This did not end the matter, of course, and appeared to be addressed more at the copier than at sites facilitating sharing, which would become the next target. File Sharing Services

Napster was the best known but hardly the only website devoted to facilitating file sharing among subscribers. After the courts caused Napster to shut down, at least in its original form, other sites emerged to take its place. A court ruling against two peer-to-peer file-sharing networks created a sense of uncertainty even as other sites took their place, and critics charged that such rulings were stifling innovation and making the next generation of computer uses less sure, to the detriment of all (Zeller C1).

The top five companies are unified in the Recording Industry Association of America (RIAA), the group that sued Napster to stop the trading of copyrighted music online (though this suit was only the first of many). This is one of the ways these companies control the music -- through associations which promote their interests. More generally, though, these companies have a lot of money and a well-established list of artists with considerable appeal. They produce and distribute the records of these artists and gain power as a result, meaning that if they want to get certain lesser artists heard and stocked in stores, they can do so because their popular artists give them leverage. They also take up a large percentage of shelf space in record stores for the same reason, which also has the effect of keeping lesser known labels out of these stores.

The process has long required a huge organization, large outlays of money, and related business support, and these companies have developed just that over the years. First, the companies find and sign artists to contracts. Then, they have to pay for the recording session and related production expenses to make a record. Once the recording is done, it is fashioned into an album (today, a CD) with all the expenses involved in this process, from the pressing of the CD to the creation and manufacture of the covers. Tracks are selected for promotion and are released to radio stations for air play. Money is spent on promotion and advertising, and the CDs are distributed to record companies across the country. This suggests the steps the process has included for decades: singer to label to distributor to retailer to media outlet to consumer.

Napster reduced the number of CDs that are sold by giving music consumers a different way to get the same material, a way that involved no cost to themselves. The RIAA began filing suit against some of the consumers who could be identified as having placed files on Napster, and the RIAA continues to sue such users of other file-sharing services as well. In time, the RIAA and other entities also sued Napster and forced the company to stop its file-sharing operations. As the court case proceeded, however, the role of Napster and similar sites remained uncertain as far as legalities were concerned, but the decision would eventually hold that "distributors of popular software for sharing music and videos online can be held responsible for theft if they encourage or induce their users to illegally swap copyrighted works" (Krim A01). The ruling was unanimous on the part of the Supreme Court, assuring that the rule would be understood and followed from thereafter. However, the issue is still not fully settled, and there are many other types of file-sharing that may have to be litigated separately before the issue is settled. As both sides not, though, the technology changes so rapidly that any one court decision may have only minimal effect in the long-term.

Yegyazarian points out how the Grokster case, the second file-sharing decision, ended speculation about the legality of file-sharing as performed by Grokster, Napster, and StreamCast, among others. This area of the law is uncertain because the technology is new and has not yet been addressed by the legislator to the degree needed, so such court decisions help clarify the law and point to how everyone involved should behave. Still, many saw this decision as having a chilling effect on technical innovation, and the reason for this was said to be because "the court introduced a new standard for judging a company's liability when it makes products that can be (and then are) used to violate copyright," the standard of "active inducement" (Yegyazarian C1).

A legal analysis emphasizes this same idea and states...

Green and Woellert note this when they state that the ruling does not create a clear standard and that it may be years before the issue is made more certain, a fact which can damage the level of innovation achieved in the meantime:
While it will take courts years to define the precise boundaries of the ruling, many entrepreneurs don't have the luxury of waiting (para. 3).

Certain new technologies are already in the works and may not be rolled out given the uncertainties of this decision.

Future Concerns

As the recording industry fights file sharing, the motion picture industry sees its own future as being much the same, with digital copying making it possible to send movies across the Internet with virtually no quality loss. What is slowing down this process at the present time is the need for more bandwidth to transmit files of that size. Music files are much smaller and more easily transferred, while films require more bandwidth and more storage once transferred. This is a problem that will work itself out over the next few years, and then the issue will become as vital as that of music sharing today.

The Grokster ruling is interpreted as a win for movie studios as for recording companies because facilitators can now be held liable. It has been predicted that the ruling would be more ambiguous and that congress would have to address it, but the decision made that temporarily unnecessary. However, how the lower court applies this new standard may make a big difference (Sweeting paras. 1-4).

What this decision will mean remains unclear, as numerous observers have noted:

It's unclear how much the decision will actually deter the widespread problem of piracy since software programs created abroad won't be subject to the tougher U.S. copyright laws. Still, analysts say the court's stern rebuke should provide a boost to many file-sharing services that offer legal downloading for a fee (Supreme Court Rules Against File-Sharing Services para. 15).

Another front in this battle can be found on many campuses, seen as hotbeds of file sharing so that many universities are making rules to punish those using school computers for file sharing (Riddle para. 1). One reason for this is liability, as Josephson notes when reporting that the RIAA filed suit against seven University of California at Los Angeles students and threatened to sue the university as well.

Effects

The effects of DRM have not always been as intended. DRM built into CDs ran into trouble with the Sony case from 2005. In the Sony BMG case, it was revealed that "the Sony people took extreme steps, to the point of jeopardizing customer's computers, to ensure that the only thing you'll retain when playing one of their CDs is the memory of the music - and not, heaven forfend, a copy of it" (Shamah 18). A computer user examined his system and found that Sony had embedded "rootkits" on some CDs and that these had been transferred to the computer of users who played the CD on their system. "Rootkits" are usually programs secretly installed on a computer to take it over. In this case, these programs were part of the company's copy protection scheme to prevent "excessive" copying so that after the user has copied the CD three times, a system called First4Internet prevents further copying. As one journalist wrote, Sony might have the right to protect the music it sells, but the use of the rootkit was hidden from the consumer and could damage the user's computer:

Now it was no longer a matter of protecting digital files from being copied. Instead, customers' computers were at risk because inadvertent or intentional removal of the software - which, remember, had surreptitiously installed itself in the first place - could cause significant damage to a computer's ability to use its CD! In fact, the company was actually misleading customers, according to some customers who checked out the secret software's activities. (Shamah 18)

Viewed another way, though, such a move was only in keeping with the way music companies have addressed the situation from the first. They have been clinging to their old business model even as the business and the audience have shifted to a different model, and to protect the old way, these companies have essentially…