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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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By Daniel8uk on 7/14/2010 9:04:43 AM , Rating: 1
The whole industry needs to move to a new system, something along the lines of Spotify, ever since I started using it I haven't downloaded one album. The plain and simple truth is that it's incredibly easy to get hold of music and listen to it, while also having some pretty damn good features for finding new music.

As it stands there are quite a lot of albums on Spotify that aren't available to certain people solely down to the labels dictating what country Spotify can and cannot stream too, which is a bit silly in this day and age.

Moving to this type of system would inevitably cut costs, but also it would cut revenue income so most major labels would have to downsize a little, which every company has to do if they want to survive and go on into the future, perhaps getting rid of the RIAA would be enough to save job losses, after all they spent an excessive amount of money to perform a bad PR job, increase piracy, make a few lawyers richer, penalise some old people and mothers and basically got nothing what so ever out of it.

In fact if the whole media industry moved to this type of free-ad-sponsored content then perhaps they would have some way of offering the pirates and people who can't afford content the chance to get free content, while still making money from the companies who buy advertising time.

Of course this will never happen as you couldn't pay a film star $30 Million, while having investors pour in $300 Million and still expect a profit, of course the money could be better managed but can you honestly see an A-list actor doing a film for $5 Million or less?




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