History of Downloading Music

1. Music Distribution Industry

Recording industry experiences revolution as it faces the challenges from peer-to-peer technology that enables downloading MP3 music format from a remote host in Internet. Prior to the internet era, the music distribution is subject to the recording label. However, in web-based supply chain model, recording labels are massively legalizing licensing strategy that significantly fire up a legal digital music subscription (in contrast to Napster that was illegal).

Figure 1	Web-based Supply Chain of recording companies

Source: Daugherty, 2002

2. p2p-providing Companies: The Illegal Music Downloading

2.1. Napster Napster is an example of popular file sharing media that has been terminated due to the legal action performed by musicians, pioneered by Metallica, a famous heavy metal band, which protests such file sharing action due to the elimination of royalties that musicians must obtain. However, the termination of Napster does not stop others to set up new websites that enable the file sharing; they include the multiply.com etcetera. Similarly, Scott (2001) and Dong et.al (2002) reveals that file sharing remains a popular services due to their offering for free downloading music and video.

2.2. Kazaa

Similar to Naspter, Kazaaa also carry out the same operation with Napster that enables a user to share music in MP3 format over the Internet. However, the difference is Kazaaa service is not limited to share MP3 since it also enables users to share other type of files like documents, videos, and other applications (Figure 2).

Figure 2 Kazaa Source:

2.3. Audio Galaxy

Growth from the original objective to develop FTP site index called The Borg Search, www.audiogalaxy.com turns out to be a robust peer-to-peer system that provide free client software at. The popularity of audiogalaxy rose quickly following the termination of Napster in 2001. Another key feature that audiogalaxy provides is the generation of community among the company customer. The community is carried out through chat-enabled groups and per-artist internet forums. At this time, although the music sharing is no longer exist, the company still activate some message boards.

Figure 3 Features of iPod that improve relationship with customers. Source: www.apple.com 3. Legal Music Downloading

The popularity of portable music player from Apple, iPod, has created the demand form providing the legal contents since the number of iPod owner reaches more than 15 million iPods, in addition to other owner of similar iPod model (iPod, 2005). In order to present legal music download, Apple also offer the iTunes where users of iPod can download the music with a price.