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File sharing has proven to be a stubborn, persistent phenomenon and it seems to be here to stay. Even in Cuba, a vocal opposition to western lifestyle, official media broadcasted an unlicensed, illegally downloaded version of the movie Avatar, shortly after it opened in the US theaters Morozov The latest study conducted by the entertainment industry shows that the infringing bandwith use rose by Content was copied perfectly and cheaply, rights were not easily controlled and even the software the source code and the binaries was free.

This gave the users the freedom to tinker with code, creating new knowledge, encouraging innovation and culture of free access Lessig Online file sharing has been a controversial topic since the end of the 90s, when the creation of the MP format allowed audio files to be compressed reducing the parts of sound that fall outside the range of human hearing, thus not losing any perceptible quality.

In this way audio files became very small and started to appear on websites for free download. In MP3. A user would insert their own music CD12 into the computer, the service would then identify what the CD was, and if MP3. To be able to provide such service, the company purchased 50, CDs from a store Lessig The service made it easier for users to get access to the music they had purchased, it was not giving them free access. Its success was parallel to a drop in CD sales, which lead to the presumption that the service is driven by substitution of free online music for CD purchases LaRose et al.

To transfer the file to their computer, the users received the internet address of the host user, connected to it and downloaded a file in P2P fashion. Napster was not a true P2P service because it held a centralized index of all files, which users consulted to find requested information Carrier A year after its launch, the network was sharing three billion music files a month, even though a part of its success can be attributed to RIAA.

RIAA immediately filed a suit against Napster for enabling copyright violation. During the trial, Napster developed a filtering system that analyzed the files and identified copyright violation with a The courts shut down Napster, but first decentralized services, Gnutella in and Kazza in , took its place. From to , a number of popular BitTorrent services, designed as completely decentralized networks, were established, including ThePirateBay Larsson, Svensson, and Kaminski Users are still required to download software, but the software does no file indexing, there are no central servers and users rely only on their Internet connection, drive space and files they have.

BitTorrent enables file sharing trough torrent files. These files contain information that allows software to identify the file and a list of trackers associated with it. Trackers are servers that keep lists of other computers running the software which contain all or part of the relevant file Filby The search of files is conducted by Internet search engines or sites that index torrent files, such as ThePirateBay, Torrentz, KickassTorrents and others.

Once run, the torrent file gives information about the file to be downloaded, provides a list of trackers and orders the client to connect directly to computers that contain all or portions of the requested file. Clients on computers containing the file then break the file into packets and send it to the computer requesting the file. As soon as the client receives the packets he or she automatically seeds them to other users requesting the same file.

Moreover, in recent years torrent files on major indexing sites such as ThePirateBay, have been replaced with magnet links, which are mere lines of code and contain far less information than torrent files Filby With the rise of pure P2P networks, music industry lost its prey and began suing individual users13 and those alleged to be involved with maintenance of torrent indexing sites.

There have been several convictions, out of which the three founders of ThePirateBay received most attention. They were guilty of individually promoting law breaking, but the technology itself, ThePirateBay website, was declared legal under the Swedish law. Since the service itself was never found to be in violation of law, the site is still functional and regularly updated much as it has been for the most of the last decade Dawdy and Bonni ; Klose BitTorrent, though the most popular, is not the only technology available for digital media distribution.

Centralized file-hosting services, also known as file lockers and cyberlockers, such as 4shared, FilesTube, FileServe and others, are widespread among users. The most notable feature of this cloud storage and file sharing service is that all files are encrypted locally via JavaScript before they are uploaded — since Mega does not know the encryption keys to the uploaded files, the service cannot decrypt them and view the content.

Therefore, it cannot be responsible for the contents of uploaded files Wikipedia - Mega website a. The development of cloud based technology led to erasing the borders between private file hosting and file sharing, since all cloud services enable users to upload and share any kind of content. Some examples of cloud based file hosting services include DropBox. However, this kind of file sharing does not have a wide range like BitTorrent services, since the sharing usually takes place directly between a small number of users via links to certain content.

There are also unauthorized streaming services, commercial file-sharing sites15, social networks, search engines, forums and smart phone based applications Hongkiat. Rise in internet speed allowed users to broaden their file sharing practices to other forms of media files. Today, users share all kinds of media content, including movies, TV18 series, videos, games, books, magazines, etc.

Using the advanced compression techniques included in DivX19 codecs, users can reduce a DVD20 movie file from a file size of 4. Television programs are distributed over the Internet, with an average episode of around 45 minutes in length compressed to around MB. Computer and console games are pirated much like the movies. Nevertheless, most new games are designed for use over the Internet and the user is required to enter a unique code before being allowed to access the server, which is currently the strongest weapon against pirates.

It is not perfect though, since coders have been known to establish their own servers with unauthorized copies of the game, or to remove the activation procedure by patch distributed by coder Filby b. Books published on paper are transformed to digital format by scanning, using text recognition software and manual typing, while most of the new books are published in digital formats as well and sold in digital bookstores to be read on computers, tablets, mobile phones and e-ink readers.

This makes about 2,,, Internet users in the world. The number of users sharing media files is impossible to know, but the calculations are common and vary widely. BitTorrent reported having 40 million mobile users in over countries BitTorrent , added to million users in January TorrentFreak b , while Alexa, a website analyzer, puts ThePirateBay among the most visited sites on the planet, in the 77th place in the US and 12th place in Sweden Alexa His theory seems to be supported by the abovementioned Sandvine report — P2P sharing is decreasing, while Netflix and YouTube traffic is on the rise Sandvine Also, the two seem to be inversed.

Areas with legal streaming and downloading services seem to be engaging in far less file sharing activities than those who have scarce legal alternatives. However, users are sharing legal content, too, majority of which are media files that fall under public domain, content that the authors want to give away and media released under Creative Commons license. They also sample content before purchasing it and discover new artists they like, and they share their own work with the world, most often reshaping preexisting content, forming a participatory culture which Lessig refers to as remix.

This is corroborated by the fact that the most shared torrent of with an impressive 8. However, when statistics are looked at from a different angle, we can see that most illegally shared albums were copyright protected and commercially sold. Bruno Mars leads the chart with 5. Lessig argues that there are four different types of file sharing: downloading instead of purchasing, using file sharing to sample files before purchasing, using file sharing to access copyrighted content that is no longer sold and accessing content that is not copyrighted.

He then highlights that even though from the perspective of the law only the last group is clearly legal, from the perspective of economics, only the first group is actually harmful Lessig The truth is that these types of sharing usually overlap. Users also typically have different motives than commercial pirates who deliberately and consciously infringe copyrights to earn some money. This does not mean that P2P networks do not have commercial potential, since certain socio-demographic groups of file sharers might be attractive to advertisers Huygen et al.

The law empowers the authority to send warnings to identified infringers and transfer the case to court in cases of infringement being repeated three times within a period of one year. The authority monitors online infringement based on information submitted by rights holders and verifies identity with ISPs Penalties vary, but one of them includes account suspension for up to one month, which made the law controversial since some consider Internet access to be a human right.

Interestingly, Adami, the organization that collects royalties for musicians and represents their interests, declared that it is neutral towards the legislation, arguing that many artists are just not willing to sue their fans Bacache, Bourreau, and Moreau Still, a new study published this year, based on a large survey among 2 French Internet users, finds that the three strikes law did not stop or even reduce piracy, concluding that threatening to punish users does nothing to reduce copyright infringement Arnold et al.

The French government recently sanctioned a panel to investigate the effectiveness of the HADOPI law, concluding that the law failed to benefit authorized services as promised, and has also abolished the ultimate sanction of Internet disconnections for three time infringers TorrentFreak c; TorrentFreak b. If users continue to infringe after this, they can face a twelve month suspension of their Internet service.

Sweden Sweden implemented IPRED25 on April , allowing intellectual property rights holders to present their complaints in court, whenever they assumed that their rights had been violated online. Netherlands The Netherlands tells a different story. Uploading content is not allowed under the Dutch law without prior consent of the rights holder Huygen et al. Even so, in early , two ISPs blocked ThePirateBay, at the time the biggest unlicensed service in Netherlands, with the others following their move.

Around 6. Others Recent court case in Washington may prove to be a turning point for three strikes systems. A federal judge ruled that IP28 address evidence is insufficient and does not prove that an account holder is guilty of copyright infringement TorrentFreak d. The majority of examples listed above indicate that file sharing is declining, but as the result of legal compulsion and fear of punishment.

The entertainment industry is the one pushing the legislators to enforce stricter, bounded laws in an effort to eradicate online file sharing, which, despite limited successes, fails to happen. The reason behind this may lay in the fact that three strikes systems only cover P2P file sharing and none of the alternative ways people use to share files.

This leaves the option open for users to switch from monitored to unmonitored services, giving the impression that file sharing declined. What entertainment industry has managed to do, though, is influence search engines. Under the premise that search engines are major channels for consumers to access content and that many of them are linked to unauthorized sources and should therefore bear responsibility, the industry pressured Google to delete million links to infringing content.

The pioneers in the number of requests were British and American music distribution agencies, which together sought the removal of 74 million links. Despite the fact that Google now clears an average of more than 8 links every second, the US MPAA agency that deals with the protection of the video industry, still considers that, in terms of combating online file sharing, Google is not doing enough PoslovniPlus Similarly, Facebook also prevents its users from sharing links to file sharing sites Morozov As demonstrated, copyright laws are getting stricter in some countries which has, Svensson, Larsson and Kaminski argue in a series of academic articles, led to the increased use of online anonymity services Larsson, Svensson, and Kaminski ; Svensson, Larsson, and Kaminski ; Larsson and Svensson Svensson, Larsson and Kaminski conclude that people ignoring copyright online is due to the lack of social norms that reinforce the law — when the law lacks social equivalent, there are weak incentives for them to comply Svensson, Larsson, and Kaminski It regulated multiplication and distribution of published works, not the consumption.

Individual users were not affected by it and did not have to observe copyright rules in their behavior. The law captured attention during the last decade, following rapid development of digital and Internet technologies which allowed end users to become printers, publishers and vendors themselves. At that point, it became clear that, if people did not comply with the copyright law, it would become irrelevant Litman Society needed a copyright law, Litman claims, because publishers and distributors published and distributed work to make money.

The law was an incentive for them to invest in finding the authors and their works, and in printing, publishing, and distribution of that work to the end users. Modern technology changed that Litman Karaganis underlines that the history of copyright is mostly a history of struggles against market innovations, linked to the emergence of new technologies. Today, there is still a great deal of variation and uncertainty in the law regarding digital media consumption practices, including the legality of copying files, making backups and sharing and creating new content.

Intellectual property regulation in digital age involves a range of complexities and the reason for briefly addressing it in this thesis is the fact that it directly affects many facets of contemporary society, including culture and creation of new work, commercial and otherwise. Filby draws the parallel of Goliath — groups of entertainment industries with direct influence on lawmakers, and David — the wandering consumer who wants to access information produced by the industry without being encumbered by intellectual property restrictions Filby a.

Copyright was devised first and foremost with a public benefit in mind Collins It began as a regulation of the book trade in English Law: The Statute of Anne of was designed to protect books and other writings from unauthorized reprinting for 14 years from the first publication, renewable once. Most of the works were not copyrighted because the process of registration was extensive and time consuming — from to there were 13, published works, and only of those were copyrighted — the majority of creative culture was free, and even the protected part was protected only partially protected.

Today, things have changed — there are no registration requirements every creative act is automatically copyrighted and the current scope of copyright in America is the life span of Author plus 70 years. This term is the result of the prospective works not yet created and retrospective works created and still under copyright extension practice of the American Congress. In the first hundred years, Congress retrospectively extended the term for Copyright once, in the next fifty years it extended it once more.

In the last forty years, the copyright term has been retrospectively extended eleven times. The irony deepens when we know that Disney made millions off stories from public domain, but refuses to release his own work into it. Lessig also admits that copyright is critical part of the creative process: without it, there would be no incentive to create large budget films, for example. This is why there is a need for balance.

There are few historical examples. Cable TV was born from stealing the content of others and reselling it to customers, which is why copyright holders asked the Supreme Court twice to shut it down, and the Court refused both times. Cable TV, however, had to pay for the content it broadcasted, but copyright holders were not allowed to grant or deny the right to broadcast its content Lessig They failed, and today, the fact that tape recorders helped expand the market for the music is common knowledge Kretschmer, Klimis, and Wallis When Sony introduced VCRs34 to the market, the entertainment industry sued Sony, claiming that the technology was designed to enable stealing.

The Court added that the manufacturer should be liable only when a device was incapable of substantial no infringing uses Litman Several years later, it was precisely this technology that opened up new and significant revenue stream for film industry.

These examples are part of the constant strategy implemented by the entertainment industry: with the advent of new technology, they fight it rather than investigating its market potential and exploiting the technology to its own advantage. American Congress, on the other hand, finds a balance to assure that the new is protected from the old. When the Internet became a part of everyday life, many were afraid of the potential changes it carried. Behavior that was illegal or discouraged in the real life was suddenly made possible.

One of the most prominent examples is the rise of pornography. Congress did respond, and the response was, more or less — let us wait and see. They waited to see how the network will develop simultaneously trying to protect free speech values Lessig The pattern of deference to new technologies has changed with the rise of P2P file sharing.

Instead of striking a balance between the claims of new technology and the legitimate rights of content creators, the courts and Congress imposed restrictions to the new and protected the old Lessig The law, for the first time, made it illegal for individual consumers to gain unauthorized access to copies of technologically protected works, even copies they own.

Litman emphasizes that the copyright law was devised for print media and was, with some difficulties, expanded to filmed, taped and broadcasted media, but is not suitable for new, digital media Litman She adds that the copyright law focused on copy as the compensable and actionable unit because, at the time, copies were easy to find and easy to count, making them a useful benchmark for deciding when a copyright has been invaded.

We know that each appearance of any portion of any work in any computer makes a copy in the random access memory. This means, since there are no exceptions in the law for computer or Internet-based uses, that the copyright owner has the right to control, enjoin or collect money for every single appearance of a work in a memory of any computer anywhere Litman It also means that an average user, file- sharer or not, cannot spend an hour without colliding with the copyright law, at least in America35 Litman Without it, copyright, in a technical sense, becomes unreasonable.

It is unable to perform the function it grounds and increasingly becomes an exercise of force and the insistence on its own legitimacy Hull The project continued to this day, transforming itself into a digital library with about 20 million of scanned, searchable books. The judge dismissed the lawsuit that authors filed against Google, admitting that his clerks were using Google Books for research on the case NewYorkTimes On the other hand, Norway, a country also known for its rigid copyright rules, started a project of digitalizing hundreds of thousands of titles from Norway National Library, making them available to all owners of Norway IP addresses.

The copyrighted works will be available for viewing only, while works under public domain will be also available for download tportal. Lessig fears for the moral platform of future generations, because their ordinary behavior is deemed criminal and argues that criminalizing an entire generation is, regardless of the end, too high a price to pay Lessig Litman believes that people do not obey laws they do not believe in, not because they are protesting, but because it does not stick in their heads.

Litman adds that people do not believe in copyright law is because it does not make sense to them from the point of the individual end user Litman and calls for replacing the current law with a new set of rules which will be discussed at the end of this section. Secondly, these rules encourage the use of technological protections, most prominent being DRM36, to facilitate a pay-per-view, pay-per-use system, making users pay before they can even access any kind of content.

Digital rights management is a code-based regulation of content access designed to manage what consumers can do with the file they legally bought defined number of file openings per day, restricted usage, inability to transfer file to other media players and similar. It can take many forms, and it is divided in two categories, hard and soft.

Soft DRM takes the form of software and monitors the activity of the user. The software was indistinguishable from rootkit and it placed itself in a hidden area. Hard DRM is more common. It is usually encoded into content such as a music file, and is designed to restrict access to the file through the use of encryption.

If the user is provided with a key, the file will be temporarily decrypted and play normally. The key can be most commonly obtained by purchasing the file Filby There are two flaws to the system, Filby argues. The first one is the fact that it can be easily cracked, and the second one is that, while the decrypted content is played, it can be easily recorded, creating a DRM-free version of a file. The drawbacks of DRM have proved so many and so negative that the operators are frequently choosing to avoid it altogether Huygen et al.

Digital book industry adopted the system, taking advantage of its restrictions. Amazon sells most of its Kindle book editions DRM protected in order to be viewed only on their Kindle devices, Kobo does the same for their editions, Barnes and Noble for theirs. They are all forcing the users to use their products on their devices, restricting the use of a content that has been paid for. A paying user is no longer the owner of the content.

No longer can users buy a book, read a book countless times if they like, print it or move it from their e-book reader to their mobile phone. At least not in the digital world. He further emphasizes that, by converting the works from public domain into digital form, companies can recapture works whose copyrights have lapsed.

Lessig highlights that copyright law cannot protect ideas, it can only protect their expression Lessig He describes two opposing sides — a world of property, and a world of ideas, and claims that cyberspace is closer to the latter, while entertainment industry and lawmakers insist on the former. The opposing sides are yet to find an understanding, but Hull draws a parallel between this bickering and DRM.

He, however, does not approve and argues that a contract, in western society, demands two sides negotiating the terms of the contract, while DRM practice gives no power to an individual user. He also states that DRM is an effort to sidestep copyright regime altogether, and to end first sale doctrine38, replacing buying with the right to access a service in an effort to reinstate a regime of scarcity Hull Filby believes that DRM is a form of artificial control which regulates the Internet, allowing the entertainment industries to protect their outmoded ways of doing business and that it has potential to damage the progression of one of the most important technological revolutions in contemporary civilization Filby There are many other forms of controlling access to content on the Internet.

Some of the most common ones are implemented by cable companies, and they include filtering data, restricting access to certain type of content and restricting access to certain websites, which was discussed in section 2. Professor Patricia Aufderheide and Professor Peter Jaszi, in their book Reclaiming Fair Use: How to Put Balance Back in Copyright, argue that fair use doctrine gives enough room for legal use of copyrighted material, for both individual users and creating authors, without colliding with 37 Current Vice President of the United Stated 38 Copyright law states that after the first sale of a book, the copyright owner can no longer impose conditions on the disposition of a book.

They argue that big media companies and their trade associations, such as RIAA and MPAA are trying to scare users into thinking that ownership rights are more far reaching than they are. There are two types of fair use — the first one is the right of a user to do with a copyrighted material as they will for personal purposes39, and the second one is the right to reuse copyrighted material in the process of making new material. Fair use requires that copyrighted material is used for a different purpose, that the amount taken is appropriate and that the use is reasonable within the field or discipline it was made in.

Lessig mostly rejects fair use doctrine, resenting its vague definition — terms like different purpose, appropriate amount and reasonable use are too broad and susceptible to personal interpretation to be taken as a serious legal protection from copyright. He calls it a weak and complicated doctrine Lessig , disliking the fact that, if argued as a defense in case of a lawsuit, it takes time and money and it does not guarantee dismissing charges. Lessig proposes a few different solutions, claiming that there is a way to assure that artists are paid, without locking down content and turning regular citizens into felons, emphasizing that the choice is not between piracy and property Lessig In The future of Ideas he recommends that the government encourages the development of open code40 and that it ensures that no major player in the Internet space is able to create the space to empower its own strategic behavior, thus aiming for a system of sufficient control to give artists enough incentive to produce, while leaving free as much as it can for others to create.

He further advises that published work should be registered and protected for a term of five years, and that registration can be renewed fifteen times. He continues, suggesting that Congress empowers file sharing by a system of compulsory licenses, and that the fees should be set by a policy maker keen to striking a balance. He follows with an idea of authorizing private citizens to bring suits against false copyright claims. The idea is to leave copyright for as long as the works have value on the market, and to remove it when they no longer do.

He still insists on a simple, one click registration system fifty years after the work was published, in order to facilitate search for current copyright owners Lessig In Remix, several years later, he recommends a slightly different solution. Litman has a different idea.

She suggests that the lawmakers discard the old rules, or declare an individual user immune from them, and instead devise a new set of rules that preserves some incentives for copyright holders, makes sense from the point of individuals, is easy to learn and seems sensible and just to the people asking to obey them Litman She calls for a legal structure that ordinary individuals can learn, understand and regard as fair.

Litman suggests drawing a distinction between commercial and noncommercial uses, since it seems to be that the majority of users already believe that there is a legal difference, and giving the public a right to cite, since referring to a copyrighted work without authorization has been and should be legal.

She also believes that any adaptation should be accompanied by a truthful disclaimer and a citation, preferably with links to unaltered and easily accessible copy of the original. The public should be able to read, view and learn from authorized works, to extract facts and ideas from them, to make them their own, to build on them Litman Fisher again proposes a different model, a way around the current impasse of the Internet.

Under his plan, it would be legal to freely share, for example, music. Technology would sample who was getting what and upon that evidence of popularity, it would compensate artists through a tax that would be imposed upon digital technologies Lessig The results of the survey discussed in Section 6 indicate that the users are willing to pay certain amount of money, in exchange for the right to download content freely.

It was launched by Lessig in an attempt to allow people to give away or condition their copyright. Creative Commons creates a zone inside copyright ownership for owners who want to give their works away. All Creative Commons licenses impose some conditions, and some impose more than others.

The conditions people put on use of their work makes Creative Commons a copyright-light zone instead of a copyright-free zone. Majority of the licenses permit free derivates, but half of them also require that the derivates are released freely as well. The project has become widespread around the world over the years, but its main disadvantage is that it does not address to the mass commercial culture which is most often released under classic copyright.

They have brought us not only new content and new sharing and consuming experiences, but also new business models, known as sharing economies. Individual users started gathering around certain projects, forming a community contributing to the common good.

These sites did not and do not make money. The collision of sharing and commercial economies brought us hybrids, such as Craigslist, Flickr, YouTube, Last. Innovation is the most important factor in economic growth — it promises new business models and methods of entertainment, communication and commerce Carrier Copyright has an innovation problem Carrier ; Filby b; Lessig ; Lessig Court decisions, private enforcement and public dialogue seem to be ignoring innovation and overemphasizing the harms of copyright infringement.

The effect of copyright law and enforcement on innovation is missing from the debate. Entertainment industry is blocking the potential for innovation, by adding protections for existing interests. Entrepreneurs are reluctant to start new businesses which could be in collision with copyright law and Lessig fears that, if innovation is constantly stemmed, we will have much less vibrant culture and much less creativity.

There is no way of knowing how entertainment media would look and feel today, has there been no lawsuit against Napster, MP3. Filby calls for industries to focus their attention not on limiting the natural evolution being brought in digital age, but on recognizing that those they labeled as scurrilous pirates are actually a rich market which can be tapped into Filby b , while Lessig focuses on lawyers and academics, reminding them that it is their duty to change the law so it works Lessig He recognizes copyright as a critically important part of a healthy culture, but makes a plea to make it more balanced Lessig ; Lessig Real world practices should be allowed to flourish, rather than stifled under the influence exerted by the creative industries and their outdated models Filby Litman suggests seeking balance by asking both sides involved, reminding that, if there is a single set of rules applied to both film studios and high school students, the law should ask both sides for opinion, especially since there are far more high school students than movie studios.

Online anonymity is one of the consequences of fighting unauthorized file sharing, as outlined in the previous section. Anonymity, following the way the Internet was built, could be considered to be a normal state on the Internet. However, this trend is rapidly changing in the recent years, in large part because of copyright law — implementation of laws such as HADOPI in France requires establishing identity of a file sharer, which caused an increase in use of anonymity services.

There is also a risk of file sharing going underground, which could be the reason why some countries are taking a more cautious approach instead of introducing regulations similar to the French one Poort, Rutten, and Van Eijk What are the efficiencies? What is the content that otherwise would be unavailable?

Copyright rules have provided the foundation for our industry to reinvent itself in the digital world. Any suggestion of change should be based on rigorous evidence that there is in fact a problem. A weakening of copyright rules would set back the music industry at the very moment when it is on the path to recovery. As shown above, there is no consensus on the extremely complex issue of copyright. Trends differ from country to country and given the truly global nature of file sharing, which transcends geography and language, it could be that national regulations of file sharing can only have a limited success in fighting it.

However, this notion that policymakers need to foster, enable and encourage creativity might not be correct at all. Digital technologies, globalization and the Internet helped to rise and spread a culture of creativity — people create songs, write blogs, build web pages, upload videos, they contribute to Wikipedia and post on Facebook and Twitter. The Internet is filled with user generated content and the lines between users and creators, between consumers and producers are simply blurred.

In his book Copyrights and Copywrongs, Vaidhyanathan breaks down the conception of the creator as a solitary genius rotted in copyrights and shows how culture and tradition played an essential role in creating new media content by depiction on the tradition of blues, jazz, hip hop and rap Vaidhyanathan Guertin adds that all culture builds on the past, only the ability to create and re-create the culture around us was historically difficult, expensive and long lasting. In a digital age, more than any time before, we live in a remix culture Guertin New digital media and communication technologies enable audience participation in content production.

According to Lessig, mass media were RO41, while digital technology allows media to be both read and write. Lessig sees remix as an essential act of RW42creativity. Nothing is genuinely new. Culture, science and technology grow in layers; each new author builds on the works of those who came before. Every artist builds on the past and, consciously or unconsciously, refers to the existing culture.

The practice of mixing and remixing is well-established, especially in commercial media industry. Video games are building upon existing culture as well, especially trough sequels eg. While the practice of remakes and reboots is not as common in the book sector, sampling, mash-up and homage certainly are. Lessig highlights the illogical: if a user can quote lyrics from a Bob Dylan song in an essay in Vietnam, they should be able to quote a recording of Bob Dylan singing those lyrics in a video about the same war.

The act is the same, but the source is different and the norms governing those sources are very different Lessig Revitalizing media content from the past is one of the many ways sampling and collage help to refresh and reboot a shared popular culture, which is the main reason why they seem so natural to the users and why copyright industries have been unsuccessful in convincing people they are wrong McLeod The age of digital technology helped spread these practices from mainly commercial subjects to the everyday user — computer composers create mash-ups, they cut, copy, sample, remix and upload new media content every day.

Most of them remain unknown, but some find their way to larger audiences. Jay-Z released a-capella tracks to the world, challenging DJs to create new music from it. Danger Mouse published only three thousand copies, but the album spread on file sharing and media sharing networks and received praise from The New York Times, Rolling Stone and The New Yorker.

To legally use a sample, the rights in the recording and composition must be licensed. The fee is arbitrarily chosen by copyright owners, most usually record labels. License fees prohibit creative diversity and active cultural participation, creating monopoly over media and turning everyday users into lawbreakers. Everyday users use digital technology to remix the culture around them.

Consumers are no longer passive, they actively create and recreate the content around them, discovering and sharing new media content, new business models and new forms of participation and collaboration. They cannot afford to pay license fees for fragments of music and video content.

The defining feature of a mash-up genre is blending samples drawn from many artists into short spans. For example, Girl Talk, an American musician specializing in mashups and digital sampling, remixes between and samples from artists in a single CD. The license fees for this amount of material would be extremely high, if even obtainable, which makes mash-up a genre in which samples are, by definition, remixed without any permission from the original artists.

There is also criticism. The meaning in remixes most often comes from the reference itself, not from the content, and this meaning is expressible only if it is the original that gets used. It has an aura. It has a magic to it. However, two things should be recognized: first, that people use technology to express themselves — remix culture is valuable because it provides users with the freedom to express their ideas in whichever form they see fit; and second, that there are great remixes, such as those made by Danger Mouse and Girl Talk, which require extraordinary knowledge about a culture.

They are original and creative. Remix culture would not be possible without digital distribution power of file sharing networks. They provide material for artists and they also make it possible for these amateur artists and their creations to advertise and reach audiences without relying on big media corporations.

File sharing networks, together with social networks, provide an inexpensive way for independent artists to promote themselves. If file sharing networks were stopped, it would have serious and negative impact on many artists who are relying on P2P technologies to get their art heard and seen McLeod This is why protective intellectual property regulation poses a threat to new forms of creativity and to making new artwork in a remix culture.

All of the creations from remix culture, be it music remixes, video mash-ups, altered images or something else, are technically illegal. It can be argued that a large portion of creative works never get made because of that fact. Lessig points out that overprotecting intellectual property is as harmful as under protecting it, emphasizing that the victim in the war on file sharing is a free culture Lessig ; Lessig File sharing provides users with limitless access to media content that has never before been possible and gives them the ability to speak.

The law should push to find a way to protect commercial artists while enabling file sharing to survive. Remix creativity does not compete with or weaken the commercial market. Most of the academic literature concentrates on the effect of file sharing on the industry profitability.

This is largely an empirical question and economic studies regarding it are decidedly mixed. Music and other audio content Majority of studies involved in music industry research mostly find that piracy harms revenues, but the extent of this harm is not clear.

Liebowitz, ; S. Liebowitz, Following mentioned trends, Dewenter et al. Some suggest that the benefits from file sharing go beyond increased revenues from concerts and supporting merchandize. Movies and other video media The academic literature related to the sharing of movies online is more unanimous. E-books and games There are fewer academic papers regarding sharing books and games online. These forms of file sharing are not as popular or widespread, making it harder to study, which explains the scarcity of such research.

Hu and Smith considered the impact of distribution of Kindle e-books on sales of print books. Their results suggest that delaying e-book availability results in a small and statistically insignificant increase in print sales and a large decrease in total e-book sales. Bhattacharjee et al. These studies imply that, even if a weakened copyright regime turned out to reduce industry profitability, it is not obvious whether a decline in profits would undermine the incentives to create and distribute media art.

More recent researches into copyright enforcement indicate that the enforcement of a three-strike law has negative impacts on file sharing. Similarly, Danaher at al. All of these papers summarize the impact of file sharing on the industry or legal enforcement, but they cannot assess the impact of file sharing on users, creators and media content itself, which is the focus of this thesis.

There are some researches into file sharers and their behavior, but none that connects it to the changes in media industries and forms of media content. File sharers It seems that the percentage of buyers among music and film downloaders is just as high as among non downloaders and that those who engage in file sharing are willing to spend more money on authorized products Filby, ; Huygen et al. A portion of file sharers also declares that watching pirated movies increases their demand for films Bounie et al.

Possibly the biggest research into file sharers and their motives was conducted as an online survey on ThePirateBay, which was filled out by 75, file sharers. The results suggest that file sharers are However, when considering the results of this research, one must be aware that there is a possibility men are simply more inclined to filling out an online survey; or that younger population is, which makes it difficult to pinpoint these results to all file sharers.

The findings of all the studies consulted during the preparation for writing this thesis are summarized in the Appendix A at the end of this thesis. What you have to do is compete with it« Danaher et al. When popularity of file sharing services demonstrated the huge demand for digital content, media industries remained unwilling to license Web distribution and instead pursued relentless campaigns designed to educate, deter and avenge Litman Instead of exploiting the enormous potential of development, entertainment industry responded with fear, trying to stop and ignore the changes users demanded.

Media industries are, in most cases, still claiming that it is difficult, if not impossible, to successfully compete with free content offered by file sharing channels. Steve Jobs, on the other side of the argument, claimed that digital distribution channels offer opportunities for competing by mimicking the ease and convenience of pirated channels at a competitive price point.

He corroborated his words by developing iTunes, which are the only innovation in digital music from to Carrier Digitization and file sharing have major implications for the music, video, gaming and book industries which are unable to stem the tide of unlicensed digital downloads with a conservative strategy of legal measures and digital rights management. Traditional business models are based on controlled access to the products created, but the practice of file sharing makes it increasingly difficult for the industry to maintain control over their works.

Logic dictates that the competition improves quality of the product, but there are no clear philosophical or ideological differences between the largest media owners — a handful of media dominate media internationally and control distribution and artists. On the other hand, technological advances appear to have encouraged greater diversity throughout the media and have expanded the number of media outlets — increasing the number of internet radio stations, digital music channels and video services, online book publishers and digital gaming producers.

Entry barriers have been coming down in many sectors, especially in Europe where the number of broadcast channels has increased rapidly since the early s and the rise of the Internet only reinforced the trend Doyle The growth of digital technology and file sharing practices has undermined a wide range of media business models, but it has also created new ones, offering opportunities for price and service innovations within new technologies.

The industry started to reinvent itself by capitalizing the value of content in different ways and in different times, directly through its end-users or indirectly through collaboration with other economic players. According to the latest data, it seems that transition has been more than successful: more people are creating more content and more money is being made than ever before Image 5. Image 5. The music industry has started to accept the changes and open up to digital content, providing legal downloading, streaming and cloud services, such as Spotify and Deezer, which turned out to be a smart move.

The list shows that movie piracy remains popular, but financial reports indicate that Hollywood is not threatened. It is highly questionable that the revenues would be even higher were there no online file sharing. However, the numbers indicate that a large portion of file sharing could be attributed to box office release lags, since the most downloaded movie in is actually the one released a year before.

This section will try to illustrate the fact that the majority of changes in media content in the last decade occurred because of file sharing technologies and users of such technologies, whether it was with the intent of resisting or adjusting to the changes they brought. This led them to focus on worst case scenarios instead of exploiting new business opportunities. The arguments against file sharing predicated on legal, moral and ethical grounds. This last quote by Ulrich is particularly interesting since Metallica in the early s directly benefited from the unauthorized trading of their tapes.

They allowed fans to tape shows and trade their music for free, setting up special recording sections in arenas. It helped them form their fan base and they got their first big break from the world of tape trading. While some artists were critical of file sharing, there are also those who encouraged artists to share their music. Dave Matthews Band developed its initial fan base by encouraging people to record their shows and give them to friends.

This practice built word-of-mouth and by allowing their music to be copied and traded they reached bigger audiences and ensured popularity, which rose through late s. With the rise of digital technologies, file sharing proved to be a useful practice once again: the band recorded an entire album, but decided it was not worth putting out. However, the songs leaked onto the Internet and fans devoured them.

The extensive downloads persuaded them to release the album and the official version, Busted Stuff, debuted as number one. Even though the album was available on file sharing networks for free, it sold two million copies. When the album Yankee Hotel Foxtrot was finally released, it ended up debuting in the Billboard top twenty and went on to be the bands biggest album, selling half a million copies.

The publicity surrounding the plight of the record combined with the free distribution of their music on the Internet undoubtedly generated more sales McLeod These examples show that the solution to selling more official copies lies in creating incentives and positive reinforcements to purchase, like increasing the value of packaging and supplementary materials. It also seems to be difficult to give musical content for free, unless the industry creates the demand and supports the release.

Six weeks prior to the release of the soundtrack from the film Eight Mile, the recordings leaked onto the Internet but the level of downloads remained small until the industry marketing campaign began. Digital technologies and file sharing practices also changed the income scheme for artists. Today, artists make most of their money from performing, selling additional merchandise and sponsorships, not from record sales Huygen et al.

File sharing helps spread the word about bands, it creates a sense of community and gives users a way to find out what is popular before it enters mainstream. Creativity is spread freely and it gets paid in new ways. Unlike Metallica, who fights modern file sharing practices, Iron Maiden showed that file sharing carries a huge financial potential. The band followed studies that showed file sharers often spend more money on concerts and merchandize, and they relied on file sharing statistics to identify geographical areas where fans download their music the most.

They used this data to organize a concert tour which they advertised trough social media. Not everybody sees this potential. He dropped the lawsuit a few days later, but the dismissal was without prejudice so it can be raised again the future TorrentFreak f. The development of Napster and subsequent file sharing technologies allowed customers to download music from the Internet, something that was virtually impossible until then and it also showed that there is a demand for access to singles instead of whole albums.

Steve Jobs recognized this demand and explored its marketing potential. The composition and business model of iTunes was a direct result of the Napster experience, and the launching of iTunes, together with the success of P2P networks, convinced the labels to implement pay-per-download business model, which subsequently expanded into pay-per-view business model.

Digital music retailers are fast spreading their reach globally. At the start of , the largest international digital services were present in 23 countries. In , they were present in more than 58 countries, and iTunes is reaching more than 50 countries worldwide IFPI Subscription services Spotify and Deezer are also expanding fast across national borders. However, only Deezer is available in Croatia since mid , while Spotify is still unavailable.

Download stores account for a large proportion of digital revenues and account for most of the legitimate services worldwide, offering libraries of up to 20 million tracks. These different models produce different financial returns. In pay-per-download model, an album or track is downloaded once and paid for. In the streaming environment, a track or album can be listened to hundreds of times, each triggering a payment to rights holders. The individual payment for a stream is lower than a download, but the cumulative payment triggered by repeated listening may be higher over a longer period.

This trend debuted in Croatia even in , when the Croatian band Pips, Chips and Videoclips released their album Pjesme za gladijatore trough the mobile carrier T-Mobile, a month before an official release in record stores T-Mobile A different type of bundled service, also aimed at reaching new types of music consumers, integrates music and hardware offer.

Spotify has partnership with Sonos, giving music fans a subscription offering that provides top-quality audio gear for people who want to listen to music at home IFPI Integration with social media also became vital in the digital age of music industry. Seven of the ten most followed people on Twitter are artists, with Lady Gaga and Justin Bieber in first and second place. In an effort to do this, the label created a special app which was downloaded more than , times and they carefully released digital assets, such as photos.

For example, they built excitement about the first picture of Robbie Williams with the rest of the band before releasing it and they encouraged fans to share it with their friend and followers after the release IFPI Fans were offered premium concert tickets, with which they received a code they could use to download studio tracks from performing artists.

Social networks provided feedback on the music and this helped him decide which of the 40 tracks should appear on his debut album. The label built a microsite which enabled users to anonymously post their stories of heartbreak into a virtual jar, while other visitors could offer advice, setting these hearts free. Linkin Park merged their music with social media by creating a personalized, interactive music video for every fan. The app drew in the metadata from the photos and selected those relevant to the story in the video: photos passed between the actors elicit extreme reactions, such as reverence or love, depending on the context of the photo IFPI The album was released without any announcement or built anticipation.

All songs are available on YouTube as music videos and users can watch and listen to them for free. Nevertheless, the album was sold in more than 1. It is clear that file sharing contributed to development of new, digital business models which transformed the image of music industry. Some still combine old with the new, offering online payment and delivery for CDs, while others offer fully digital, download-only products.

Others offer on subscription and streaming services, which are becoming a vital part of the music industry, while some rely on linking the music industry with other entertainment and non-entertainment industries creating bundled products for customers. Such development poses a certain threat to music shops and record companies, making them obsolete in the world where artists reach their audiences directly. There is certainly great potential in developing new digital business models in the music industry and this potential just started revealing itself.

Music video streaming services are also seeing strong growth. YouTube, the most popular digital video service, has more than million active users globally. He claims that there are many artists who used this formula to create successful strategies for building up a stronger fan base, creating new works of art, distributing them and getting paid for it, but Reznor is particularly interesting as a case study because he's done it many times in many different ways.

For example, after signing with a major label in and before releasing the album Year Zero, he connected with fans by creating an Internet scavenger hunt. Part of this experience was that Reznor took USB45 drives with some new music from the band and he dropped them in bathrooms at the concerts he was doing. Fans found the drives and, naturally, shared the music online. This resulted in engaged, energized and excited fans, but it also got the record label angry, resulting in cease and desist letters from RIAA.

In spite of music leaked by the band itself, the album still sold, because Reznor, upon connecting with fans, gave them the reason to buy: the CD itself changed colors as it warmed up in the CD player, which is an experience that cannot be duplicated with an MP3 Masnick Digital music consumption became mainstream and by following this trend, content providers are further blurring the lines between legal consumption and file sharing.

Amazon, Apple, Google and Microsoft boosted their music services with cloud based features. Comparing the case of MP3. New research further confirms this, finding that file sharing encourages distribution of existing music, and it also boosts creation of new hit music Lunney Even with ubiquitous file sharing spurred by increased Internet, cinema market has been relatively stable.

Nonetheless, digitization and file sharing, together with altered user behavior, definitely brought some relevant changes to the industry. Analogue VHS46 has been replaced by digital DVDs and Blu-ray discs, and while the rentals of such media formats are declining, their sale is increasing, together with cinema visits Huygen et al. The costs of production of film has dropped significantly as digital equipment became more powerful and less expensive, making it easier to produce a high quality film and blurring the lines between amateur and professional Lessig Hollywood, much like the music industry, also started relying on selling content-based and other related merchandize connected with characters, quotes or props from movies.

The rest of the money comes from television licensing, DVD sales, merchandising and other commercial deals. Films stopped being films; they are business models that connect commodities in all sorts of different industries. They have also become risk-averse, and instead of signing new directors and original ideas, they produce tried and tested content: remakes, movie adaptations and superhero franchises. Services like Netflix and Hulu create revenue for movie studios, but they are especially profitable for TV production houses.

Video file sharing always provided users with this opportunity, giving them the option to create and instantly access their own digital libraries of movies and TV shows they like, season by season, episode by episode. Video streaming services base their business model on such behavior and offer the same access, legally.

In an effort to create a competitive advantage, Netflix even started to release whole seasons of popular TV shows like Arrested Development and House of Cards Hypable. BBC48 followed similar logic upon the release of their hit show Sherlock Holmes. Aware that unavailability of content is one of the key drivers for online file sharing, they made a deal to broadcast Sherlock Holmes on a Chinese streaming platform just hours after its UK debut TorrentFreak g.

This could be a great hint for movie studios, whose biggest loses to file sharing come from big release windows and earlier availability of media content on illegal channels. Research further confirms this: the majority of illegally shared movies are not available on legal channels tportal. BOOKS Books and magazines have been shared digitally since the inception of the file sharing practice. However, this form of file sharing has never been widespread, probably because the inconvenience of reading from a computer screen and the lack of practical file formats made consuming such content unpractical and uncomfortable.

Rowling TorrentFreak h. Open with Desktop View raw View blame. This file contains bidirectional Unicode text that may be interpreted or compiled differently than what appears below. To review, open the file in an editor that reveals hidden Unicode characters. Learn more about bidirectional Unicode characters Show hidden characters.

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