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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From their viewpoint...
By TheEinstein on 7/14/2010 3:43:12 PM , Rating: 2
Seems I have to be devils advocate here.

If the lawsuits stop 2% of illegal downloads and ends up with 0.5% (guesstimate) of the illegal downloads turning into purchases they make more than they spend.

Think about their viewpoint.

RE: From their viewpoint...
By bigdawg1988 on 7/14/2010 8:28:07 PM , Rating: 2
I have to agree with your there. I think most people think the RIAA is some private company that only makes money from the fees they get from pirates they catch. The RIAA IS the music industry. Sony, EMI, Universal, and Warner are the big boys and they run the industry. They could give a damn about spending $64M to get $2M. They made $10b in 2007 so they spend less than 1% on lawsuits. A mere pittance. They are some evil bastards, but they are a free-enterprise company. Funny people on this board don't see it that way when music/movies are involved. It's the artists that are being screwed too (look up ASCAP/BMI), but they have no chance since they're all divided, and the big boys have conquered. That's why broadcast radio is bad and getting worse.
I can't stand the RIAA and their policies, but Jason is missing the point. They don't make money from filing lawsuits, they get money from misleading the artists and fans and raking in the dough! Think about how many of you would be downloading pirate songs now instead of buying them, or subscribing to rhapsody, pandora, etc., if the RIAA hadn't started cracking down on downloading? Get my point?

Do you know ASCAP/BMI spend 20% of the money collected for royalties on "expenses?" And since they own royalty collections there's not much anyone can do. This is one business(royalty collection) that should be taken over by the IRS. See link below for more info.

"There's no chance that the iPhone is going to get any significant market share. No chance." -- Microsoft CEO Steve Ballmer

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