Name: Li Hon Ming Rick, Hon Keung Lance, Jinhee Choi
Q1. How can file sharing networks make money if they do not sell music?
These file sharing
networks earn money by gaining the advertising income. Nowadays there are
thousands of file sharing software for free for anyone to download and use it.
The users don’t need to pay for any amount to download resources such as
movies, music, games, and these file sharing networks are the platforms for
companies which seeking for advertising their product or service. It seems that
such networks create a win-win situation for internet users to download what
they want without any payment, companies seeking for advertising and also the
owner of the file sharing software to gain revenue. Indeed, the record industry
is paying for such win-win situation, their business is no longer profitable as
the consumers are all shifted to the illegal downloading. General speaking, the
file sharing networks provides internet users the resources for free, gain
revenue through advertising other companies products or service, and the record
industry is the only side suffering.
Q2. In
which type of eCommerse do file sharing networks belong to?
B2B, Business to
Business. Since file sharing networks gain revenue through advertising other
companies products or service, seller refer to
the file sharing networks which selling the space of advertisement,
buyer refer to the companies which paying for advertising their products or
service. However, the internet users are the bait which to be used by file
sharing networks to lure companies to make advertisements.
Q.3
Is the record industry justified in attempting to shut down file sharing
networks down? Why or Why not?
No,
it`s not. Even though it`s true that sales of
recorded music are the worst the industry has experienced in many years
because of an indiscreet distribution
of free music file in online network, but record industry can`t shut down file
sharing networks. Because after some customer buy online music legally, online
consumer has whole ownership of that music file and uploading some file of
one`s own on network is totally his/her decision. This is same with post messages anonymously on website as a
freedom of expression.
But
in terms of intellectual property rights, this happening is really
serious problem. Not only record industry, but also CD game and movie industry
has suffered great losses because of ‘Peer to Peer’ (P2P). The main reason of
this fact is people`s perception. Because of early free download website,
despite legally prevention recently, they still think online contents such as
music, game and movie are free. Thus when we can
engage in a serious discussion about reality, there is some second best plan. That
is empathic understanding. Producer should recognize customer`s mind and
change the system according to them. CD key is great example. When customer
buys some game CD, there is a CD key, password to install and play game. If
record industry apply this method to their offline strategy, it`ll be helpful.
And also in terms of online, they can use DRM system that deprives ownership of
downloaded file after the expiry date.
The
most important thing for producer is ‘Do not forget people who want to download
free file on network, as a potential buyer.’ The reason why they oppose the prevention
policy of online free contents is they like it. If everyone must pay cost for
downloading file thanks to great policy or system, they`ll pay it naturally. So
if all online download system is closed one-sidedly by producer, they lose a
lot of potential buyer.
Q4. Do
you think that illegal downloading will disappear over time?
We think that the illegal downloading will not
disappear over time. People around the world think that illegal downloading as
free resources, which mean they can take whatever they want freely without any
consequence. In the economic point of view, this kind of resources is called
public good which is non-rival and non-excludable. For example, air is
a kind of public good, no one can prevent people to breath the air. Also,
probably not much people can endure this kind of free entertainment temptation,
especially for the developing country. In these countries, poor people cannot
afford much money in entertainment. In reality, no government can effectively
prevent people download the music or movie file from the internet. Also, in
technical point of view, there is no mean to prohibit people to upload and
share the file with other. Nowadays, internet is really common and the
connection involves globally. It is impossible to stop anybody to share illegal
resources around the world. Also, it is extremely costly for the government to
charge every sharer or downloader one by one, or even maybe more than half of
the citizen is downloading resources from internet every day in the whole
country.
