Sales of compact discs (CDs) are the major source of revenue for recording companies. Although piracy—that is, the illegal duplication of copyrighted materials—has always been a problem, especially in the Far East, the proliferation on college campuses of inexpensive personal computers capable of capturing music off CDs and sharing them over high-speed (“broadband”) Internet connections has become the recording industry's greatest nightmare. In the United States, the recording industry, represented by the Recording Industry Association of America (RIAA), attacked a single file-sharing service, Napster, which from 1999 to 2001 allowed users across the Internet access to music files, stored in the data-compression format known as MP3, on other users' computers by way of Napster's central computer.
According to the RIAA, Napster users regularly violated the copyright of recording artists, and the service had to stop. For users, the issues were not so clear-cut. At the core of the Napster case was the issue of fair use. Individuals who had purchased a CD were clearly allowed to listen to the music, whether in their home stereo, automobile sound system, or personal computer. What they did not have the right to do, argued the RIAA, was to make the CD available to thousands of others who could make a perfect digital copy of the music and create their own CDs. Users rejoined that sharing their files was a fair use of copyrighted material for which they had paid a fair price. In the end, the RIAA argued that a whole new class of cybercriminal had been born—the digital pirate—that included just about anyone who had ever shared or downloaded an MP3 file. Although the RIAA successfully shuttered Napster, a new type of file-sharing service, known as peer-to-peer (P2P) networks, sprang up.
These decentralized systems do not rely on a central facilitating computer; instead, they consist of millions of users who voluntarily open their own computers to others for file sharing.
The RIAA continues to battle these file-sharing networks, demanding that ISPs turn over records of their customers who move large quantities of data over their networks, but the effects have been minimal. The RIAA's other tactic has been to push for the development of technologies to enforce the digital rights of copyright holders. So-called digital rights management technology is an attempt to forestall piracy through technologies that will not allow consumers to share files or possess “too many” copies of a copyrighted work. As companies work on the hardware and software necessary to meet these goals, it is clear that file sharing has brought about a fundamental reconstruction of the relationship between producers, distributors, and consumers of artistic material. As broadband Internet connections proliferate, the motion-picture industry faces a similar problem, although the digital videodisc (DVD) came to market with encryption and various built-in attempts to avoid the problems of a video Napster.
