QUOTE(Garf @ Oct 5 2007, 11:57)

It's clear to me that copyright as we know it, a legal insurance that you can directly sell music, software, movies, etc... is a dead-end, and basing a business on it is not future-proof. Musicians (and software companies) relying on it will face tough times. Just look at what the big boys are doing. Microsoft is looking like a lone holdout, but remember that they "bundle" more than they "sell". So again, relying on copyright or "victories" like this is hopeless, and if you do, I feel sorry for you.
But to claim nobody is hurt by this change (nobody is hurt by stealing music) is just plain silly.
businesses such as microsoft and major member labels of the RIAA have relied for years on the barriers to entry in these industries to maintain large market share and high profit margins. since this is a thread mainly about music and copyright infringement, i'll stick to the problem with the music industry, but these arguments really apply to both.
since the recorded music industry took off in the 1920's and 1930's, record companies have relied on the difficulties of recording, producing, and distributing records to create an oligopolistic marketplace. in this environment, a few large companies can prosper at the expense of the consumer by colluding to set market prices above a stable and reasonable level. the size of these companies necessitates this kind of price inflation, because the only motivation is profit for all. in a large firm like a major record label, there is tremendous administrative overhead involved. all of the employees need to be paid, and everyone involved in the record industry (barring musicians) expects large returns on a small amount of work.
the simple fact of the matter is that digital media and widespread content distribution via the internet have created points of easy entry into both the software and music industries. for the first time in history, it is easy for startup firms and even individuals to enter the industry and actually compete. the market structure of the music industry is changing, and the large recording labels are wary of what this means. with more competition, profit margins will fall as the market prices adjust to a new equilibrium point. i'll make an example.
when the RIAA and member labels began suing individuals for copyright infringement, i immediately began boycotting their music, even if this meant not buying the cd's of bands that i like. since 2003, all of my music purchases have been from independent labels, and as often as possible, i buy directly from the artist from merch tables at shows. this means that i pay between $8 and $12 for a cd, on average. this seems like a reasonable price to me, taking into account the time and money spent writing the music, recording it, mastering it, designing album art, and printing cd's. a price of $8 to $12 is just about enough to break even and even make some profit from producing an album. i'm talking about economic profit here, too. that takes into account all expenses, including compensation for the artists and all other parties involved. anything past breaking even is extra money.
so let's take a look at what this means for the recording industry as a whole. artists can expect to receive a larger portion of the revenue from album sales by recording independently or signing to a small label, due to the decreased overhead incurred. not only that, but independent artists, working harder to produce a high-quality product, are beginning to win more of the market share, because people recognize their works as superior. in the growing independent music community, there is an air of superiority and much disdain for mainstream commercial music. this isn't to say that all independent music is better, or that all mainstream music is bad, but there is a general trend that is increasing here. as new artists begin to make a living from music, it will be increasingly difficult for any particular artists to dominate the industry. pop stars should and i hope will become a thing of the past. music is just like any other art; good art comes from the desire to create, not from a desire for profit.
that being said, some may interpret my words to mean that i think musicians should not be compensated for their work. this is not the case.
yes, i think it's possible to make a living as a musician.
no, i don't think that musicians should be compensated more than myself or any other blue or white collar worker are for their labor.
i am a software developer, and i work 45 hours per week. i think that my salary is very reasonable. i see no reason for anyone to expect that they should be able to produce one album in a year and earn any more than i do from that. in fact, i don't think it's valid for someone to expect to earn that much just from producing an album. being a musician should be a full-time job just like any other. that means touring and playing plenty of local shows when not on the road. this hearkens back to when music was predominately performed live, such as in the 1920's when jazz bands were playing at dance clubs on a nightly basis.
the economic structure of the music industry is going to move toward a purely competitive market, and there's nothing that will stop this. as the major labels begin to see their profits wane in the light of market adjustments, they are going to engage in some violent death throes.
the reality is that the industry is not worried about profits lost to piracy. the RIAA wrongfully assumes that squashing the file sharing community will maintain the importance of radio (payola and top 40) in music distribution and therefore prevent the flood of new entries to the industry from evening the playing field. they are worried about losing control of the dissemination of music to the masses. there is no way to stop the flow of information over the internet short of completely disabling it, though, and the RIAA does not have the power to do this. within the next 5-10 years, it will become clear that these frivolous lawsuits have no effect on file sharing, and that file sharing is not the problem. after all, people who are seriously involved in file sharing aren't even sharing content from major labels, they are sharing hard to find media from obscure sources, with the hope of spreading it to a wider audience.
there will be new competition, and there will be a redistribution of wealth and capital in the music industry. those affected will be the major labels, not the artists. there is no way to stop it now.