70
ortunity to enact regulation, MTV was launched, and the industry had a record turnaround. "In the end," Cap Gemini concludes, "the 'crisis' . . . was not the fault of the tapers--who did not [stop after MTV came into being]--but had to a large extent resulted from stagnation in musical innovation at the major labels."11
But just because the industry was wrong before does not mean it is wrong today. To evaluate the real threat that p2p sharing presents to the industry in particular, and society in general--or at least the society that inherits the tradition that gave us the film industry, the record industry, the radio industry, cable TV, and the VCR--the question is not simply whether type A sharing is harmful. The question is also how harmful type A sharing is, and how beneficial the other types of sharing are.
We start to answer this question by focusing on the net harm, from the standpoint of the industry as a whole, that sharing networks cause. The "net harm" to the industry as a whole is the amount by which type A sharing exceeds type B. If the record companies sold more records through sampling than they lost through substitution, then sharing networks would actually benefit music companies on balance. They would therefore have little static reason to resist them.
Could that be true? Could the industry as a whole be gaining because of file sharing? Odd as that might sound, the data about CD sales actually suggest it might be close.
In 2002, the RIAA reported that CD sales had fallen by 8.9 percent, from 882 million to 803 million units; revenues fell 6.7 percent. 12 This confirms a trend over the past few years. The RIAA blames Internet piracy for the trend, though there are many other causes that could account for this drop. SoundScan, for example, reports a more than 20 percent drop in the number of CDs released since 1999. That no doubt accounts for some of the decrease in sales. Rising prices could account for at least some of the loss. "Fr
