Downloading Music in Latin America

 The following story appeared on CNN in November 19, 2001:

When Marty Levinson, a 22-year-old law student at the University of Georgia, discovered he could download music from the Web, it was a dream come true. "All of a sudden, I could get all sorts of music, and I didn't have to buy the entire CD to get it," he says.

Every time Levinson (or anyone else) downloads a tune off the Internet, he is almost certainly stepping outside the law. "It's copyright infringement," says Andy Norwood, an intellectual-property attorney at Waller Lansden Dortch & Davis in Nashville. "Downloading a copyrighted file is making a copy, one of the exclusive rights of the copyright holder."

Some say digital music on the Net has already eaten into CD sales. Worldwide music sales dropped 5% in the first six months of 2001, while sales of blank CDs increased 80% last year and are expected to grow 40% this year, according to the International Federation of Phonographic Industries.

You're on safe legal ground if you copy songs for your own use from CDs you own. But duplicate a song and give it to a friend, whether on a burned disk or over the Net, and you too are violating copyright. And unless you know otherwise, it's safe to assume that every piece of recorded music you encounter online is copyrighted.

That said, average citizens have routinely abused copyrights ever since the photocopier and the dual-cassette deck were invented -- yet the government has rarely gone after such scofflaws. And given law enforcement's other priorities right now, that's not likely to change soon. "Are they going to throw you into the hoosegow and fingerprint you and take your photograph?" says Norwood. "Probably not."

If the enforcement of copyright laws is lax in the USA, we can imagine that it may be even more lax outside.  Periodically, there may be highly publicized raids against CD manufacturing facilities and retail pirates, but enforcement against individual consumers is probably extremely rare.  We will now cite some survey data from the TGI Latina Study.  This is a consumer survey of 48,885 persons between the ages of 12 to 65 years old in eight Latin American countries (Argentina, Brazil, Chile, Colombia, Mexico, Panama, Peru and Venezuela) conducted during 2001.  Among these survey respondents, 12,744 indicated that they had accessed the Internet in the last 30 days.  And among these Internet users, 34.5% of them said that they had downloaded music (for example, MP3 files) within the last 30 days.  This would make downloading music one of the most popular activities among Internet users.

In the next chart, we show the incidence separately by people who have used the Internet in various types of places in the last 30 days.  It is possible for someone to have used in more than one of these types of places.  The workplace has the lowest incidence, as this type of activity is usually not regarded as work-related and a waste of bandwidth.  As for schools, a major observed phenomenon among US universities was that music downloads account for as much as 85% of the total bandwidth, and the resulting slowdown for everyone caused some administrators to install special software to restrict music downloads with respect to speed and bandwidth.

In the next chart, we show the incidences by the overall time that the people have spent on the Internet in the last 7 days.  Heavier users are more likely to download music.  For someone without broadband Internet access, downloading music is actually a time-consuming process, especially if there are frequency drops in the connection.  Without even considering the actual downloading time, the process of searching for and then testing the quality of specific recordings can consume a lot of time.  This is perhaps a point not appreciated in the debate about copyright, because it would seem that if the authentic recordings are priced reasonably, then people would rather pay than spend a lot of time searching for and downloading music.  The current practice of downloading music seems to be driven by two reasons: (1) high retail prices that would make the investment of personal time to search and download music worthwhile; and (2) the packaging of music in album format with one or two 'good' songs and a dozen other forgettable fillers. 

In the next table, we show the incidences by age/sex groups.  For a given age group, the incidence is higher among men than women.  Within either gender, the incidence is highest among the younger people (12-24 years old) and decreases with age.  This reflects the greater interest in music as a whole, as well as disposable income.

In the next table, we show the incidences by socio-economic levels (Level A=top 10%, Level B=next 20%, Level C=next 30%, Level D=bottom 40%).  The incidence is an increasing function of socio-economic level.  Downloading music is in fact not totally free.  If one is paying for connection time by the hour, those large music files will take time and money to download.  The utility of the music is increased if one has sophisticated equipment such as CD burners and portable MP3 playback devices.

The recording industry is dominated by US products, and it is therefore likely that most of most of the downloaded music would be from the USA.  In the next chart, we see that the incidence is higher as a function of the ability to read English. 

This brings us to the issue that began this article: Does downloading music cut into the sales of recorded music?  In that next chart, we show the incidnece of  the purchase of compact discs within the last 30 days.  We note that this number includes the purchase of both legal as well as pirated copies.  Among all persons 12 to 64 years old, the incidence was 21.6%.  When we looked among the Internet users, who are more affluent, the incidence rises up to 36.0%.  When we looked among the Internet users who downloaded music, the incidence rises up to 39.3%.  However, this does not constitute incontrovertible evidence because it can be argued that the incidence among the Internet music downloaders would have been EVEN higher!

(posted by Roland Soong, 6/07/2002)