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The Impact of File Sharing

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Introduction The aim of this coursework is to try to define the how the innovation of file sharing technology will affect the future of the music industry. In this project I will present a number of different responses to this innovation which have taken place and I will give my opinion on what I consider the most suitable way to respond to change so a company can gain competitive advantage through this innovation. For this coursework a have used a number of different primary and secondary sources. I have consulted recent news based on responses to file sharing innovation from different newsgroups (Reuters, Europa Press, etc) and I have looked for reports from analysts specialized in Internet and communication. As primary source, I have sent e-mails to Mark Mulligan - specialist analysts of Jupiter MMXI (analysts) -, a couple of music groups and Napster from which I only received a response from Napster (Appendix 1). In addition, I have carried out a survey to find out how many people use file sharing web sites and what they consider as the main reason for using these sites and how they think the cost of music varies this (see appendix 3). ...read more.


Even though the quality of the program code of Napster is very poor, it is tremendously efficient and definitely cheaper and quicker than buying CDs. How the music industry is affected by file sharing At present, most recording companies are having a mass movement against the new technology as most of them have decided to sue companies such as Napster, FastTrack or KaZaA which use the file sharing technology to provide music to their users. It is less often, that companies do accept the innovation and decide to become part of the innovation like worldwide computer giant Intel or British recording company EMI have done. The British company EMI have decided to be an active part in the innovation and have decided to offer a selection of videos from its Priority Records label through the Gnutella network. This is not the first initiative of EMI in collaboration with file trading sites, earlier this year, EMI already promoted its Radiohead album through the Aimster and Angry Coffee file trading networks. EMI doesn't loose money through the free videos offered as the files come with embedded links to online record outlets and advertisers, for example, Lil' Romeo's "My Baby" video was viewed by over 400000 users and 15 percent of those clicked onto an e-commerce site where they could purchase the album. ...read more.


Probably, the number of users which would use this service would be much greater to that of customers who buy CDs, Cassettes or Minidisk albums. The only solution if the recording and motion picture industry don't accept any agreement would be to do a massive, worldwide campaign to stop block, like with Napster, all the file swapping networks in the world, but probably others would appear. I think that the musicians and artists in general would not mind to loose some money from the sales of their albums if they were listened more hence increasing the value of their live concerts, musical DVDs or VHS and their presences in different public acts. To sum up, I think that the innovation of file sharing over the internet will affect the future of the music industry greatly. The way in which it affects it will depend greatly in the interest the recording companies have in applying the technology or simply stopping the technology. I hope that the music and film industry is more flexible to change as the application of new technology as it would not only reduce the price of music but it would increase the commodity of getting to the music as you would be able to receive it in your own house. ...read more.

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