The unauthorized downloading of a sound recording from an internet site or other is called online piracy (RIAA). Online piracy is a growing concern, with 5.16 billion unlicensed audio files downloaded in 2001 in the United States alone (Yankee Group).The recent string of lawsuits from music industry heavyweights further illustrates the significance of the issue and the impact it is having. Fueled by new technologies which simplify the process of "digital theft", many copyright holders have started to take action to protect their works.
According to Gliddon "big music companies are losing vast amounts of money through piracy". This is supported by the fact that the pirate music industry is valued at US$4.3 billion (ARIA). While this figure incorporates all forms of music piracy, online piracy is stilled claimed to be a significant contributor - the Recording Industry Association of America claim that internet piracy was one of the key factors responsible for the 5% drop in retail music sales in both 2000 and 2001 (Dignan). The claim is illustrated by the fact that retail music sales peaked in 1999 and then declined with the introduction of the first so-called peer-to-peer downloading service, Napster. The Yankee Group predicts these figures will grow, expecting 7.44 billion unlicensed audio files to be traded in 2005 before declining.
The recent advent of peer to peer (commonly abbreviated to P2P) technology on the internet, has unleashed a whole new realm of possibilities in terms of music distribution, but has made the piracy of such music a whole lot easier. The technology allows users to anonymously connect with millions of other users and share music and other types of files. Consumers flocked to P2P with Napster recording 60 million at its peak (CBS News). Since its release, P2P has attracted criticism, to the extent that Napster was shut down by a court ruling (Gliddon, 2001, p.60).
