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An executive summary for managers and executive readers can be found at the end of this article.
Introduction
"Even as we continue to transform ourselves and transition to the digital marketplace, the music community is still suffering enormously from the impact of various forms of music theft", said Mitch Bainwol, Chairman and CEO of the RIAA. "One of the stories we need to repeatedly tell in the coming months is that illegal downloading and burning continue to compromise the industry's ability to invest in the new bands of tomorrow" (RIAA, www.ria.com).
In recent years, file-sharing networks such as Kazaa, Grokster, EDonkey, and Bit-Torrent, among others have become popular channels to obtain "free" music ([30] Knopper, 2004; [26] Helm, 2005). The internet has irreversibly changed the business model in the music industry ([27] Hiatt and Serpick, 2007). Of particular importance is how the internet has given rise to a ubiquitous activity called downloading as referenced above by the quote from the RIAA (Recording Industry Association of America). Although such downloading can be used for obtaining data, audio or video files, the downloading of music files (aka MP3s) has made the internet a remarkable, and virtually invisible, way of illegally taking title to music without purchasing it.
In the analog era, music could be recorded to tape using a purchased or loaned copy of the music. This process was cumbersome and degraded signal quality as the transfer was made from the source to the copy. In contrast in the digital era, downloading MP3's over the internet is relatively easy, and there is no appreciable loss in quality of downloaded files for most listeners. Fast internet connections, underground peer-to-peer (P2P) networks, and inexpensive digital storage have accelerated the participation in this activity.
The internet and digitization of music have forever altered the landscape regarding the illegal transfer of music from someone's computer to another and the violation of copyright laws. The sites listed above became the lingua franca for those interested in acquiring "free" copyrighted music by engaging in digital piracy (i.e. the illegal downloading of copyrighted MP3s ([26] Helm, 2005)). However, in the past two years, some of the sites have been compelled to prohibit such downloading due to legal rulings against them.
The concern for illegal...