American Marketing Association

            According to the American Marketing Association, “In recent years, music industry sales have declined in the United States by an average of 7% per year, after peaking in 1999. Much of this sales decline has been attributed to the widespread use of illegal file-sharing sites, such as Napster, Grokster, and LimeWire.”  ITunes along with many other file sharing websites that are legal, music can be downloaded at a price to where the music isn’t pirated illegally.   

Digital piracy has become a major problem in the entertainment industry; it undercuts the growth of an artist financially, causing album sales to drop, and piracy also affects the life of record companies.

  The very best thing that has happened to the entertainment industry is also the thing that threatens it, and that’s the Internet.  “Music piracy has become an important issue since the turn of the century.  As the Internet has grown, sales of counterfeit CDs through online auctions, web sites, spam, and other channels have increased significantly (Bocij, 2006, p. 5).”  Through the Internet, Mp3 files play a major role in the illegal downloading of material.  With Mp3 files, songs and even whole albums can be downloaded all in a matter of a few minutes.  Being that the Internet has grown tremendously, software can be pirated in more and easier ways. 

            “Music must be set at a level that will recover the initial cost development, fund further development, and allow research into new products.  Once the company’s investment has been recovered, the price can be lowered a little (Bocij, 2006, p. 148).”  But because of piracy, the artist, the management, and the label the artist may be under loses money from sells of the music.  “This jeopardizes any further development of the program and obstructs the introduction of new products (Bocij, 2006, p. 148).”

            Dealing with artist management, with piracy going on, it produces a cycle that drives the prices of the music up, in some cases.  This doesn’t necessarily mean that since the price of the project has been driven that the artist and his/her employees get to see that money.  It’s an even bigger risk to take, banking on new generated sells from the project, and the decrease of piracy.  Dealing with management – artist relationship and piracy, is a big deal.  If the artist makes no money then the manager makes no money.