Print 51 comment(s) - last by mithunchetan.. on Jul 28 at 1:50 AM

The cold hard numbers show the RIAA's legal campaign to be about as successful financially as burning money in a pit.  (Source: Views Skewed)
"That does not make sense!"

In the infamous Recording Industry Association of America's (RIAA) 2008 IRS tax filing, the organization revealed the stunning financial futility of its battle against piracy.  The document[PDF], obtained by P2PNet, reads like a lawyer's dream and like a financial officer's worst nightmare.

At the end of the day, RIAA paid Holmes Roberts & Owen $9,364,901 in 2008, Jenner & Block more than $7,000,000, and Cravath Swain & Moore $1.25 million to pursue claims against music pirates.  That's a total of over $17.6M USD.  And there were more law firms listed -- those were just the top three fees. 

In return, it received a mere $391,000 USD in compensation from its pirate victims.  In other words -- the RIAA spent over 45 times on lawsuits and threats than what it received in return.

The document proves similar to those obtained from past years.  For example in 2006 the RIAA in excess of $19M+ USD in legal fees and $3.6M USD investigative fees to pull in $455,000 (Source [PDF]).  And in 2007, it recovered $515,929 after spending $21M+ USD on legal fees and another $3.5M USD on its investigation (Source [PDF]).

In total, from 2006 to 2008 the RIAA spent $64M USD to make $1.361M USD.

Unless you're an electric car company, those kind of financials would typically spell the end of your company or organization.  However, the music industry seems more than happy to keep pouring money into the hole, as they feel they're overall preventing an even greater loss of revenue at the hands of pirates.

Unfortunately for them this may not be true at all.  Time and time again studies have shown that pirates will continue to pirate music and movies despite the RIAA's best efforts.  Piracy shows no sign of slowing down, despite all the lawsuits.  And likewise BitTorrent traffic continues to grow.

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And .. 3.. 2.. 1..
By dajeepster on 7/14/2010 9:02:30 AM , Rating: 5

i wish i had something more worthwhile too say.. but there.. oh hold on.

RIAA: We need to go after more pirates to pay for the lawyers.
Shareholders: WTF?!

RE: And .. 3.. 2.. 1..
By superPC on 7/14/2010 9:32:37 AM , Rating: 4
humans are not the most logical species indeed.

wouldn't it be more logical to spend that 64 mill in building a better online pricing scheme? looks to me services like hulu, last fm, and the rest make some fine profits. if the music industry spend that 64 on a killer internet portal for music they would have seriously reduce piracy by now.

RE: And .. 3.. 2.. 1..
By quiksilvr on 7/14/2010 10:15:55 AM , Rating: 4
They don't want to do that because we already have:

1) Grooveshark
2) Rhapsody
3) Pandora
4) imeem

Honestly, would YOU go to an RIAA music portal? I sure as hell won't.

RE: And .. 3.. 2.. 1..
By BladeVenom on 7/14/2010 10:26:44 AM , Rating: 4
Just avoid supporting the RIAA.

The RIAA and its members treat their artists worse than the pirates.

RE: And .. 3.. 2.. 1..
By quiksilvr on 7/14/2010 4:07:08 PM , Rating: 2
No wonder they care so much more than the musicians...

RE: And .. 3.. 2.. 1..
By bighairycamel on 7/14/2010 10:31:41 AM , Rating: 5
It's pretty clear the MAFRIAA is trying to use scare tactics to curb pirating and they knew from the start the costs would greatly excede damages won. They were hoping enough pirating would be stopped to generate actual music sales to increase revenue.

Obviously, we know it isn't working. Now it's just a question of how long will they keep trying before they give up. A "not for profit" agency can't keep this up forever.

RE: And .. 3.. 2.. 1..
By inperfectdarkness on 7/14/2010 9:49:46 AM , Rating: 5
as with malpractice suits, frivolous class-action suits, patent-troll suits, etc; the only parties benefitting are the lawyers.

an american businessman, a russian businessman, a cuban businessman and an american lawyer were all riding on a train together. after much discussion and friendly banter with the group, the russian businessman gets up, pulls a bottle of vodka out of his briefcase, pours each man a glass, and throws the remainder of the bottle out the window. the american businessman asks him why--even though the russian economy is suffering--he can afford to waste vodka. the russian businessman replies, "we have more vodka in russia than we could ever drink in several lifetimes."

upon seeing this, the cuban businessman gets up, pulls a box of cigars out of his briefcase, hands one to each man, and throws the rest of the box out the window. flabbergasted, the american businessman asks him why--in spite of the dreadful state of affairs that cuba is in--can he afford to waste cigars. the cuban businessman replies, "in cuba, we have more cigars than food...and every citizen can get them for free."

the american businessman pauses several moments for reflection. then he gets up, and throws the american lawyer out the window.

RE: And .. 3.. 2.. 1..
By djc208 on 7/14/2010 1:41:34 PM , Rating: 2

For every leagal justice some lawer achieves 100 more are causing more harm than good, and keeping most of the money involved.

RE: And .. 3.. 2.. 1..
By erple2 on 7/14/2010 2:22:37 PM , Rating: 2
I think it's the other way around - for every 100 lawyers that achieve legal justice quietly, one blows up into causing more harm than good, keeping more money than due in the process.

For every 100 people I drive with on the highway, that 1 person drives like a psycho-jerk. That leads me to make the loud and incorrect assessment that everyone on the highway is a maniac.

RE: And .. 3.. 2.. 1..
By Archibald Gates on 7/14/2010 3:10:54 PM , Rating: 4
Why should i pay for low quality mp3's?
Or CD's where i only like 2 or 3 songs and the rest is just crap?

I will not pay for low quality music.
I will not pay for over-priced CD's so i can get "3" songs off the disc and have to pay also for the other crap that i don't want.

I would love to pay for HIGH QUALITY uncompressed music!
I would love to buy a CD in a store where i could get only the songs i really want and not all the other crap they try to sell.

They should rather use the money to build a web portal where you could download all the music and i mean ALL OF IT in high quality uncompressed formats.

Until they offer something that torrents don't offer, and that is High quality music (uncompressed formats), ease of use, and a place where you can get every song you want. Until that time there will always be piracy!

RE: And .. 3.. 2.. 1..
By erple2 on 7/14/2010 3:48:23 PM , Rating: 3
I'll take lossless compression, too...

RE: And .. 3.. 2.. 1..
By icanhascpu on 7/14/2010 6:05:56 PM , Rating: 3
I think you're confusing "uncompressed" with "lossless" There is no intrinsic advantage in sound quality when you say "uncompressed". It reminds me of back in the day when radio shack was just getting into the digital TV era and the salesman was spouting how it was great "digital quality" picture. Digital quality? Really? What the hell does that even mean? :D

RE: And .. 3.. 2.. 1..
By afkrotch on 7/14/2010 8:22:33 PM , Rating: 1
It's called Japan's music industry. All the songs happen to be released as singles first. Each single will have a total of 2 songs and 1 instrumental (main single, coupling song, and main single instrumental), costing you roughly $12.

After about 4-5 singles are release, an album will be released. This album will be all the main singles combined with none/some of the coupling songs. Also maybe 2-3 brand new songs. The album will cost you $30.

$16 for a CD in the US. Pfff, you have it easy and you still complain like little bitches.

RE: And .. 3.. 2.. 1..
By zmatt on 7/14/2010 9:59:19 PM , Rating: 2
Yeah but if all the songs on the album can stand alone as single then it must be a pretty good album.

I think the bigger issue here is that with technology where it is there is no technical reason I shouldn't be able to walk into a record store and "make" a cd with the songs I want on it and pay for those individual songs. The price of each song being something like $.50 since the overhead is almost non existent. the store would comprise mostly of hard drives, blank cds, cd burners and then stations to hear new songs that you may want to buy.

RE: And .. 3.. 2.. 1..
By bigdawg1988 on 7/14/2010 8:36:08 PM , Rating: 1
The RIAA is laughing their asses off at YOU!
They made over $10b back in 2007 (don't know current figures) so they could give less than a damn about paying $64M for lawsuits when they would be making a lot less. Think about Rhapsody, itunes, napster, pandora, winamp etc., and all the royalties they get from those guys combined. Now imagine there was no limit to pirate downloading and you'll understand that none of them (well, except the OLD Napster) would exist to make them money. I don't agree with their figures (tens of billions or whatever), but it has to be in the hundreds of millions each year. Well worth that little $64m they spend on their attack dog lawyers. Sorry Jason, but you're just stirring up the masses. Nothing to see here, move along.

I agree that the RIAA sucks, but they don't give a ....!

"When an individual makes a copy of a song for himself, I suppose we can say he stole a song." -- Sony BMG attorney Jennifer Pariser

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