusions

One thing that becomes apparent after reviewing previous studies on the effects of peer to peer filesharing is the absence of research work into technological solutions as observed by Stephanos & Spinellis (2004). The existing knowledge gap does not propose viable mechanisms for both the music industry and Internet Service Providers (ISPs) to enter into a collective licensing agreement that would help them solve their impasse. In the observations made by Frans (2008), the current research proposes the passing of a flat fee to be paid by individual users to have unrestricted access to any available P2P file-sharing software in order to download music. Similarly, fining and disclosing the identities of repeat offenders of illegal filesharing has been found to be a more viable solution as noted in this study.

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