Napster to Blame?

Up until the introduction of Napster record companies in the USA were expecting a huge growth in record sales. Sales figures from 1997-99 showed ever increasing demand for music and gross profit was high. David Blackburn discusses how music sales have declined ever since the introduction of MPEG's audio file (Mp3) and the creation of Napster.

The Figures

From this graph alone, I can see straight away the impact that Napster seems to have had on Record Sales. Napster is the only thing, technology wise, that was new in 1999 that allowed music sharing across the Internet.

I have know doubt from this report that file sharing and piracy have caused this decline in record sales. iTunes didn't come into being until 2

003 and there was a gap of 4 years where there was a demand but no company to fill it.

Is File Sharing All Bad?

I agree with Blackburn's statement that some unknown artists can benefit from the exposure of pirate music.

"Artists who are unknown can benefit from the awareness created by the spread of their music to a greater extent than ex ante well-known artists can, and similarly are less likely to lose sales to downloads, as they start with less sales."

This is very true. We cannot just dismiss the Internet as bad for business. Some artists do benefit.

References:

Blackburn, D. (2004). Online piracy and record music sales. Retrieved March 24, 2011, from http://74.125.155.132/scholar?q=cache:Uf80rgj9dnQJ:scholar.google.com/+Online+piracy+and+record+music+sales+blackburn&hl=en&as_sdt=0,5