P2P and the E-Music Industry Research Proposal

(Kajuter, Baumgartner & Van, 2001, p. 37) (Hansen, Matthews, Mosconi & Sankaran, 2001, p. 33)

Business 2 Consumer (B2C)

The realistic and optimal development of the current e-music industry is the shift from illegitimate P2P exchanges to B2C exchanges that allow the artists, support systems and entire communities which rely on revenue from legitimate sales to ensure recovery of investment and potential profit. The potential for such a transition, which could ultimately reduce B2B and "middle-man" sales revenue must be balanced with other solutions but could be the ultimate saving grace of the music industry, the evolving multifaceted system of exchanges and challenges. (Dennis, Fenech & Merrilees, 2004, p. 2) Like was said in the previous section, B2C exchanges should be based largely on the technology that has driven B2B technology advances that attempt to ensure ease of use for both exchanging entities and still provide adequate security for both the businesses and the information. (Leamer & Storper, 2001, p. 641)

Peer 2 Peer (P2P)

Currently, the pirate marketplace dwarfs the legal marketplace, and when that happens, that means investment in new music is compromised. Several years ago it was believed by the e-music industry and others that the illegal downloading user frequently sought the download venue as an introduction to the media and then subsequently went out and purchased a legitimate copy. (Mann, 2000, p. v39-4244) This is clearly no longer the case as technological advances have created a system that provides almost identical services, to consumers either legitimately or illegitimately and has been able to keep pace or advance anti-piracy technology such as encoding. What we do know is that piracy is on the rise and is not likely to slow down any time soon, despite the dire need for such to occur. P2P and single song downloads have in fact changed the face of the music industry, making it a place where users prefer single mixes to whole purchased CDs and artists, and their many support persons are having to completely change the manner in which they make and market their art. ("Your Message Must Fit," 2005, p. 2) (Leighton & Muldner, 2005, p. 295) (Brown et al., 2007, p. 120)

An expert on P2P file sharing, and a self styled user of such systems Gillespie, writes in 2001 of the fact that even the legitimate technology purveyors, who by the way are tremendously protective of their own software and hardware technologies are pandering to the P2P, illegal market, by making it very simple to utilize their technology to get and disseminate illegal downloads. Case in point, the i-Mac with i-Tunes, which didn't even sport a keyboard.

The subtitle was the grabber: "The new iMac with iTunes CD-RW. Take your favorite songs, put them in the order you want and burn a CD. After all, it's your music." No kid in his or her right mind wants to rearrange their own CDs. They already have them. What they want to do is use Napster, Gnutella, Bearshare, or iMesh to find and trade mp3s of songs and create totally new CD arrangements for personal amusement or dance re-mixes for parties. Apple knows this is how kids will use this technology, but an ad suggesting buying a Mac to rip off the music industry is not a real good idea in these litigious times. (Gillespie, 2001, p. 16)

Despite the "encoding" of the advertising the user is fully aware when he or she purchases the product that the intention of it are to utilize illegitimate sources for pleasure, and that the ads are written with legal council in mind. In short anti-piracy technology and intentions simply cannot keep up with the reality of ease of use and the technology industry giving consumers the ability to utilize illegal P2P and other sources without censure.

The evolution of P2P marketing much take the shape of legitimate utilization, which realistically increases awareness and availability of new and emerging artists as well as further developing the availability of global music and genres. (Lemley & Reese, 2004, p. 1345) (Madison, 2004, p. 1525) (Catalano, 2003, p. 98) Sadly, some groups and individuals see any attempt to curtail internet piracy as an assault on the "free" exchange system of the internet. (Lessig, 2001, p. 56) Realistically, those who stress the need to disseminate new artists materials as well as make users aware of the existence of "new to them" global or international options for listening would be removing the future potential of these same artist making a living in the future, if they did not also balance information availability with fair market distribution.The Marketing Mix

Price

The dissemination of legitimate, frequently B2C or P2P systems for music sharing, at very reasonable prices, the most common being about a dollar makes media downloads accessible to anyone seeking it. ("Tech-Tock: Is Time Up," 2005, p. D04) This leaves little in the way of excuses for utilizing services which curtail providing any resources to artists or those who support the music industry. Many may like to see high earning executives and others who are seen as unfairly riding the shirt or skirt tails of artists, but again this change in the industry might be seen simply with a greater emphasis on B2C and legitimate P2P downloads, and should not ever be used as an excuse for illegal downloading. (Hogge, 2006, p. 68)

Product

B2C and legitimate P2P exchanges will obviously provide a quality product, as the risk of downloading unsupported media and/or poor quality "bootlegged" files is reduced exponentially and while some users are willing to take this chance in a piracy situation (because they have expended no cash) none are willing to risk it in a paid venue. It is for this reason that product quality is ensured by user enforcers as well as legitimate business monitoring of the system at large and by complaint. Users will likely find more available services as well as greater ensured quality from legitimate systems than otherwise. (Benkler, 2004, p. 273)

Promotion

Marketing can be a shared experience, as artists, executives, business and legitimate P2P systems market new and emerging downloads, via their first logical availability, i.e. legitimate and legal release date. The speed at with downloads are available is a promotable component of the system that will ensure development of legitimate sources, as it has illegitimate. (Gillespie, 2001, p. 16) Promotion can be multimedia and should stress the fact that legitimate sources are the goal of all producers and artists.

Place

The Recording Industry Association of America the RIAA works to protect intellectual property rights worldwide and the First Amendment rights of artists; conducts consumer, industry and technical research; and monitors and reviews state and federal laws, regulations and policies. The Recording Industry Association of America (RIAA) is the trade group that represents the U.S. recording industry. Its mission is to foster a business and legal climate that supports and promotes our members' creative and financial vitality. Its members are the record companies that comprise the most vibrant national music industry in the world. RIAA members create, manufacture and/or distribute approximately 90% of all legitimate sound recordings produced and sold in the United States. In support of this mission, the RIAA works to protect intellectual property rights worldwide and the First Amendment rights of artists; conducts consumer, industry and technical research; and monitors and reviews state and federal laws, regulations and policies. (Gervais, 2001, p. 1363) the RIAA will likely contribute significantly to the development of a system that meets all needs and must be heeded with sincerity by all involved, including consumers, most of which will in the future be legitimate. The Recording Industry Association of America (RIAA) is located at 1025 F. ST N.W., 10th Floor, Washington, D.C. 20004. You can also contact RIAA at (202) [HIDDEN]

The Internet has now surpassed EDI technology with greater flexibility and relatively low costs.

Customer Value and the Value Chain

Customer Value

Promotion and other issues must interject ton the e-music industry to ensure that customers see the value in using legitimate sources, rather than illegally pirating music and other media. The limitations of illegal services must begin to show through and the nature and gravity of the theft must be enforced but more importantly the development of revenue producing systems that ensure industry investment and meet the customers broad expectations is essential. The customer must be persuaded to believe that supporting legitimate sources f music will both ensure the long-term viability of the industry and not doing so will in fact erode the current and future industry. Customer must understand that the value of using supported and legitimate systems far outweighs any perceived savings incurred from piracy. The industry must allow the customer a voice, but not full wielding power over the product offerings, as is currently occurring with the P2P illegitimate systems. (Abram & Hawkes, 2003, p. 32)

Value Chain Implications

The direct impact of e-commerce technologies on supply chain performance is not clear, and….....