Mon, Nov 01, 2004 - Page 11 News List

File-sharing hurts local music labels

TAKING OVER Peer-to-peer file-sharing software has changed the way music lovers acquire new albums or songs, resulting in music labels and stores losing money

By Jessie Ho  /  STAFF REPORTER

Two customers yesterday listen to CDs while browsing the selection in a Taipei record store, despite the fact that many modern music lovers have given up buying CDs in favor of downloading their music off the Internet, using peer-to-peer file-sharing software.

PHOTO: GEORGE TSORNG, TAIPEI TIMES

When was the last time you walked into a record store to buy a CD?

"About a year ago, I guess," said Ellen Hsu (許曉婷), a music lover who used to squeeze into jam-packed record stores to get the albums she likes.

With over 500 CDs in her personal collection, Hsu still hums songs from the latest albums, but she gets most of these songs via peer-to-peer (P2P) file-sharing software with a few clicks on the computer screen.

"I barely set foot in record stores now ? even when I visit the stores, I merely check on song titles instead of buying," she said.

Like Hsu, millions of music fans all over the world have transformed their music-listening behavior since P2P file-sharing software appeared in recent years, which is considered by the recording industry as a major factor affecting their sales.

The nation's largest file-sharing company, kuro.com.tw (飛行網), charges its customers NT$99 a month for unlimited swapping of music files with other members via the platform. Kuro currently has 250,000 members, and the figure once reached 500,000.

In contrast, the record-sales figures have taken a substantial dive in recent years.

In Taiwan, the recording industry production value peaked in 1997 at NT$10.64 billion, but has declined ever since and slumped to NT$4.49 billion last year, according to statistics compiled by the International Federation of the Phonographic Industry (IFPI) in Taiwan, which represents 11 record labels in the nation.

The recording industry in Taiwan has been suing the file-sharing companies to drive them out of business in recent years. IFPI Taiwan filed lawsuits against Kuro and its smaller rival Ezpeer.com.tw last year. The copyright holders group launched campaigns to educate the public and also lobbied lawmakers to outlaw the companies.

But even if the record labels are granted their wish, will consumers go back to record stores again?

"I don't think so ... consumers have become accustomed to digital music," said Brenda Foung (馮淑惠), new media manager at Warner Music Taiwan.

The recording industry claimed a victory in shutting down Napster, a pioneer Internet song file sharer in the US three years ago, but Napster's collapse didn't halt the file-sharing trend. P2P software and online downloading have emerged as the mainstream when acquiring new songs.

Major labels in the US have so far sued 6,191 music fans since September last year for allegedly using P2P services to share copyrighted music. But a recent study showed that traffic on P2P networks has never declined.

"P2P traffic represents a significant amount of Internet traffic and is likely to continue to grow in the future," a study conducted by researchers from the University of California at Riverside and the Coop-erative Association for Internet Data Analysis found.

Another study, though disputed due to its methodology, indicated that "file sharing has only had a limited effect on record sales." The study, conducted by researchers at Harvard University and the University of North Carolina and released in March, said that, "while downloads occur on a vast scale, most users are likely individuals who would not have bought the album even in the absence of file sharing."

Instead of groaning over their losses, some recording companies have come up with new strategies to promote copyrighted CDs. Some of them launched more signature drives and concerts, while others moved to enclose more value-added products with CDs, or encrypt CDs so they can't be replicated like normal CDs can.

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