Online music piracy's controversy: pay sites versus free, who will prevail?

Online piracy may substantially undermine intellectual property rights of digital goods. There is much controversy concerning the issue of music piracy over the internet and the implementation of new information technology in Customer Relationship Management (CRM) with the rebirth of Napster and other pay sites. In particular, the exchange of Peer-to-Peer (P2P) electronic commerce is fast gaining acceptance in the user community. This paper concentrates on the music industry. In recent years, with the rapid growth of the internet, the situation of music piracy has become increasingly serious. File-sharing technologies have created new market dynamics and posed a great challenge to the music industry to try and retain customers. Consumers have created anonymous online networks to exchange audio files at little cost. This has led to millions of shared, illegal copies of music files and related sales losses to the industry. Legal efforts to counter this trend have lagged the advances in technology. Factor analysis and related hypothesis-testing procedures of 285 professionals in the service sector in the Pittsburgh, PA have uncovered several interesting scenarios of traditional music store selling with those of online-based strategies.