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“Enforcement campaign” costing more than it brings in

The trial proceedings of Capitol Records v. Jammie Thomas are continuously proving their worth as a fascinating insight the RIAA’s 4-years-and-counting campaign against P2P users.
 
One such insight: despite the fact that a vast majority of the RIAA’s nastygrams result in settlements amounting to a few thousand dollars, Sony’s Jennifer Pariser admitted under oath that the RIAA has spent “millions” of dollars on the campaign and, more importantly, “lost money on [the] program.”
 
But really, could it be any other way? Surely, between the RIAA’s own lawyers and the enforcers that they hire (SafeNet, MediaDefender, etc) the costs per settlement are far in excess of whatever measly amount the RIAA can settle for. Perhaps the RIAA could try to settle for more, but unfortunately for them $2,000 - $6,000 seems to be the sweet spot; raise it any higher and more people may opt to go to court, sending legal costs through the roof.
 
It’s important to note that the RIAA’s “enforcement program” is designed to settle infringement claims quickly, giving defendants multiple opportunities at settlement before going through an expensive court trial. This system – which seems to be working modestly, if unprofitably, well and even allows payment online – is perhaps the best manifestation of the above conclusion. After all, lawyers are expensive, why involve them in anything more than you have to?
 
I’d also wager that in its haste, the RIAA ends up cutting many expensive corners, like not going through the lengths needed to properly identify users (and then blaming the ISPs when caught), or suing dead people. These mistakes end up costing them: each one gets published and scattered along the internet’s winds, the mistake often ends up being taken to court, and the suit is eventually dropped. In turn, the RIAA files additional complaints with the expectation that they will be settled quickly and cheaply, inviting further opportunity for mistakes. It’s a vicious cycle.
 
It pleases me to see that someone in the industry finally understands that the hard-lining attitude on digital music isn’t exactly working. Mentioning EMI’s dropping DRM from its iTunes offerings – practically an invitation for piracy if there ever was one – may be beating on a dead horse, but it’s an important sign pointing towards this much-needed shift in thought. Further, the recent switch to DRM-free offerings from Wal-Mart, Amazon, or even services like Joost are, I believe, clear indicators that we are finally moving in a positive direction.



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Err, no.
By masher2 (blog) on 10/15/2007 11:41:54 AM , Rating: 4
quote:
It pleases me to see that someone in the industry finally understands that the hard-lining attitude on digital music isn’t exactly working
This statement reveals a complete misunderstanding of the purpose of RIAA's enforcement program. It has never been intended to show direct profit from its collection efforts. The goal is and has always been to generate a threat sufficient to dissuade others from engaging in downloading activities.

Is it succesful on that front? I won't offer an opinion...but the belief the program is failing because "enforcement is costing more than it brings in" is utterly fallacious.




RE: Err, no.
By BMFPitt on 10/15/2007 12:21:20 PM , Rating: 3
quote:
The goal is and has always been to generate a threat sufficient to dissuade others from engaging in downloading activities.
My guess would be that any money they made by fear-induced purchases, ten times that (at least) was lost due to the ill will generated.

Would this new movement of a handful of big-name artists have happened if the RIAA not done its best to make itself as hated as possible?


RE: Err, no.
By masher2 (blog) on 10/15/2007 12:52:47 PM , Rating: 2
> "Would this new movement of a handful of big-name artists have happened if the RIAA not done its best to make itself as hated as possible? "

Of course it would. Its a reflection of the changing face of technology, which has largely invalidated the usefulness of a label in the distribution of music.

However, remember one thing. Labels were always more about promotion than distribution...which anyone whose ever owned or worked for one will quickly tell you. So while big-name artists (who have already had millions spent to promote them) may distribute their works for free, the smaller and no-name performers are still going to clamor for label contracts.


RE: Err, no.
By ted61 on 10/15/2007 12:25:13 PM , Rating: 3
Sorry Masher, but I have a different opinion about the RIAA program. The RIAA and there hard line attitudes about music customers does run people like me away from the mainstream producers.

I have no problems paying for music that I listen too but I do not like to be threatened. The RIAA does everything they can to limit internet radio use. This stops people like me from listening to the music that I want to hear. Since I can't listen to exactly what I want to hear, I go to the independent sites and listen to artists who are not under contract and post their music for anyone to hear. When I find these sites, I chip in to help pay for bandwidth or whatever the site spends the money on.

I am one person who turned my back on RIAA products. How many others are like me? How many more will follow?


RE: Err, no.
By masher2 (blog) on 10/15/2007 12:49:36 PM , Rating: 2
> "Sorry Masher, but I have a different opinion about the RIAA program"

Your opinion isn't different. I'm not calling RIAA's enforcement effective. I'm just pointing out that calling it ineffective because its revenue collections don't outweigh its costs is sophomoric nonsense.

Your statement doesn't relate to my primary point at all. However, to respond to yours, I seriously doubt the average music buyer is "turning their back" on RIAA-labels. The average person is continuing to buy (and illegally download) the songs and artists they desire.

There really isn't any widespread movement to boycott RIAA labels. There's a few disgruntled consumers who really don't like much pop music anyway, who rationalize their declining purchase patterns as a political statement. But the people who LIKE that music still continue to obtain it...through means both legal and illegal.

Does that make the RIAA program effective? No...and in fact, I've seen little evidence that it has been. But by and large, its been primarily ignored by the average consumer. Claiming its generated any sort of widespread backlash is, unfortunately, just wishful thinking.


RE: Err, no.
By Oregonian2 on 10/15/2007 5:38:40 PM , Rating: 2
I'm just curious as to the future in the RIAA's ten year plan (surely they think long term, if only thinking). I don't mean what they'd like to see happen, but what they expect to see happen in the next ten years and whether they have a plan for that expectation (as opposed to their desired outcome). Seems like the only thing that's certain is change. Would like to be a fly on their wall (and a few others for that matter, but that's a different thread). Maybe Apple buys them. :-)



RE: Err, no.
By iFX on 10/15/2007 3:46:05 PM , Rating: 2
*Raises Hand*

I have boycotted mainstream music. I haven't purchased or downloaded any music from any mainstream label in over three years - and I don't plan on buying anything any time soon. Let them keep suing everyone, like the guys in the UK who play the radio while they fix their cars and get sued for "public performance". They will eventually lose their entire customer base.


RE: Err, no.
By Schrag4 on 10/16/2007 12:35:05 PM , Rating: 2
I think it's great that you've made a stand, but now you have to persuade the teens and pre-teens that are spending their parents money that they should sacrifice their love of music in order to fight the machine and save money that they didn't earn in the first place. Good luck with that.

I think MAsher is right on this one. If people want to listen to it then they'll either pony up or download illegally (or just listen to/record from the radio). I don't like the RIAA's tactics either, but I can't blame them. I'm not entirely sure I'd go about things differently than they are if people were stealing from me. The only thing that feels wrong to me is whether or not the punishments fit the crimes.


RE: Err, no.
By Icepick on 10/17/2007 9:32:52 PM , Rating: 2
quote:
I am one person who turned my back on RIAA products. How many others are like me? How many more will follow?

Count me in. I stopped buying CDs years ago due to the disgust I have for the RIAA's tactics to attempt to limit file sharing.


RE: Err, no.
By TomCorelis on 10/15/2007 1:16:21 PM , Rating: 3
I'm calling it a failure for far more reason than the industry's financial losses in the endeavor. The intended effect -- threat, as you say -- isn't happening. The rate of piracy is roughly the same as it was before the industry's lawsuit campaign started.

What these lawsuits are doing, however, is more important: galvanizing consumers and making martyrs of those who do get caught. Jammie Thomas is the biggest example: $222,000 in the hole, now she's receiving considerable attention at FreeJammie.com and according to her MySpace blog, has rallied over $13,000 worth of support in roughly one week.


RE: Err, no.
By masher2 (blog) on 10/15/2007 2:19:43 PM , Rating: 2
> "The rate of piracy is roughly the same as it was before the industry's lawsuit campaign started"

One could argue that, without this threat campaig, the rate of piracy would have continued to increase, though, and would now be even larger. I don't advance that theory myself, but it is a possibility.

> "The intended effect -- threat, as you say -- isn't happening."

I'd hazard a guess that, should we see a few dozen more Jammie Thomas-size awards, and that threat will suddenly take hold in the minds of consumers.


RE: Err, no.
By Master Kenobi (blog) on 10/15/2007 7:29:46 PM , Rating: 2
Hmmmm, I'm not sure about that. I don't know anyone who was pirating music that has suddenly stopped because of it, infact most of them have just gotten a little slicker in how they go about downloading such music. Stupid mistakes like "using a handle that is remotely similiar to one you use elsewhere" are not done by them.

I don't have time for music, I use the good ole fashioned radio next to my bed and the one in my car.


RE: Err, no.
By jak3676 on 10/15/2007 10:41:21 PM , Rating: 2
As weird as this is to say - I have to agree with masher on this one.

The RIAA was never set up to be profitable in their pursuit of downloaders. They are also not concerned about the negative image that sueing their own customers brings. The rates of illegal downloading are still continueing, but they are not growing exponentially as they did back in the days of the original napster either. That's about all they were really trying to do. As anti-RIAA as I am, they have had marginal success at preventing free downloading from going mainstream. I'd love to be able to say the opposite, but I can't. Any amount of negative plublicity that they've generated on-line has really not impacted their business. The general public are to uninformed to and appathetic to change.

There was a day when my pastor or grandmother may have thought it was OK to hop online and swap some songs with their friends, but they now know that isn't. We can agrue about how thing "should" be, and I'll be the first to agree that things need to change.

I do think that the overall marketplace will eventually shift to a new business model, but the old mindset will be around for years to come. The few companies that can embrace the future will probably make a killing on sales, but until someone proves a new model there will be enough nay-sayers in the corporate offices that will stick to the status quo. The RIAA will never be able to stamp out illegal sharing, but they really don't have to in order for them to claim success.


RE: Err, no.
By rdeegvainl on 10/16/2007 8:05:21 AM , Rating: 3
The pirate market can only grow exponentially for so long. It mostly grew exponentially due to the advent of the internet. Now that the majority of the people have it, they either do or don't, I don't think the slowing or stopping of the growth or pirating is due to the RIAA efforts, but just a coincidence.


RE: Err, no.
By Schrag4 on 10/16/2007 2:15:49 PM , Rating: 2
"They are also not concerned about the negative image that sueing their own customers brings."

The fact that some of the people they're suing also happen to be customers is just a coincidence. Making a statement like this is similar to saying that since I bought a car from a car lot then I can go steal another one from the same lot. If I got sued then they'd be sueing their own customer in that case.

Whether or not they're suing their own customers is not what's at issue. It's whether or not the defendant stole from them. I don't mean to sound pro-RIAA, in fact I think the punishments have NOT been fitting the crimes (as I pointed out earlier), but I don't understand how a lot of people think they should be able to pirate and then complain when they're punished, or why those people think the industry shouldn't protect its interests.

Sorry for the rant, it just bugs me when I hear people say 'sueing their own customers'. I know that one phrase doesn't necessarily indicate your stance on the issue, jak3676, just making a point about the words themselves.


RE: Err, no.
By Spuke on 10/16/2007 6:52:21 PM , Rating: 2
Somewhat unrelated but I think it's hilarious that when corporations lose money that they will expend vast sums of money on lawyers and court fees to keep it from happening. You would think that in a capitalist society, corporations would concentrate on bringing in more revenue to make up for their losses.


RE: Err, no.
By mindless1 on 10/15/2007 10:59:00 PM , Rating: 1
Is the rate roughly the same? Given so many variables, I don't think we can remotely conclude this. They have no way to fairly gauge what is sold on Chinese streetcorners, or darknets, closed P2P services, nor whether "rate" really means # of users or it just means fewer users but they're more proficient at it than they used to be.

Further, what if it is the same # of users (or I should say pirates?)? Today unlike any time in the past, younger people have increasing access and understanding of how to do it. I would speculate that today we have fewer tech-savvy people engaging in P2P but more kids - people who don't frequent this or most 'sites reporting news about RIAA et al. pursuing the lawsuits. Is the change in demographics significant to the RIAA et al? Probably, kids have less disposible income and are not potential customers so it was not a potential loss. That doesn't entitle them to infringe of course, but I think it does signify that the piracy of entertainment content is in a fluid state.

The Jammie Thomas fund is a hard pill to swallow. On the one hand she could settle, if/when the fund grows large enough, or on the other it could go to paying towards more defense and only the lawyers profit while she still owes the larger part if not even more than $222K by the time it's all wrapped up.


RE: Err, no.
By borowki on 10/16/2007 3:19:51 PM , Rating: 2
quote:
What these lawsuits are doing, however, is more important: galvanizing consumers and making martyrs of those who do get caught.


And what are these "galvanized consumers" planning to do? Boycott RIAA labels? That would actually be the optimal solution: You don't want to sell to those who would turn around and share them.


RE: Err, no.
By fk49 on 10/15/2007 3:12:16 PM , Rating: 3
Well when you get to the heart of it, these organizations exist for profit, and, therefore like you said, this program's true measure of success will be generating enough additional revenue through legal music sales to justify this legal campaign.

They've set up a risky plan in depending on increased sales to make up for this battle, setting themselves up for failure if you will. This brute force approach at making consumers buy music does not seem to be working and the fact that the program is costing them so much is what makes it a failure.


RE: Err, no.
By Schrag4 on 10/16/2007 2:24:07 PM , Rating: 2
I think the legal costs associated with going after those that download and distribute music illegally is considered an investment intended to increase legal sales of music in the future from those unwilling to risk the penalties that they see others incurring.

You're right, though, it is risky, since there seems to be backlash. Who knows if it's enough backlash to offset the do-gooders (non-criminal, either the honest or scared). I bet the record industry has some idea of those numbers, and I bet they'll act on them, as any good business would.


RE: Err, no.
By Spuke on 10/16/2007 7:01:46 PM , Rating: 2
Some people say there is a backlash. Most people never heard of the RIAA and I still encounter a few that don't realize it's illegal to download these songs (they think these P2P sites are run by the industry or the bands). I think the drop off in sales is really disinterest in the current music although, IMO, there isn't really any decrease in sales. I see way more platinum artists now than 10 years ago. Go back 20 years and you could name the platinum artists on one hand.


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