1. Who will win the competitive battle between P2P file sharing networks and iTunes over the long run and why?
I think the critic in the last paragraph of this case made the best argument about the competitive battle between P2P and iTunes when he said: “in terms of stopping file sharing, any edict, even one the highest court in the land, is about as effective as a mop in a monsoon” and “iTunes isn’t about selling songs; it’s about selling more iPods.” P2P file sharing networks and iTunes are not competitors or rivals.
P2P file sharing networks will continue to pop-up, evolve into authorized pay-for models or get shut down, etc. I used Napster in college. My brother (five years younger than me) used Kazaa. The next kid will use whatever is the latest, greatest, and most importantly, free file sharing network that exists when they need it. When lawsuits started popping up about Napster after I graduate from college, I changed my free-loading user ways, felt like it was “cooler” to respect copyright laws and stopped downloading pirated music on my personal computer and/or laptop. I have been an iPod owner since they first came out but I have purchased less than $500 in songs and I am guessing this is more than many iTunes users. If I want the music, I go out and spend $9.99 on the actual CD and then load it into my library. Then I went home to Boston a couple of weeks ago, visited my brother, and then loaded his pirated music from his laptop into my library. I am a copyright violator once again. I am willing to pay $0.99 for a song or a $1.99 for a TV episode in case my husband accidently erased it from our DVR, but I also still routinely download the free iTune of the week- not because I like them all, but because it’s free so why not?
I am not sure the record labels will ever win this battle due to the fact that it is too difficult to prosecute and collect on this kind of copyright infringement. Suing grandmothers who have never touched a personal computer or high school cheerleaders turned internet celebrities does not help their cause either. I like Courtney Love’s solution about tipping artists for their music since a lot of the music I download happens to be more of the emerging, independent artists than big names like U2 or Beyonce. I heard on the radio this morning that Beyonce’s latest album that has more songs if you buy it in the store, but less if you download? From a marketing standpoint, that is a great way to encourage fans to go out and buy the actual CD rather than just downloading- especially for someone as popular as Beyonce.
So while P2P file sharing networks will continue to battle each other, the record companies the RIAA, iTunes will continue to be iTunes and I will continue my dependence on my iPod which I am quite certain I will never manage to fill.
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Don't the characteristics of iTunes and P2P networks effect the usage of each others services? In other words, iTunes provides a legal alternative for consumers who feel the risk of P2P is too high. Conversely, P2P serves customers with a higher risk tolerance and a lower willingness to pay for music. What if iTunes drastically lowered their prices, to say 1 penny a song, would we see people defect from P2P networks to iTunes?
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