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Sample Research Proposal on How MP3 Phenomenon and of Peer to Peer Transferring Sites such as Napster have Impacted on the Music Industry


The rise of the Internet has produced new social practices that never could have been predicted. Among those is the practice of peer-to-peer (P2P) music file sharing. The new computing technologies have provided to the Net users the opportunity to download to their personal computers and distribute to the Web, free musical pieces of art in digital format. This is a result of a file-compressing technology called MP3, which has made the transportation of music in the Net very easy (Kasaras, 2002)

This software program, which Internet consumers gained access to in the mid-1990s, enables users to compress recorded songs from personal music collections into a file of 3.5 megabytes from a song on CD originally of 40 MB, thus decreasing transfer time from two hours to 10 minutes. This convenience began to fuel the practice of file swapping and was further encouraged by the introduction of the website, portable MP3 players, and later, Napster.

Instead of following in the footsteps of, which provides music from its own database, Napster introduced a web site in 1999 that allowed MP3 users who were looking for and offering music files to connect with each other, thus facilitating P2P file sharing. was sued by the 5 major record labels, but four of those labels eventually settled, costing millions of dollars. Napster hoped to avoid such litigation because the service does not actually disseminate the recorded music files; it merely connects users who then exchange the files directly with each other. Napster became an overnight sensation in 1999. Business Week states "Napster raged across the college circuit like a forest fire. College students throughout the US were discovering Napster, and they couldn't get enough of it" (Business Week, 8/14/00). Colleges became the hot spots of Napster activity because students had access to the high-speed connections that still are not prevalent in homes. (Hutchison, 2002)

In lieu of this phenomenon, the researcher is interested to know how such new practice has impacted on the music industry, whether it has caused harm to the recording industry at large.

Statement of the Problem

The MP3 phenomenon has certainly placed the recording industry on the offensive, filing lawsuits right and left against perceived ill effects the practice has done to their sales. With this backdrop, the researcher wishes to pursue the following investigation for this study:

1. What has been the effect of the MP3 phenomenon and of peer to peer transferring sites such as Napster on the music industry in terms of:

a. record sales,

b. concert attendance, and

c. breakthrough of new artists?

2. Why are record companies against such sites as Napster?

3. What are the reasons why people use such sites as Napster?

4. What are the most popular activities people do in such sites?

5. In what ways can this technology be embraced by both the recording industry and the public where both end up in win-win situations?

Nature and Significance

Music file-sharing on the Internet via websites and networks such as the notorious Napster has become an extremely controversial topic in recent years. Moreover, the availability of MP3 files on the Internet has been growing by leaps and bounds. MP3 compresses music files at near CD quality for easier transmission. Music of all types is available for download and there are even small portable MP3 players now available for listening while away from any computer. The problem has always been where to find the MP3 files to download. Napster has solved that problem and is taking the world by storm. Since May 1999, when Napster began introducing millions of Internet users to the pleasures of trading music via a peer-to-peer network, music file-sharing has become ubiquitous online.

Created by 19-year-old Shawn Fanning in 1999, Napster is an application that gives individuals access to one another's MP3 files by creating a unique file-sharing system via the Internet. It connects directly to a community of fellow music lovers so that a music lover can search for music by artist or by song title. It then instantly provides a list of titles matching the search criteria, so one or more titles can be tagged and downloaded directly to the music lover’s computer (Fox, 2000).

However, Napster has been under fire from the Recording Industry Association of America (RIAA), who interprets Napster as copyright-infringement software. But, because the MP3 files do not reside on Napster's servers, nor does Napster charge a fee for the service, critics felt the RIAA had a weak legal leg to stand on. Napster simply allows individuals to share music, as does tape recorders and CD burners. However, in March of 2001, due to a court order, Napster blocked the trading of over 100,000 files of copyrighted songs. The court ruled that Napster's technology was an infringement on the copyrights of published music (

There has been a great deal of public argument over the effects of this phenomenon. The recording industry views Napster-style file-sharing unambiguously as stealing and have tried to enforce its view by filing lawsuits against Napster and other similar online services. Napster itself has been effectively put out of business by legal action since July 2001, and a number of other lawsuits against most of the other major file-sharing services are currently pending. Among listeners, however, there is little agreement on whether or not file-sharing is the equivalent of theft, with many contending that they are actually led to purchase more music in physical form such as CDs because of their music downloading. Many polls and surveys of online behavior have attempted to learn more about music fans’ actual online behavior in the past few years, but with ambiguous and conflicting results. Some studies, notably those commissioned by the recording industry as represented by the RIAA (the Recording Industry Association of America) or the IFPI (the International Federation of Phonographic Industries), have found that music file-sharing contributes directly to decreased purchases of music by consumers because it allows them to easily obtain the same music free of charge from the Internet. A recent statement from the market research unit of the IFPI released on April 2002 places the blame for a reported 5% overall decline in global sales of recorded music in 2001 squarely on Internet file-sharing and other forms of high-tech music piracy (von Seggern, 2002).

Purpose of the Proposed Project

This study aims to depict the MP3 phenomenon and the peer-to-peer transferring sites such as Napster in terms of its impact on the recording industry using the following indicators: record sales, concert attendance, and the breakthrough of new artists. Moreover, the researcher wants to know the following: why record companies are against such sites as Napster, the reasons why people use such sites as Napster, and the most popular activities people do in such site. By getting a clear picture of how this technology is being utilized, the researcher can explore ways in which this technology can be embraced by both the recording industry and the public where both end up in win-win situations. Undoubtedly, this technology has revolutionized how music is being marketed to the masses, making the traditional ways of selling music, the way big recording companies want it, dangerously threatened, resulting in such gung-ho tactics. The researcher wants to reconcile such technology to the current market practices of selling music, hoping to offer it as an alternative way of making more kinds of music more available to more people, without the constrictions of radio airplay, or the problems of lack of stocks of hard-to-find copies in one’s neighborhood record shops.

Problem-Solving Methodology

  1. Research on existing legislation or legal mandates that prohibit the peer to peer transferring of music files.
  2. Look into the judgments handed down on the lawsuits against sites like Napster and examine the decisions of the court, point by point, and the impact of such decisions to peer-to-peer transferring of files.
  3. Collate articles related to peer-to-peer music file sharing and the MP3 phenomenon.
  4. Gather data on the effect of peer-to-peer music file transferring and the MP3 phenomenon on the recording industry based on indicators like sales, concert attendances, and break through artists.
  5. Interview different music lovers and their opinions on the technology.
  6. Conduct a survey on people who download music and find out what their thoughts are about their practice and a description of their music buying habits, their concert attendances and the new acts they have learned about exclusively through the net (i.e. without the benefit of radio play).
  7. Present, analyze and interpret the results of the survey and tie it in with the interviews done as well as the documented data available on the subject.
  8. Formulate conclusions especially on the practice of peer-to-peer file sharing activities and the MP3 phenomenon.
  9. Draw recommendations from the findings of the study.


Fox, Jim. (2000). ‘MP3 Lovers Unite’ Available from: [Accessed: 01/11/03]

Kasaras, Kostas. (2002). ‘Music in the Age of Free Distribution’ ble from: [Accessed 01/11/03]

Hutchison, Thomas. (2002). ‘The Napster Revolution in College Campuses: How Universities and the Recording Industry are Copingwith the music-file sharing sensation. Available from: [Accessed 01/11/03]

Nilsson, Erik. (2000). ‘Napster: Popular Program Raises Devilish Issues’ Available from: [Accessed 01/11/03]

Von Seggern, John. (2002). ‘Music File-Sharing: Impacts on the Music Industry’ University of California: Riverside



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