Economic Impact Of File Sharing Essay

4281 words - 18 pages

The year is 1969, and the United States remains gripped by Cold War paranoia of an imminent Russian nuclear attack. In the event of an attack, communication to other cities would be among the first casualties, and backup routes would need to be established. This fear was the catalyst for early Internet research funding, and ultimately resulted in the theory of packet switching – the basis for all Internet connections. Charley Kline, a UCLA student programmer, sent the first packets as he attempted to connect to the Stanford Research Institute on October 29th, 1969. The system crashed as he reached the ‘G’ in ‘Login’.
Fast-forward a two decades to a period when the public was only barely ...view middle of the document...

The Internet, however, unlike anything the world has ever seen. What choice does society have than to apply its real life set of governances to this new virtual world? This is the critical dilemma that the entertainment industry and policy makers are now wrestling with. As the Internet quickly grows and develops in ways that many could never dream, society has been refining a set of rules that simply are incompatible with this new virtual economy.
The incompatibilities of the Internet and society’s governances have come to a breaking point. Congress currently prepares a monumental bill, the Stop Online Piracy Act (SOPA), the more costly and expansive version of its Senate counterpart, the Protect IP Act (PIPA), which both aim to address Online Piracy, and could forever change the landscape of the Internet. SOPA and PIPA are the culminations of arguments that have defined the position of the RIAA, large corporations and production companies that claim billions in lost revenues from copyright infringement. In the 2010 federal shutdown of the largest P2P file-sharing network, LimeWire, the RIAA sued for damages that reached into the trillions, based on fines of up to $150,000 per song downloaded. What many of these institutions neglect to recognize, is the possibility that file sharing and online piracy are, in fact, beneficial to both the economy, and individual artists. In the following essay, I will outline the arguments of both sides, and with data from case studies, federal economic reports, and the current SOPA and PIPA Bills, argue in support of the claim that the positive effects of Piracy and P2P File Sharing networks far outweigh the supposed harm caused. I will highlight cultural differences between policymaking in the United States compared to that of the Swiss Government, and explain how such varying prioritization of consumer welfare presents arguably insurmountable obstacles for U.S. policymakers to overcome.
A central argument in favor of the claim that piracy has an overall positive societal benefit is the idea that artists actually benefit from file sharing networks. File Sharing is in many ways free advertising. Increased exposure from networks such as LimeWire, MediaFire, PirateBay, or Youtube-to-MP3 converters have created a free market system that substantially lowers barriers to entry created by multi-billion dollar record labels. There is no longer only one channel through which artists can be discovered, and this defines the loss of control that record companies are so frustrated with. The average consumer views this ‘war on piracy’ as a war, only because rich and powerful corporations, driven by profit, are the only ones with the available resources to kick up so much dust, and silence the up-and-comers who actually benefit from file sharing. Evidence to support this claim is everywhere. Many argue that file sharing is in many ways, the up-and-coming artist’s record label.
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