Peer-to-peer filesharing is a process by which different computers can upload and download material from a central server that also allows other computers to connect to and use it. The applications that allow this process range from the early Napster, to Gnutella and Kanzaa, to BitTorrent, Megaupload, and Mediafire. It is not filesharing itself that is illegal; it is the potential copyright infringement that has drawn the eye of the RIAA and the US Copyright Office. In the Supreme Court case MGM vs. Grokster, the court decided that the creators of P2P filesharing networks and applications can be held legally accountable if it is found that the intent of the program is to violate copyright laws, which caused multiple networks to shut down in the 2000s rather than go bankrupt from court fees. In 2004, approximately 70 million people participated in online filesharing. A 2009 CBS news poll found that 58% of all Americans and nearly 70% of 18-29 year olds found it acceptable for a person to share a CD with a limited number of people. In 2006, over 30 million Americans had illegally downloaded an entire movie, and only 40% of that population thought that it constituted a serious legal offense. Of the 22 independent studies on the effects of filesharing, fourteen found that illegal downloading has a negative effect on the music industry, three found that it has little or no impact, and five found that it actually has a positive impact. In one study, done by researchers in Canada, it was found that 75% of illegal music downloaders would have purchased a legal copy of the music had they not been able to find it online, suggesting that the complete shutdown of P2P filesharing wouldn’t harm the market as much as some claim. A researcher at North Carolina State University also found that illegal filesharing positively effects established artists while negatively effecting newer ones. According to the book The Wealth of Networks, however, P2P filesharing is the most efficient way to sell music, since it removes any middle-ground players that require compensation. Many hold that the music industry is going to have to find a way to work with the current economy of filesharing rather than against it or risk having to sell their content to mediums such as iTunes, Google Play, and Amazon completely and make money off of merchandise instead.
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