The possibility of a copyright infringement suit from the Recording
Industry Association of America is apparently having a chilling effect on
individuals who swap online music, according to new research from The NPD
Group.
The market research firm said households acquiring music files online illegally reached a
high of 14.5 million in April of 2003, but that the number dropped off to
12.7 million households in May, followed by another drop to 10.4 million
households in June.
The drop appears to coincide with the RIAA’s legal campaign to not only
clamp down on music file trading by targeting ISPs, colleges and corporate
networks, but to also target individual file-swappers with lawsuits.
“Today, file sharing is the most popular method of digital music
acquisition,” said Russ Crupnick, vice president of The NPD Group. “While we
can’t say categorically that the RIAA’s legal efforts are the sole cause for
the reduction in file acquisition, it appears to be more than just a natural
seasonal decline.”
Crupnick told internetnews.com that the research firm, which has
been tracking the online music market for two years, found the decrease in
the past few months is sharper than the declines it has tracked in the
offline retail world.
“When we see the drop like we saw [recently] in file acquisition from the
digital world, it sends up a red flag that is not explained by normal
seasonality, such as people going to summer camp, or fewer [music]
releases,” he said. “In addition, because the initial drop followed
well-publicized legal efforts, there’s evidence to show that the RIAA’s
tactics may be having their desired impact on reducing file sharing among
consumers.”
In April, a federal court ruled that ISPs such as Verizon have to release
to the RIAA names of subscribers who are suspected of trading files. Verizon
is appealing the ruling, while other ISPs such as SBC are waging a legal
battle to stop the RIAA from enforcing a similar subpoena.
Just this week, U.S. Sen. Norm Coleman (R-Minn.) released
information he requested from the RIAA that showed it has issued more than
1,000 subpoenas to individuals as part of its legal fight against illegal
file-swapping.
Coleman’s request to the RIAA expressed concern over whether the
association might be abusing the broad-based subpoena authority under the
Digital Millennium Copyright Act (DMCA) to unfairly target consumers who are
“innocent or unknowingly guilty of violating copyright infringement laws.”
As federal lawmakers move to look into cases involving ISPs being forced
to turn over the names and addresses of their customers to the RIAA, and with the
RIAA no less determined to stop illegal copying of
copyrighted material, NPD officials say their data show the uncertain
atmosphere over liability has chilled the thrill for some file-swappers.
“In fact, we know that it’s really only about 5 or 6 percent of all the
file traders who download and swap about half of all the files online,”
added Crupnick. “But as an individual, you don’t know whether 20 downloaded
files or 2,500 is a lot because you don’t have that baseline.”
Anecdotal evidence is also starting to pile up about parents of teenagers
snooping over their children’s shoulders as they use their computers — and
either cleaning out music files or shutting down their ability to swap,
Crupnick noted.
Using an online panel of 40,000 consumers to help compile the data, NPD’s
MusicWatch Digital division also found that total music files acquired per
month also dropped from a high of 852 million files in April to 655 million
files in June. Conversely, among those consumers who continue to download
files, the average number of music files acquired actually increased from 59
in April to 63 in June.
Crupnick said NPD’s data suggests that the RIAA’s legal tactics have had
more of an effect on the attitudes and actions of lighter downloaders.
“A near-term decline in file acquisition should hearten music industry
executives, because the bulk of this activity can be ascribed to illegal P2P
sites,” he said. “However, it will be interesting to see in the future if
these numbers turn upward again, as new paid online music services begin to
break through.”
