The Recording Industry Association of America has recently threatened college students that use peer-to-peer file sharing programs to download music illegally.  Since the days of Napster, file-sharing software has been the bane of the music and software industry.  Recent advances in technology and software have made it easier to download movies, much to the chagrin of the Motion Picture Association of America.

In an open letter posted on InsideHigherEd.com, Mitch Bainwol, chairman and CEO and Cary Sherman, president of the Recording Industry Association of America explain their position.  “[T]here is broad understanding of the impact from this activity, including billions of dollars in lost revenue, millions of dollars in lost taxes, thousands of lost jobs, and entire industries struggling to grow viable legitimate online market places that benefit consumers against a backdrop of massive theft.”

Thousands of lost jobs?  Did this mean music companies would be forced to fire bands?

As a music junkie, I found it disturbing to think of my favorite bands standing in an unemployment line rather than producing new albums.  I quickly emailed my friend James Spartz, lead singer of Jim James and the Damn Shames asking if he thought file-sharing would eventually put him out of business.

Spartz returned my email and assured me that I had little to worry about.  “I don’t think file sharing will impact the business end of what I’ve been doing.  Although, it is nice to get a check in the mail every couple of months from CDBaby for $25 bucks or so from digital downloads sold through places like Rhapsody, iTunes, or wherever.”

If the artists do not account for the loss of jobs, it must be the employees at record companies that are taking the hit.  However, in researching the stockholder information and press releases for Universal Music Group and EMI, there has been no significant turnover in the past three years at either company.

So where are these “thousands of lost jobs” taking place, and would the same effect be felt by other institutions?  Would software companies stop making the applications I use daily?  Would Hollywood cease to exist?

I found the answer in an article on the website TorrentFreak.com that tells the story of Tony, a businessman that was adversely effected by the popularity of file-sharing.  “Tony used to enjoy the finer things in life – a beautiful house, high performance cars, exotic foreign holidays, up-market restaurants and fine wine.”  The article describes how Tony now operates a forklift in a factory that makes boxes.  “We’ve moved to a smaller house and I’ve had to get a sensible car. Things have changed quite a lot,” says Tony.

Tony made his fortunes by selling pirated compact discs at flea markets and pubs in the United Kingdom.  Business was good, and Tony was taking home around $2,000 per week.

With the popularity of file-sharing, Tony’s life and business changed. “When you asked a customer why he wasn’t buying anything, 9 times out of 10 it was ‘BitTorrent this, LimeWire that.’ Add that to the fact that huge numbers of PC users have burners and fast broadband and its obvious why I had to get out and earn a living another way. We had it good for a while but I don’t think those days are coming back.”

Next time you contemplate downloading the latest movie or album using a file-sharing program, consider the consequences.  Think of  the salesman on the New York sidewalk selling the latest Hollywood movie on DVD while it is still in the theater, the person selling CD’s outside the concert for a fraction of the price, and Tony.  It may be their job next.