Peer to Peer and the Music Industry: The Criminalization of Sharing – An OII Policy Seminar

The period from the advent of the compact disc in 1982 to the first significant file-sharing system in 1999 saw the greatest period of profitability in the history of recorded music. The decade since 1999 has seen an equally radical collapse. What seems obvious in hindsight was largely ignored at the time. The very efficiency of digital reproduction and distribution promised or threatened to eliminate scarcity, and hence threaten the possibility of market exchange in informational goods.

Markets require regulation and a market in informational goods requires the suspension of the free circulation of information. This has been attempted by technical means (surveillance and encryption); legal means (in prosecutions for copyright infringement); and by cultural means (the attempt to persuade people that file-sharing is impossible, immoral, un-cool or dangerous).

These interlinked strategies have failed. This talk examines these technical, legal and cultural strategies and their failure. In the context of such failure it is worthwhile looking at alternative business models. Where free culture is a way of life, it can also be shown to be a more effective condition for making a living, at least for performing artists, if not for today’s major record labels.

The five traditional ‘functions’ of the established recording industry (production, manufacture, promotion, distribution and rights management) are no longer best performed through the centralized model of the major label. Whilst once at the cutting edge of what Castells called the capitalist perestroika of an emergent network society; today’s informational monopolies (of which record companies are just one example), hierarchical and bureaucratic to their core, appear more like late-Soviet monoliths when set against a digital multitude that innovates and circulates past, through and beyond them.