Chapter 11.1 Introduction
Over recent year, music piracy has become a great issue around the world. In UK (United Kingdom), the major label trade group, BPI (British Phonographic Industry) has suffered ?180 million lose in 2008 and ?200 million lose in 2009 due to the Internet file-sharing of music. In US (United States), Institute for Policy innovation has done an analysis and concluded that global music piracy has caused $12.5 billion of economic losses every year. Music piracy also affected 71,060 peoples lost their jobs and total amount of $2.7 billion loss for worker earning. Besides that, following the BBC news website, they have stated that record sales in US have fallen because of people using the Internet to download albums. These types of issues not only occurred in US and UK only, they also happened in others country such as Taiwan, Malaysia, China, Vietnam and also Japan. Music piracy can be considered as a type of thievery. Those who borrow CD (compact disc) from friend and burn a copy and those who downloads the songs from Internet and the song’s royalties have never been paid are considered as music piracy cases. In US, there are only 5% of people who paid for their downloaded music.
Music piracy has exists in 3 different planes:
a) Illegally mass-manufactured pirated music CDs
b) Illegal copies of legitimately purchased music CDs
c) Illegally downloaded digital copies of recorded music
By buying pirated CD we are feeding the thieves who are robbing the rightful income of the honest artist who have worked hard to compose the music. According one research done in US, Armenia has appeared on the top of the list in the software piracy corruption, following by Moldova, Azerbaijan, and Bangladesh placed as second and Malaysia has ranked as 58 in this research
Table 1.1 Statistic of Software Piracy.
C:Documents and SettingsAng Junn QuanDesktopmusic piracy ranking 1.bmp
1.2 Research background
In Malaysia, since 1996, pirated CD and VCD (video compact disc) plants have started and within 12 months, the pirated plants have increased to more than 50. In 2000, there were more than 90 pirated plants in Malaysia. The increased of people buying pirated CD in Malaysia has a great impact to the music industry in Malaysia. Pirated CD and VCD have cost the industry RM 300 million annually. Furthermore, there are significant increases of 220% trade loss attributed to music piracy in Malaysia from year 1999 to 2000. The estimated amount of trade loss in year 2000 is RM60.8 million and in 1999 is RM19 million. In addition, our country’s music industry has struggled since 1997. There are more than 800 active artists before and now the number of artist had decreased to only about 100 artists only. The availability of pirated CD and downloaded music has grabbed away the sales of original CD and music. Besides that, the increased demand of pirated CD has also influenced the local record company, they have lost their confidence to do investment in local market and hence the expenditure for local recordings has decreased dramatically.
Many music CD buyers deny that they are doing anything wrong and blame the music industry for charging high prices (Kwong et al., 2003). In some other case, some buyers of pirated CD do not hold themselves accountable for their action but they blame pirated CD seller as responsible. Some customer felt that although they buy pirated CD but the entertainers still can earn a lot of money. Some other even said that “oh, the artists or the labels are so rich. It doesn’t make any difference to them”. They feel that they are doing nothing wrong when they are buying pirated CD or download from the Internet. In China, it appears that a Beijing appeals court has ruled in favor of the Chinese search engine Baidu.com meaning the company is “not guilty of property rights infringement for posting links to websites offering illegal music downloads.” Following The International Federation of the Phonographic Industry (IFPI) in USA, they have estimates that the music piracy rate in Malaysia is more than 60%. The rate of music piracy corruption in Malaysia has already done a lot of harm to the music industry can you ever think about those other country that their music piracy rate was higher than our country such as China 82% and Pakistan 84%.
1.3 Research problem
There are a lot of issues raised from music piracy. Therefore the problem is to understand the intention of people purchasing pirated CD and unauthorized duplication of music in Malaysia. By analyzing into the intention of people purchasing pirated CD and unauthorized duplication of music, researchers can understand how to decrease the purchases of pirated CD and duplication of unauthorized music. The main reason of people purchasing pirated CD is because the price of pirated CD is extremely lower than the original CD. Furthermore, people always download music from the Internet because it is free of charged. Even those who are able to buy original CD will also choose to purchase pirated CD because they think that why should they pay higher price to get the same product. Researcher believe that many research had done on music piracy or similar topics, but research that specifically focuses on undergraduates and using attitude as mediator are rare.
Some people will choose to purchase original CD because of the quality of the product. The original CD might long lasting and easy listening. Besides that some people feel that the price of original CD is reasonable. This study intends to incorporate the attribute satisfaction of customer toward original CD to examine its effects on music piracy behavior. Attribute satisfaction can be consider as one kind of attitude, which will be further explained in later chapters by using attitude as a mediator between attribute satisfaction and music piracy.
Giles (2000) explains the prevalence of celebrity idolization in modem societies as direct products of mass media and communications. Adolescents often revere celebrities such as pop singers and sports figures (Greene and Adams-Price, 1990). Because of the prevalence of this celebrity idolization behavior, many music marketers today have created fans club and offer their fans some special gifts in order to reduce the rate of music piracy on the singers. This study will include this idolization factor to examine the effect on reducing music piracy behavior.
Today, the increase of unauthorized music downloading has greater effect compare with the pirated CD because downloading music from internet is free of charged. Some people even don’t know that they have infringed other’s copyright when they downloaded the music from the internet. When people downloaded or purchased unauthorized music product the probability they will purchase an original CD surely will decrease. Therefore, this study will further discuss about the perceive prosecution risk of the peoples that downloading, duplicating, or producing pirated music.
Based on the research problem that discussed earlier, these are the following research questions that are formulated:
(1) What are the key determinants that lead undergraduates towards music piracy?
(2) Does attitude influence the intention of Malaysian undergraduates in music piracy?
1.4 Research objective
The primary purpose of this research is to determine the factors that lead towards music piracy among Malaysian undergraduates. In order to achieve this objective, the research aims to:
The other research objective is to understand the role of attitude as a mediator, for the attribute satisfaction variable, and music piracy among undergraduates in Malaysia.
To examine the relationship between idolization, attribute satisfaction, perceive prosecution risk, social consensus, degree of seriousness of the consequences, and music piracy.
1.5 Research significance
The present study intends to understand the intention of customer towards purchasing pirated CD and downloading unauthorized music product, also using attitude as a mediator to the relationship to one of the variable, attribute satisfaction. The attitude as the mediator will tell how and why the intention of people purchasing pirated CD and downloading unauthorized music product occur. Different from former studies that researcher have found, this study that researcher trying to do mainly focus on the undergraduates in Malaysia, which is a narrowed down topic by focus on a specific group of peoples. By doing this research, researchers hope that the results will provide help for others that trying to study on larger group of respondent. And also, this research will provide aids to others who trying to study on software, video or online article piracy topics.
This study will help to give insight on the social, cognitive and physiological components that will develop an understanding on the intention of Malaysia undergraduates towards purchasing pirated CD and downloading unauthorized music product. The results from this study can be used by officials to understand the intention of people towards purchasing pirated CD and downloading unauthorized music product and create new ways to reduce the rate of music piracy in Malaysia.
The present study will be significant as it provides a quantitative analysis to justify what needs to be administered to understand the intention of people purchasing pirated CD and downloading unauthorized music product and reduce the music piracy rate in Malaysia. There could be various factors that affect the intention of people such as the idolization. Therefore understanding the key factors of people’s intention will result in accurate recommendations for music marketers and the government.
1.6 Definition of key terms
Individual’s judgments towards original music products.
Individual’s perception of their idol
Perceived prosecution risk:
Individual’s perception of risk towards music piracy
Attitude towards purchasing music products:
Individual’s attitude toward purchasing music product
Attitude towards unauthorized duplication/download:
Individual’s attitude toward unauthorized duplication/download music product
Behavioral Intention of purchasing pirated music:
Individual’s behavioral intention of purchasing pirated music
Behavioral Intention of duplication/downloading of pirated music:
Individual’s behavioral Intention of duplication/downloading of pirated music
1.7 Delimitations, scope and key assumptions
For this study, the delimitation that researcher had met was the limitation to collect those information from one of the state in Malaysia, which is Malacca. The size of the respondent was small if compare with other studies. Because of matter of time and this study was an individual project, the information that provided may not accurate as expected. In short, the main problem was the insufficient manpower.
And also, the music piracy issue touches prosecution risk that may be a threat to undergraduates, and those respondents will provide false answer to keep themselves away from troubles. Some respondents will also give false answer because they refuse to admit that they downloading or duplicating their idols production.
For the key assumption for this study, the word music piracy means the 3 different actions that explained in introduction, which is illegally mass manufacture pirated music CD or VCDs, illegally copies of legitimately purchased music CDs and illegally downloaded digital copies of recorded music. The word music piracy assumes as the action stated above and explained once again in key assumption to avoid confuses.
1.7 Chapter Summary
First part of this chapter is about introduction. The background of the research is on the next. Predict and forecast problems and circumstances that may happen when doing this research is on research problems and questions. Followed by the significance of studies that tells the difference between this research if compared with former research, and also discuss about the benefits to other sectors, such as government, future researchers, music marketers. The definition of the key words was given in the definition part. And last part, the delimitation, the obstacles that we may face, had briefly explained.
In this chapter, the theories and the expansion of theories to the present theoretical framework used in this research will be discussed. Besides, this provides some justification for the present model in this chapter.
Overview of the Literature
Various literatures from scholars in Malaysia and abroad were reviewed on the subject of attitude in particular. A number of works studying attitude and intention in getting involved in music piracy were using convenience sampling method. The samples involved are usually students and sample size of the population was represented by students of the university. Although this method is convenient, the differences in explanatory power between laboratory experiments and field study are potential setback. Sun and Zhang (2004) and Gopi (2006) found that studies using laboratory experiments have relatively higher explanatory power than field studies. Lucas and Spitler (1999) suggested that this is because of relatively uncontrolled environment of the field setting. Literature review is required because this study is a field study and extra care has to be taken. By doing literature review, researcher can then adopt constructs from past literatures which were conducted in field setting.
By conducting this study, the researcher will try to understand the determinant of attitude and intention toward music piracy. Older literatures on music piracy intention were reviewed to understand the scholarly thinking and models that were developed to study music piracy intention. The researcher reviewed recent literatures as the basis to construct the theoretical model and to understand recent research findings on attitude toward music piracy.
2.1 Music piracy
Music piracy, also can defined as piracy on CDs and other recordable delivery devices. Piracy, no matter is on software, music, games, can generally define as the illegally reproduce or of copyrighted works for sale (Assenova, 2007). PC (personal computer) and the Internet access also allow individuals to find, copy, downloads, and use intellectual property without providing any payment for it (Higgins, Wolf and Marcum, 2008). Illegal sales of music or can defined as music piracy on CDs, DVDs and CD-Rs today account for a loss of over $4.5 billion dollars annually according to a recent report released by the International Federation of the Phonographic Industry (IFPI), the leading world music trade researcher (Assenova, 2007).
According to S.Bhattacharjee (2003), novel online file sharing technologies may be the cause that created new market dynamics and gave a great challenge to the music industry to attract remaining customers. Peoples have created many different online networks to exchange audio files at little or even no cost, has led to millions of sharing around the world, illegal copies of music files and caused the sales losses or even destruction to the industry.
Legal efforts to counter or reduce the music piracy trend have lagged the advances in technology. With the current technologies, there are no proper ways to fight with these criminals. The music industry is one such business sector that has been dramatically affected by the online sharing, CDs duplicating or other music piracy phenomenon. From former studies I found, most of it shown that approximately 10 million consumers actively download digital music files from the Internet, and 49% of their online activities involve music or audio files. (S. Bhattacharjee et al., 2003).there are various different kinds of way to get involved in music piracy , for example, CD burning, peer-to-peer networks, LAN file sharing, digital stream ripping. Because of this, the perception of a victimless crime is created. However, music piracy is far from a victimless crime and has been described as “the greatest threat facing the music industry today”. (Higgins et al., 2008)
Referring to T. Ramayah (2002), music piracy refers to unauthorized copying which could be classified into 3 ways, which will be explained further as below.
2.1.1 Simple piracy
The activity pertains to the unauthorized duplication or downloading of an original recording for commercial gain without the acceptance of the owner or creator. Redesign the casing of the pirated copies and make it different from the genuine. The pirated versions are often renamed, such as the “greatest hits” of a specific artist, or a collection of a specific genre or the “popular dangduts” of Malaysia, or other countries.
These are products copied and packaged to imitate the original or genuine as closely as possible. The original producers or creators trademarks and logos were copied also on the casing in order to mislead the consumer into believing that they are buying an original product.
Which also known as the unauthorized recordings of live or broadcast performances. Videos were taken and copied and sold often at a premium or higher price without the permission of the singer, composer or recording company.
Attitude has long been identified as a construct that guides future behavior or the cause of intention that ultimately leads to a particular behavior. (T.Ramayah, 2008). Based on Bagozzi’s (1992), attitude toward the act is an emotional response, whereas behavior is a coping strategy.
Attitude is referred to as the evaluative effect of positive or negative feeling of individuals in performing a particular behavior (Fishbein and Ajzen, 1975). Another definition of attitude is the degree of favorableness and unfavorable of an individual’s feeling towards a psychological object (Fishbein and Ajzen, 1975).
The attitude toward the act, the degree to which a person has a favorable or unfavorable evaluation or appraisal of the behavior in question, is normally proposed to be the major determinant of behavioral intention (Ajzen and Fishbein, 1975). Gopi and Ramayah (2007) found that attitude had a direct positive impact on intention to use an online trading system. In fact, many studies have shown the significant effect of attitude towards intention (Davis et al., 1989). In this study, the attitude toward music piracy can affect the behavioral intention of music piracy. In fact, attitude serves as the mediator between music and other independent variable. The better the attitude toward music piracy, the greater the behavioral intention to get involve in music piracy activities.
Celebrity idolization can be an important means for self-concept maintenance (Dimanche and Samdahl, 1994). As mentioned by Alperstein (1991), the pseudo-interactions between fans and celebrities provide great meaning to a fan involved in an imaginary social relationship with celebrities. For example, a Michael Jackson’s album brings more meaning to his fans compared to other people. Research in sports marketing also suggests that fans become loyal to a particular team because of the sense of identity felt by associating themselves with a particular group (Wann and Branscombe, 1993).
In fact, purchasing and using the merchandise produced by or named after a celebrity can enhance the identity of a fan toward the celebrity (Jenson, 1992). More importantly, to be a loyal fan, a consumer has to manifest worship behaviors such as purchasing the copyrighted album, collecting artifacts, attending related events, and writing letters (Raviv et al., 1996). A person who chooses pirated music CDs rather than the copyrighted album is not considered as a true fan. Since the fan group exerts significant influences on its members, music piracy behavior toward the music product of the idol singer or band won’t be tolerated among the fan group (Einerson, 1998). Hence, the idolization of singer or band has significant effect toward music piracy. If singer or band idolization is high, it is unlikely for the fans to involve in music piracy activities.
Idolization of singers or bands is based mostly on two important components, which is worship and modeling. Steven Bonner and Eleanor O’ Higgins (2010) say that worship refers to an unusually intense admiration and reverence of an idol. Moreover, some researchers defines modeling as, that kind a desire to look like their idols or bands, which may cause them to imitate their idols figures by copying their dressing fashion, hairstyle, behavior and subsequent codes of behavior. Steven and Eleanor (2010) also explained how those peoples behave because of idolization. It can be seen as a series of unusual actions which involves activities such as listening to music in a group, collecting records, or joining official band web sites to make they feel like a true fan. Therefore, it is very likely that idolization of a singer will effects the music piracy issues.
2.4 Attributive Satisfaction
If consumers are satisfied with original music CDs quality and price, music piracy may be reduced. Individuals have different perceptions about the sound quality of online digitized music (Gopal and Sanders 2003). Some consumers may think that original music CDs is of better quality compared to those pirated CDs or downloaded MP3. Gopal and Sanders (2003) also have the opinion that the sound quality of an original CD is superior to a compressed digital version.
Why compressed digital version of music track is of less quality? This is because when music is compressed and converted into the MP3 file format, the audio bit rate falls (Lam and Tan 2001). Further, the download process itself may lead to file corruption and incomplete downloads, further deteriorating files and sound quality (Das, 2000). Thus, the audio quality of digital music downloaded over the Internet may be lower than the audio quality of the original CD (Das, 2000). While some cannot discern any difference in quality between compressed digitized music and original audio CDs, others are more likely to purchase a CD than to download the music (Gopal et al. 2002). Besides, Fetscherin and Zaugg (2004) provided preliminary evidence illustrating the difference in the quality of online music files, and the discouraging effect this had on music downloading.
Quality of online music alone was not a significant determining factor influencing individuals to download music (Gopal and Sanders 2003). However, Gopal et al. (2002) showed that the perceived quality of online music files had a significant negative correlation with the level of music files being downloaded online. Gopal and Sanders (2003) administered an online music experience survey which indicated that over 60 percent of respondents had experienced corrupted downloads frequently or at least occasionally.
2.5 Perceived Prosecution Risk
The perceived deterrent effect focuses on “disincentives”, in the form of punishment or the threat of punishment, against committing a deviant act (Blumstein, Cohen and Nagin 1978). The theory explains the effect of these “disincentives” on deterring others from committing criminal behavior (Blumsteinet al. 1978). The theory predicts that when the risk of punishment is high and penalties for violation are severe, potential offenders will be inhibited from committing a deviant act (Kwong and Lee 2002).
The perceived prosecution risk is similar to perceived effectiveness of deterrent. Kwong and Lee (2002) found that the perceived effectiveness of deterrence was significant in negatively affecting an individual’s attitude and behavioral intention to illegally download online music. This proved that the perceived prosecution risk is useful in determining the attitude and thus the intention of unauthorized duplication of music files and purchases of pirated CDs.
While criminal sanctions may constrain consumers’ decision to engage in piracy, there may be countervailing forces, such as the desire to perform deviant behaviors or group pressure to acquire illicit goods (Albers-Miller, 1999). However, prosecution has been widely used in countering music piracy.
For example, record companies have undertaken a multi-pronged response to the explosion of online music downloads (Iser and Toma, 2003). Some industry groups brought suit against popular file-swapping services (Iser and Toma, 2003). They used legal measures to shut down web sites and prosecute illegal Internet file-swapping services (Iser and Toma 2003). However, it was soon realized that a range of different strategies would be needed to more effectively stop the problem (Iser and Toma 2003). Hence, some industry groups are now prosecuting individuals who use file-swapping services (Bakker 2005). These recent literature has shown that perceived prosecution risk has a negative effect towards purchasing and duplicating music files and CDs.
2.6 Social consensus
Social consensus was described as the level of social agreement about the goodness or evil of a proposed act (Jones, 1991). This may include the agreement of the society in large or of family and friends of the decision makers. In the aggregate, the evidence indicates that moral intensity may be important and that two dimension of moral intensity, social consensus and the magnitude of the consequences may be more significant than others (Morris and McDonald, 1995). Interestingly, perceived social consensus is the strongest predictor of moral judgments (Morris and McDonald, 1995). This shows that people care about what others think of their action and take other people’s perception in their decision making process. For example, if a person’s family and friends think that music piracy is unethical, he may feel bad about purchasing a pirated CD and this may negatively affect his behavioral intention to involve in music piracy. If peoples or friends around a person were fans of certain bands or singers, music piracy may leads to negative issues because that person may consider as hurting their idols.
Social consensus regarding what is good or evil, relative to a particular issue, is a major determinant of what should be done in the judgment of the decision maker (Morris and McDonald, 1995). The significance of perceived social consensus in this study is consistent with Trevino’s (1986) contention and prior research (Weber, 1990) that American managers operate at Kohlberg’s (1969) conventional level of cognitive moral development (Morris and McDonald, 1995). The significance of perceived social consensus implies that we can improve the goodness, justness, and/or fairness of decisions by informing or reminding organizational decision makers of the social consensus regarding various ethical issues (Morris and McDonald, 1995). If the public were made aware of social consensus toward music piracy, the overall behavioral intention of involving in music piracy may fall. Researcher can say that perceived social consensus negatively affect the attitude and behavioral intention toward music piracy.
2.7 Degree of seriousness of the Consequences
Degree of seriousness of consequences is defined as the aggregated harm done to victims of the moral act in question (Chiou et al., 2005). Victims of the act consist of direct victims who were directly affected by the moral act and indirect victims such as society or country. The obligation to act in a situation, or the moral imperative, was related to the seriousness of the ethical consequences that would flow from the situation (Jones, 1991). If the ethical consequence is more serious, the likelihood of the particular decision being made will be lower. The magnitude of consequences is constantly found to have significant effects on an individual’s moral judgments (Chiou et al., 2005).
At the macro level, piracy directly hurts the economy in several ways, such as by reducing the total number of jobs, eroding the tax base, and leading to economic stagnation (Tom et al., 1998). Individuals who are aware of these consequences will be less likely to involve in music piracy. However, most of the public often fails to identify these consequences as it is not directly related to them. Second, the economic health of copyright holders is seriously affected by piracy in terms of losing sales and undermining a firm’s profits (Tom et al., 1998). Music recording companies and singers or bands are the direct victim of this consequence. Their profit is illegally snatched away by music piracy activities. Third, piracy reduces business incentives to invest in innovation and brand building (Nill and Shultz, 1996). Music piracy causes the incentive and motivation of music recording companies and singers or bands to fall. Music recording companies will have to think twice before investing in new album as they may suffer great loss due to music piracy. Finally, piracy fosters the growth of illegal activities by providing easy dollars to criminals (Delener, 2000). These music piracy criminals can raise their fund for other underground business easily through music piracy.
If these serious consequences are made known and perceived as true by a person, his or her intention to get involved in music piracy may get weaker. This is because these consequences may change their attitude toward music piracy to negative.
2.8 Summary of literature review
Valentina Assenova ; 2007, ‘determinants of music piracy divide’, Issues for economy politic, Vol 16, 1-2
George E. Higgins, Scott E. Wolf and Catherine D. Marcum; 2008, ‘Music Piracy and Neutralization: A Preliminary Trajectory Analysis from Short-Term Longitudinal Data’, International journal of cyber criminal vol 2(2); 324-336
Sudip Bhattacharjee, Ram D. Gopal, Kaveepan Lertwachara and James R. Marsden; 2003, ‘ No more shadow boxing with online music piracy: Strategic business models to enhance models’ 1-2
Ramayah Thurasamy, osmand muhamad, mohamad jantan, Jason lee wai chow; 2002, ‘ counterfeit music CDs: social and personality influences, demographic, attitude and purchase intentions; some sights of Malaysia’1-2
Singer / band idolization
Alperstein, N. A.: 1991, ‘Imaginary Social Relationships with Celebrities Appearing in Television Commercials’, Joumal of Broadcasting & Electronic Media 35(1), 43-58.
Dimanche, F. and D. M. Samdahl: 1994, ‘Leisure as Symbolic Consumption: A Conceptualization and Prospectus for Future Research’, Leisure Sciences 16,45-53
Wann, D. L. and N. R. Branscombe: 1993, ‘Sports Fans: Measuring Degree of Identification with Their Team’, Joumal of Sport Psychology 24(January/March), 1 – 17.
Jenson, J.: 1992, ‘Fandom as Pathology: The Consequences of Characterization’, in L. A. Lewis (ed.). The Adoring Audience: Fan Culture and Popular Media (Routledge, London), pp. 9-29.
Raviv, A., D. Bar-Tal, A. Raviv and A. Ben-Horin: 1996, ‘Adolescent Idolization of Pop Singers: Causes, Expressions, and Reliance’, Joumal of Youth and Adolescence 25(5), 631-650.
Einerson, M. J.: 1998, ‘Fame, Fortune, and Failure: Young Girls’ Moral Language Surrounding Popular Culture’, Youth & Society 30(2) 241-257.
Steven Bonner and Eleanor O’Higgins; 2010,’ Music piracy: ethical perspectives’, 1341-1342