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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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.

“Then they pop up and say ‘Hello, surprise! Give us your money or we will shut you down!' Screw them. Seriously, screw them. You can quote me on that.” -- Newegg Chief Legal Officer Lee Cheng referencing patent trolls

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