September 28, 2000

Downloading Free Music

Main Report

Section 1: A summer of copyright battles

Since our first online music report was released on June 8, 2000, arguments over the place of copyright protections on digital music have raged in court, in Congress, and in the press. The fundamental issue is whether Internet users should be allowed the unfettered ability to share music files created in the MP3 format or whether those who created and own the rights to the music can win the sanction of the courts to shut down file-sharing systems such as Napster. This struggle over digitized music files sets the stage for equally momentous battles  over ownership rights and consumer access to digitized movies, books, games, and computer applications. (For a discussion of the basics of MP3 technology and the way the Napster community functions, please see the sections in our previous report titled “MP3’s and the Tools for Downloading Music” and “Napster.”.)

The first major resolution in the copyright fight came when MP3.com, a firm whose Web site allowed Internet users to access a vast online music library, settled copyright infringement suits this summer with Warner Music Group, BMG Entertainment, EMI, and Sony Music Entertainment. In return for the right to make songs from those labels available online, MP3.com has reportedly paid as much as $80 million. Most recently, MP3.com lost a copyright-infringement suit to Universal Music Group and may be slapped with damages totaling up to $250 million. The case is on appeal. Despite its legal troubles, the online music company has promised to re-open access to the popular Instant Listening service within the next few weeks. This service allows users to copy a CD to the company’s database and have immediate access to it through a password protected folder on the company’s website. Certain CDs (called Digital Automatic Music) purchased from MP3.com are available to be added to Instant Listening folders, and CDs from major record labels can be added, but not yet listened to, pending further negotiations between MP3.com and third parties. Currently, the MP3.com website allows users to download music, buy CDs, access subscription music channels and music-related information and recommendations.

On July 28, Napster staved off a preliminary injunction sought by the Recording Industry Association of America, a trade association of major record labels. The injunction would have required Napster to remove all copyrighted material owned by RIAA members from its system. Such an injunction would have effectively shut down Napster’s service to millions of Internet users.

Media attention and word-of-mouth have driven huge numbers of Internet users to the Napster and MP3.com sites as their legal struggles played out. Media Metrix, a firm that tracks use of Web sites, reports that the use of the Napster song-swap application is the fastest growing application it has ever tracked on the Web. MP3.com now reports hosting over 500,000 music files and, according to our estimates, Napster users have about 1.5 billion music files in circulation.

On October 2, attorneys for Napster and the RIAA will present oral arguments on the preliminary injunction in front of the 9th U.S. Circuit Court of Appeals, after which the three-judge panel may make a ruling at any time. This hearing will address only the request of the RIAA for a preliminary injunction against Napster that would close the service while the full legal case is heard. The full trial on the RIAA charges against Napster is not expected to take place until 2001.

The Napster controversy has prompted diverse interest groups to file friend-of-the-court briefs on both sides of the case. Librarians, free speech advocates, and doctors have backed Napster, concerned that a decision against the service could result in the suppression of all kinds of speech on the Internet. The Motion Picture Association of America, the NBA and the Commissioner of Baseball, among others, have sided with the music industry. Their brief contends that a ruling in favor of Napster could cause them to lose control of their rights to photo and video products. The Clinton Administration also chimed in by backing the RIAA on a technical issue. Clinton’s Justice Department opposed Napster’s argument that computers should be considered home recording devices similar to tape recorders and VCRs, which are protected from claims of copyright violation. The Department argued that allowing Napster to shelter itself behind the protection granted by the Audio Home Recording Act would encourage a massive level of reproduction and distribution of copyrighted works on a scale far behind what Congress had envisioned when it first allowed VCR users to make tapes of movies.

The federal government’s position on the copyright controversy came under fire just this week. Free-speech advocates claimed that a Web site sponsored by the U.S. Department of Justice and the Information Technology Association of America promoted what they called an “anti-Napster” viewpoint on downloading music online (http://www.cybercitizenship.org/). The site is funded, in part, by the RIAA and aims to teach parents and children about cyberethics.

Section 2: Most don’t think downloading music is stealing

The basic RIAA argument is that record labels and, in some cases, recording artists own the rights to their music and those who download music online without paying for it are swiping intellectual property protected by copyright. “Just like a carpenter who crafts a table gets to decide whether to keep it, sell it or give it away, shouldn’t we have the same options?” said Lars Ulrich, drummer in the band Metallica “My band authored the music which is Napster’s lifeblood. We should decide what happens to it, not Napster – a company with no rights in our recordings, which never invested a penny in Metallica’s music or had anything to do with its creation. The choice has been taken away from us.”

Those who download music beg to disagree, according to the Pew Internet Project survey. They are a unique segment of the Internet population – about 22% of Internet users say they have downloaded music – and a substantial majority of them do not believe they are stealing. Most express scant concern whether the music they are downloading is protected by copyright. More than three-quarters of all music downloaders (78%) say that what they’re doing isn’t stealing. Sixty-one percent of music downloaders say they don’t care if the music they capture online is copyrighted, and just 31% say that is a concern for them.

While music downloaders are the most likely to be indifferent to copyright laws, the recording industry hasn’t convinced the wider Internet audience or the general population of the virtues of its arguments. Fifty-three percent of all Internet users say downloading music is not stealing, compared to 31% who believe it is stealing. In the general population (Internet users and nonusers alike), opinions are more closely divided, but a substantial number of Americans say they don’t care to take a side. Forty percent of all Americans say that people who download music off the Internet aren’t doing anything wrong, 35% say downloaders are stealing, and 25% don’t take a position.

In the general population, young, affluent, and highly educated people are the most likely to back the argument that those who download free music online aren’t doing anything wrong. Sixty-four percent of all Americans between age 18 and 29 think downloading music is just fine, compared to 43% of all those between ages 30 and 49, and 28% of 50-64 year-olds. Forty-seven percent of those in the general public whose household income exceeds $75,000 per year say that downloading music is not stealing, compared to 37% of people in households making less than $30,000. And 45% of college graduates are in the pro-downloading camp, compared to 25% of Americans who have not completed high school.

Furthermore, it appears that the percentage of Internet users’ who believe downloading music is not a crime could grow over time. Young Americans who are not currently online are the most likely to say they want to get Internet access and the most likely to say that downloading music is not stealing. Some 65% of those under age 30 who do not have Internet access now say they want to get it. Of this group, 52% say downloading music is not a crime, compared to a mere 22% of non-Internet users over 30 who say that.

Section 3: Buying habits

Fully 79% of those who download music get the files off the Web for free. Some 15% say they pay for it at the time they access the files. Still, music downloaders aren’t all incorrigible scofflaws – most (69%) say that at least on occasion they end up purchasing music they have downloaded. At the same time, the vast majority of music downloaders also say they do not frequently go out and purchase the music they initially got for free on the Internet. Twenty-one percent of music downloaders say that “most of the time” they ended up buying CDs or cassettes of the music they got online. Men are more likely than women to say this – 26% compared to 15% of women. Twenty-nine percent of music downloaders say they eventually bought the music “some of the time.” Nineteen percent say they have bought a CD or cassette of music they sampled online “only a few times.” Twenty-six percent of music downloaders say they have “never” bought the music they downloaded. Women are more likely than men to say they never buy a hard copy of the music – 33% of women say this, compared to 20% of men. However, women are more likely than men to download music that they already own on CD or tape.

Section 4: More favorites than new songs

So far, the availability of MP3 files is less a boon to new artists than to established, familiar artists. Eighty-six percent of music downloaders have captured music they had heard before, by artists they were already familiar with. And 69% of music downloaders had searched for new music by artists they were already familiar with. Still, there are encouraging signs that online posting and marketing of music can work for new artists. Thirty-one percent of music downloaders had loaded songs onto their computers by an artist they had never heard before.

Twenty-eight percent of music downloaders say captured music that they already own in another form (CD or tape) and 63% downloaded new music. This is a marked change from our June 2000 report, in which 13% of music downloaders said they captured music they already owned and 81% downloaded new music. Since the demographics of music downloaders have not shifted significantly in the last few months, it is possible that their behavior has changed. Music downloaders may be using services like Napster to expand their music collections and replace the music they own on old cassette tapes with new digital versions of the same material. Or, there is another possibility for this increase in the number of people reporting they have downloaded music they already owned in another form. More respondents may be giving what they perceive to be a legally safer answer to a question about the type of songs they download.

Section 5: Short playlists, not comprehensive catalogs

Music downloaders aren’t filling their hard drives with gigabytes of music, as some copyright advocates may fear. Sixty-three percent of music downloaders say they have saved 25 or fewer songs to their hard drives. Twenty-nine percent of music downloaders have saved more than 25 songs. This is not surprising since the vast majority of users connect to the Internet using a slow-speed modem. It can take hours to download a single MP3 file over a dial-up connection, because even though MP3 files are compressed versions of the music, they are still huge files by Internet standards. On the other hand, people who download free new music tend to save more songs to their hard drives, with 34% saying that they have more than 25 songs saved.

The number of files on the average Napster user’s computer is considerably bigger. And the number of files on that average Napster user’s hard drive has been steadily increasing since our June 2000 report. At that time, we used frequent spot checks to calculate that there were approximately 100 songs in a typical user’s library. In the hours prior to and just after the July 28 legal showdown, our observation of the per-user number of songs rose to 110. In recent weeks, further spot checks have shown that the number now averages 140 songs per user library. Napster claimed it had 20 million users in a July press release, and news media  and industry reports have cited Napster user numbers varying from 5 million to 30 million. Our data shows approximately 11 million Napster users, and combined with our observations of songs per user, we estimate that there could be about 1.5 billion songs in circulation on Napster users’ computers.

Section 6: The listening public

The percentage of Internet users who enjoy music online has held steady since April and there’s been no significant change in their behavior. Thirty-seven percent of Internet users (or about 35 million Americans) have ever listened to or downloaded music on the Internet. Twenty-two percent of Internet users (or about 21 million Americans) have downloaded music files onto their computer so they can play them any time they want.

When asked which of three services they use for accessing music files, 69% of music downloaders said they have used Napster, MP3.com, or both. Just 7% had used Gnutella, a file-searching program that is not operated by a company and is often cited as a probable haven for music downloaders if their access to Napster and MP3.com is curtailed.

To read our previous report on music downloading, go to: http://www.pewinternet.org/Reports/2000/13-Million-Americans-Freeload-Music-on-the-Internet.aspx