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Online Piracy

The following information was obtained from the Recording Industry Association of America (RIAA). Be sure to visit their web site.

What is Online Piracy?

Music theft is a real, ongoing and evolving challenge. Both the volume of music acquired illegally without paying for it and the resulting drop in revenues are staggering. Digital sales, while on the rise, are not making up the difference.

Common Examples of Online Copyright Infringement:

  • You make an MP3 copy of a song because the CD you bought expressly permits you to do so. But then you put your MP3 copy on the Internet,  using a file-sharing network, so that millions of other people can download it.
  • Even if you don’t illegally offer recordings to others, you join a   file-sharing network and download unauthorized copies of all the copyrighted music you want for free from the computers of other network members.
  • In order to gain access to copyrighted music on the computers of other network members, you pay a fee to join a file-sharing network that isn’t authorized to distribute or make copies of copyrighted music. Then you download unauthorized copies of all the music you want.
  • You transfer copyrighted music using an instant messenging service.
  • You have a computer with a CD burner, which you use to burn copies of music you have downloaded onto writable CDs for all of your friends.
  • Somebody you don’t even know e-mails you a copy of a copyrighted song and then you turn around and e-mail copies to all of your friends.

Who Music Theft Hurts

It’s commonly known as “piracy,” but that’s too benign of a term to adequately describe the toll that music theft takes on the enormous cast of industry players working behind the scenes to bring music to your ears. That cast includes songwriters, recording artists, audio engineers, computer technicians, talent scouts and marketing specialists, producers, publishers and countless others.

While downloading one song may not feel that serious of a crime, the accumulative impact of millions of songs downloaded illegally – and without any compensation to all the people who helped to create that song and bring it to fans – is devastating.  One credible study by the Institute for Policy Innovation pegs the annual harm at $12.5 billion dollars in losses to the U.S. economy as well as more than 70,000 lost jobs and $2 billion in lost wages to American workers.

Scope Of The Problem

While industry revenues from digital formats continue to grow, surpassing $4 billion for the first time in 2012, and reaching nearly 4.4 billion in 2013 while accounting for 64% of industry revenues, digital music theft has been a major factor behind the decline in sales over the past 15 years. And although use of peer-to-peer sites has flattened during recent years, other forms of digital theft have emerged, including unauthorized digital storage lockers used to distribute copyrighted music, streamripping programs, and mobile applications that enable digital content theft.

Consider these staggering statistics:

  • Since peer-to-peer (p2p) file-sharing site Napster emerged in 1999, music sales in the U.S. have dropped 53 percent, from $14.6 billion to $7.0 billion in 2013.
  • From 2004 through 2009 alone, approximately 30 billion songs were illegally downloaded on file-sharing networks.
  • NPD reports that only 37 percent of music acquired by U.S. consumers in 2009 was paid for.
  • Digital storage locker downloads constitute 7 percent of all Internet traffic, while 91 percent of the links found on them were for copyrighted material, and 10 percent of those links were to music specifically, according to a 2011 Envisional study.

The music industry, while enormous in its economic, cultural and personal impact, is by business standards relatively small.  So theft on this scale has a noticeable and devastating impact: employment at the major U.S. music companies has declined by thousands of workers, and artist rosters have been significantly cut back.  The successful partnership between a music label and a global superstar – and the revenue generated – finances the investment in discovering, developing and promoting the next new artist. Without that revolving door of investment and revenue, the ability to bring the next generation of artists to the marketplace is diminished – as is the incentive for the aspiring artist to make music a full time professional career.

Why We Do What We Do

The single most effective anti-piracy strategy is to help build a thriving legal marketplace.  That’s always been the industry’s number one priority.  Our goal with every anti-piracy effort is to protect the ability of the music business to invest in new bands and new music and, in the digital arena, to give legal online services space to continue to prosper.  But we also believe compelling legal ways to enjoy music often need to be complimented by educational programs and selective legal efforts when rogue businesses ignore the law and attempt to profit on the backs of music creators.

Has it made a difference?  Think about this way:  had the music industry sat idly by and refused to enforce its rights against the sites that profited from facilitating theft, would there even BE a legal music marketplace today?  Would the interests of artists, songwriters, labels and others be better served if illegal sites like Audiogalaxy, Aimster, Kazaa, Grokster, Morpheus, and countless others were still thriving?  Or if a fog of misunderstanding about the relevant copyright laws persisted among fans who were unaware that they were breaking the law by illegally downloading music or that there were great legal alternatives available?

Some background: prior to the lawsuits, only 35 percent of people knew file-sharing was illegal, but after the initiation of the end-user legal campaign, that number quickly rocketed to more than 70 percent.  In 2003 and 2004, we saw double digit growth in the numbers of people using peer-to-peer to download music illegally.  If awareness of the copyright laws and an appreciation of the consequences of getting caught for breaking the law had not had an effect, p2p growth rates would likely have continued unabated, and would have seriously undermined the potential for a legal digital marketplace.  Instead, according to NPD, between 2006 and 2009, the percent of Internet users downloading music illegally declined from 19 to 14 percent, while the percentage engaging in legal music downloading grew from 16 to 20 percent.  Where there was virtually no legal digital market in 2003, today the legal digital market exceeds $3 billion annually and boasts more than 400 licensed music services worldwide.

The music business’ efforts to innovate and license new models, educate fans about the law and enforce rights where necessary have made a profound difference in shaping today’s music landscape.  Illegal file-sharing rates have now stabilized: the share of users who download legally has surpassed the share of users who download illegally.  The “lines” have crossed and that’s an important marker in the development of a legal marketplace.  Because that’s what this is ultimately all about – helping provide the framework for a dynamic, exciting, content-rich marketplace that is rewarding for both fans as well as the music community.  The good news?  That marketplace is here.

We’re realistic and by no means declaring victory.  There continues to be paralyzing levels of illegal downloading that require a variety of approaches and the help of partners like Internet service providers (ISPs).  That’s why we send copyright notices to educate and notify downloaders in advance that they are breaking the law and could face more serious consequences.  And we continue to bring legal action against individuals behind illegal music sites that operate with downright disregard for the value of music and artists’ rights in order to line their own pockets, with the shuttering of p2p site LimeWire as the most recent example.  Each part of the process matters and we are committed to making sure fans have the best music experience possible.

The Law

Unauthorized Copying is Against the Law

Copyright law protects the value of creative work. When you make unauthorized copies of someone’s creative work, you are taking something of value from the owner without his or her permission.  Most likely, you’ve seen the FBI warning about unauthorized copying at the beginning of a movie DVD.  Though you may not find these messages on all compact discs or music you’ve downloaded from the Internet, the same laws apply.  Federal law provides severe civil and criminal penalties for the unauthorized reproduction, distribution, rental or digital transmission of copyrighted sound recordings. (Title 17, United States Code, Sections 501 and 506).

What the Law Says and What it Means

Making unauthorized copies of copyrighted music recordings is against the law and may subject you to civil and criminal liability. A civil law suit could hold you responsible for thousands of dollars in damages. Criminal charges may leave you with a felony record, accompanied by up to five years of jail time and fines up to $250,000. You may find this surprising. After all, compact discs may be easily be copied multiple times with inexpensive CD-R burning technology. Further, when you’re on the Internet, digital information can seem to be as free as air. U.S. copyright law does in fact provide full protection of sound recordings, whether they exist in the form of physical CD’s or digital files. Regardless of the format at issue, the same basic principle applies: music sound recordings may not be copied or distributed without the permission of the owner.

What the Courts Have to Say

A long series of court rulings has made it very clear that uploading and downloading copyrighted music without permission on P2P networks constitutes infringement and could be a crime.

Common Examples of Online Copyright Infringement:

  • You make an MP3 copy of a song because the CD you bought expressly permits you to do so. But then you put your MP3 copy on the Internet, using a file-sharing network, so that millions of other people can download it.
  • Even if you don’t illegally offer recordings to others, you join a file-sharing network and download unauthorized copies of all the copyrighted music you want for free from the computers of other network members.
  • In order to gain access to copyrighted music on the computers of other network members, you pay a fee to join a file-sharing network that isn’t authorized to distribute or make copies of copyrighted music. Then you download unauthorized copies of all the music you want.
  • You transfer copyrighted music using an instant messenging service.
  • You have a computer with a CD burner, which you use to burn copies of music you have downloaded onto writable CDs for all of your friends.
  • Somebody you don’t even know e-mails you a copy of a copyrighted song and then you turn around and e-mail copies to all of your friends.

Do The Crime, Do The Time
If you do not have legal permission, and you go ahead and copy or distribute copyrighted music anyway, you can be prosecuted in criminal court and/or sued for damages in civil court.

  • Criminal penalties for first-time offenders can be as high as five years in prison and $250,000 in fines.
  • Civil penalties can run into many thousands of dollars in damages and legal fees. The minimum penalty is $750 per song.

The “No Electronic Theft Law” (NET Act) is similar on copyright violations that involve digital recordings:

  • Criminal penalties can run up to five years in prison and/or $250,000 in fines,  even if you didn’t do it for monetary or financial or commercial gain.
  • If you did expect something in return, even if it just involves swapping your files for someone else’s, as in MP3 trading, you can be sentenced to as much as five years in prison.
  • Regardless of whether you expected to profit, you’re still liable in civil court for damages and lost profits of the copyright holder.
  • Or the copyright holders can sue you for up to $150,000 in statutory damages for each of their copyrighted works that you illegally copy or distribute.

If you make digital copies of copyrighted music on your computer available to anyone through the Internet without the permission of the copyright holder,  you’re stealing. And if you allow a P2P file-sharing network to use part of your computer’s hard drive to store copyrighted recordings that anyone can access and download, you’re on the wrong side of the law.

Having the hardware to make unauthorized music recordings doesn’t give you the right to steal. Music has value for the artist and for everyone who works in the industry.

What the Courts Have to Say About Illegal Uploading and Downloading…
…and Copyrighted Sound Recordings:

“As stated by Record Company Plaintiffs in their brief, “Aimster predicates its entire service upon furnishing a 'road map' for users to find, copy, and distribute copyrighted music.” …We agree. Defendants [Aimster] manage to do everything but actually steal the music off the store shelf and hand it to Aimster's users.”
Aimster Copyright Litigation. 01-C-8933, MDL # 1425 (Memorandum Opinion and Order, September 4, 2002).

“…they [Aimster] apparently believe that the ongoing, massive, and unauthorized distribution and copying of Record Company Plaintiffs' copyrighted works by Aimster's end users somehow constitutes “personal use.’ This contention is specious and unsupported by the very case on which Defendants rely.” 
Aimster Copyright Litigation. 01-C-8933, MDL # 1425 (Memorandum Opinion and Order, September 4, 2002).

“Napster users infringe at least two of the copyright holders’ exclusive rights . . . .Napster users who upload file names to the search index for others to copy violate plaintiffs’ distribution rights. Napster users who download files containing copyrighted music violate plaintiffs’ reproduction rights….[V]irtually all Napster users engage in the unauthorized downloading or uploading of copyrighted music . . .”
A & M Records v. Napster,  Inc., 239 F.3d 1004 (9th Cir. 2001).

“Although defendant [MP3.com] seeks to portray its service as the ‘functional equivalent’ of storing its subscribers’ CDs, in actuality defendant is re-playing for the subscribers converted versions of the recording it copied,  without authorization, from plaintiffs’ copyrighted CDs. On its face, this makes out a presumptive case of infringement under the Copyright Act . . .  .”
UMG Recordings, Inc. v. MP3.com, Inc., 92 F. Supp. 2d 349 (S.D.N.Y.  2000).

…and Copyrighted Images:
“Distributing unlawful copies of a copyrighted work violates the copyright owner’s distribution right and, as a result, constitutes copyright infringement. . . . . [Unlawful distribution occurs where] [f]iles of [copyrighted] information are stored in the central system, and subscribers may either ‘download’ information into their[computers]  or ‘upload’ information from their home units into the central files . . . .” 
Playboy Enterprises v. Russ Hardenburgh, Inc., 982 F. Supp. 503 (N.D.  Ohio 1997).

“[The Copyright Act] provides that an owner of a copyrighted work has the exclusive right to reproduce the work in copies . . . [and] to distribute copies of the work to the public . . . . [A]nyone who violates any of the exclusive rights of the copyright owner … is an infringer of the copyright.” 
Playboy Enterprises v. Webbworld Inc., 991 F. Supp. 543 (N.D. Tex.  1997).

…and Copyrighted Software:
“Uploading is copying.  Downloading is also copying. Unauthorized copying is an unauthorized use that is governed by the copyright laws. Therefore, unauthorized uploading and unauthorized downloading are unauthorized uses governed by the copyright laws .  . . .”
Ohio v. Perry, 83 Ohio St. 3d 41, 697 N.E.2d 624 (Ohio 1998).

“The unauthorized copying of copyrighted computer programs is . . . an infringement of the copyright . . . . [U]nauthorized copies . . . are made when such games are uploaded to the BBS [Bulletin Board Service] . . . [and] when they are downloaded to make additional copies by users . . . .”
Sega Enterprises v. MAPHIA, 857 F. Supp. 679 (N.D. Cal. 1994).

“‘[C]opying,’ for the purposes of copyright law, occurs when a computer program is transferred from a permanent storage device to a computer's random access memory. In this case, copies were made when the Sega game files were uploaded to or downloaded from [the defendant’s] BBS [Bulletin Board Service].” 
Sega Enterprises. v. Sabella, 1996 U.S. Dist. LEXIS 20470 (N.D. Cal.  1996).

…and Copyrighted Text:
“Defendant Free Republic is a ‘bulletin board’ website whose members use the site to post news articles to which they add remarks or commentary . . . . The Plaintiffs' [Los Angeles Times and Washington Post] complaint alleges that unauthorized copying and posting of the articles on the Free Republic site constitutes copyright infringement . . .  . [P]laintiffs' motion for summary adjudication with respect to fair use is granted . . . .”
L.A. Times v. Free Republic, 2000 U.S. Dist. LEXIS 5669 (C.D. Cal. 2000).

“When a person browses a website, and by so doing displays the [copyrighted]  Handbook, a copy of the Handbook is made in the computer's random access memory (RAM), to permit viewing of the material. And in making a copy, even a temporary one, the person who browsed infringes the copyright. Additionally, a person making a printout or re-posting a copy of the Handbook on another website would infringe plaintiff's copyright.”
Intellectual Reserve, Inc. v. Utah Lighthouse Ministry, Inc., 75 F. Supp. 2d 1290 (D. Utah 1999).

When It Comes to Copying Music, What’s Okay …  And What’s Not:

Technology has made digital copying easier than ever. But just because advances in technology make it possible to copy music doesn’t mean it’s legal to do so. Here are tips on how to enjoy the music while respecting rights of others in the digital world. Stick with these, and you’ll be doing right by the people who created the music.

Internet Copying

  • It’s okay to download music from sites authorized by the owners of the copyrighted music, whether or not such sites charge a fee.
  • Visit our Legal Music Sites for a list of a number legal and safe sites where permission is granted and content is available for downloading.
  • It’s never okay to download unauthorized music from pirate sites (web or FTP) or peer-to-peer systems. Examples of peer-to-peer systems making unauthorized music available for download include: Ares, BitTorrent, Gnutella, Limewire, and Morpheus.
  • It’s never okay to make unauthorized copies of music available to others (that is, uploading music) on peer-to-peer systems.

Copying CDs

  • It’s okay to copy music onto an analog cassette, but not for commercial purposes.
  • It’s also okay to copy music onto special Audio CD-R’s, mini-discs, and digital tapes (because royalties have been paid on them) – but, again, not for commercial purposes.
  • Beyond that, there’s no legal “right” to copy the copyrighted music on a CD onto a CD-R. However, burning a copy of CD onto a CD-R, or transferring a copy onto your computer hard drive or your portable music player, won’t usually raise concerns so long as:
    • The copy is made from an authorized original CD that you legitimately own
    • The copy is just for your personal use. It’s not a personal use – in fact,  it’s illegal – to give away the copy or lend it to others for copying.
  • The owners of copyrighted music have the right to use protection technology to allow or prevent copying.
  • Remember, it’s never okay to sell or make commercial use of a copy that you make.

Are there occasionally exceptions to these rules? Sure. A “garage” or unsigned band might want you to download its own music; but, bands that own their own music are free to make it available legally by licensing it. And,  remember that there are lots of authorized sites where music can be downloaded for free. Better to be safe than sorry – don’t assume that downloading or burning is legal just because technology makes it possible.

Enjoy the music. By doing the right thing, you’ll be doing your part to make sure that the music keeps coming.

* This information is intended to educate consumers about the issues associated with the downloading, uploading and consumer copying of music. It is not intended to offer legal advice or be a comprehensive guide to copyright law and the commercial uses of music.

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