RIAA Says LimeWire Owes it $72 Trillion

Around four years ago, the Recording Industry Association of America (RIAA) filed a lawsuit against LimeWire. The RIAA was suing on behalf of several music labels. In short, the RIAA claimed that LimeWire’s P2P software, which allowed people to download and distribute copyrighted songs for free, caused the music industry to lose millions of dollars. The RIAA won that case. All that was left was to figure out how much LimeWire now owed the RIAA as a result.

The RIAA came up with a figure that most people would find to be astounding. They want LimeWire to pay them $72 trillion. The RIAA feels that since LimeWire allowed thousands, (or maybe millions), of people to illegally download one, or more than one, of the 11,000 songs that the RIAA owns that it means the members of the RIAA are now entitled to statutory damages for every single illegal download that occurred.

Judge Kimba Wood has called that figure “absurd”. Judge Wood went on to say, in a recent decision:

“An award based on the RIAA calculations would amount to more money than the entire music industry has made since Edison’s invention of the phonograph in 1877.”

It is also worth noting that the estimated wealth of the entire world is around $60 trillion. I’m not sure why the RIAA thought that LimeWire would be able to somehow come up with more money than what all of the people in the entire world, all together, are estimated to have. To me, this sounds impossible.

Instead, it appears that LimeWire is facing statutory fines of up to $150,000 for each violation of copyright that they allowed to occur. That could mean that LimeWire may end up owing the RIAA around $1 billion dollars. How LimeWire would manage to pay that much money in damages is unknown.

The Limewire Shutdown Is Not The End Of the RIAA’s Problems

As you may have heard recently, Limewire has been ordered to finally shut its digital doors.  Yesterday, a federal judge granted the shutdown request from the RIAA after a ruling in their favor several months ago.  All searches, uploads and downloads through the client were ordered to stop.  It was, no doubt, quite a shock to users when they fired up their client and were greeted with the this message:

Legal Notice: This is an official notice that Limewire is under a court-ordered injunction to stop distributing and supporting its file-sharing software. Downloading or sharing copyrighted content without authorization is illegal.

So now the RIAA goes along its merry way without anymore worries, right?  Right?!  Not exactly.  In reality, the Limewire shutdown is a blip on the file-sharing radar.  Truth be told, the RIAA probably spent more on legal costs to pull this off than they lost from the users of the software.  And what do they have to show for it besides one program to point to as an example?  Not much, it would seem.

First, there were numerous articles popping up online today touting the alternatives to Limewire.  And of course there’s no shortage of those alternatives.  Then there’s Usenet which is almost untraceable.  And of course bittorrent which is now discovering better ways to hide users with tools like Anomos and Peerblock.  If anything, the RIAA may have made things harder on themselves by forcing pirates into more obscure places and making them harder to catch and sue.  What a kick in the butt if this shutdown makes the RIAA’s life the one that just became more difficult.

Second, there seems to be a study or survey popping up every few weeks that shows such things as “file sharers buy more music”.  I’m actually inclined to believe that too.  And not only because countless surveys have shown it, but because in a strange way it seems logical.  If you like an artist you feel as if you should support them.  They deserve to make a living off of their work, because, after all, if they can’t, then they will look for a 9-5 job and you won’t hear them again.  A lot of P2P users seems to be looking to discover new music that they can then support.  Obviously there will always be exceptions.  A percentage will always just be thieves.

So, the RIAA got their big example with Limewire.  They started down this course way back in the 90’s with Napster, so we can see how well it is working for them. They have succeeded only in alienating themselves from their customer base and probably forcing more people into piracy than would otherwise have been there.  And with each “example” they also further the technology used to thwart them.  Business models can either move ahead with the times or they can die – kicking and screaming in this case.

PRS Publishes Paper on Filesharing

The Performing Rights Society (PRS), the approximate equivalent of the US’s RIAA, recently published a paper outlining a proposed approach to the compensation of rights holders based on the level of unlicensed material passing through an ISP.

 The paper, snappily titled Moving Digital Britain Forward Without Leaving Creative Britain Behind, was written by Will Page, Chief Economist, PRS for Music and David Touve, Assistant Professor of Strategy and Entrepreneurship at Washington & Lee University.

(I’m actually not sure that I can tell you about it, because if you follow the links from the press release, it says in bold letters, “It is provided for the information of the intended recipient only and should not be reproduced or disclosed to any other person without the consent of the PRS for Music PR department.  So if it was mentioned in a publicly available RSS feed, does that make me an intended recepient or not?)

Moving on, the paper proposes the following argument, and I paraphrase, because there is unlicensed media, the level of unlicensed media within an ISPs network should be measured and remedial action taken.

The paper offers three possibilities for the “remedial action taken” against the ISP.

  • Compensation, but it admits that it’s difficult to find a way to price it correctly.
  • Licensing or levy, although broadly similar in effect, are very different legally.  There’s a table in the paper showing the differences.
  • Traffic regulation, with penalties or fines paid by the ISPs.

All of this is against the ISP rather than the individual user of the unlicensed media.  Presumably they’ve given up going after the end user because it’s clear to everyone that there’s just too much filesharing going on and it’s going to be easier to go after the ISPs to get money.

However, to be fair, the last two pages of the paper discuss the pros and cons of the three options, none of which are perfect.  One paragraph points out, “We want to make it clear that neither of the above-mentioned options could be considered without accepting that some sort of market failure has occurred and that in consequence some form of regulation is required, and that regulation should seek to put incentives and structures in place so that a market-based solution to the value of media on networks can evolve.”

I’m in a bit of a dilemma over this.  On one hand, part of me has sympathy with the rights holders and believe that they should be compensated fairly (we’ll leave the arguments of whether the PRS and RIAA actually work for the rights holders out of this for now) but the other part of me, says that the success of digital music stores, such as iTunes and Amazon MP3, shows that if you offer fairly priced music and a slick user experience, then people will pay willingly.

Again, I would like to think that mature language and reasoned approach are about the music industry becoming a bit more grown-up and finding fair solutions, but actually it’s just fancy words about getting the ISPs to pay up one way or another.  Those of us who don’t engage in illegal file sharing will simply end up paying for those that do.

Is this the way forwards?  What do you think?

The RIAA Is Throwing Away Money

Recently documents came into the public realm that show some of the RIAA’s financial dealings in 2008.  Apparently they have decided that, like their credibility, they need to throw away their money as well.  I am referring to files recently released by P2Pnet that show:

The 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 its “copyright infringement” claims, in order to recover a mere $391,000. [ps there were many other law firms feeding at the trough too; these were just the ones listed among the top 5 independent contractors.]

Wow, talk about a bad return on investment.  It looks as though, not only is it not the artists getting rich off of the RIAA lawsuits, but even the RIAA isn’t getting rich off of the RIAA lawsuits!  As always though, the lawyers are profiting handsomely.

If you don’t want to do the math, that’s $17.6 million plus spent to gain back $391,000.  Although no documents exist (that can be found in public) showing how much of this $391,000 went to the artists, I think it’s a fairly safe bet that it was little or none.

The math gets no better if you look at previous years.  In fact, it gets laughably worse.  Over the the three year period of 2006-2008 the total legal fees paid out by the RIAA is a staggering $64,000,000 to get back $1,361,000.

More bad news for the RIAA recently surfaced as well, in the form of former Pink Floyd manager Peter Jenner.  Jenner has been speaking out about filesharing being, more or less, unstoppable and not really a problem, saying, instead, that the music industry needs to find a way to take advantage of it.

While I, in no way, condone stealing intellectual property, I also have thought for a long time that the industry is out of control and that suing fans is no way to fix their outdated business model.  Instead of trying to cling to their antiquated ways, the music industry needs to move ahead and look, as Jenner said, into ways of taking advantage of modern technology.  They took a baby-step when they dropped DRM, but now it’s time for them to learn to walk and then run.  And maybe it’s also time for them to drop, and disavow, the RIAA.

RIAA could not Control themselves more Lawsuits

No_riaaThe RIAA could not control themselves and have filled more Lawsuits against P2P users. After all but admitting that there past actions have hurt them more than helped them they could not contain themselves and had to file more lawsuits.

Maybe they need the money to make salary over there, probably the bevy of lawyers on staff had nothing to do so they had to give them some work to do, so that they could bill some billable hours.

I would not be surprised if they have a money issue after all what have they done for music artist and music labels recently. Not a whole lot except piss the general public. Possibly this is a tact they will use when they ask there RIAA brethren at the Department of Justice to start suing John Q Public.

The sad part is music artist for the most part have gotten run over by the RIAA and deal with the negative publicity with there actions.

How to fight The RIAA

It seems like the RIAA is unstoppable in its crusade to sue music lovers into oblivion. They are using the courts to get their way with ridiculous judgments being handed out. A single illegal downloaded song can cost a person thousands. The RIAA really does not want to go to trial; they hope to scare people into paying up when threatened with a lawsuit. Most people will just pay up to avoid the extra hassle of facing a trial. I am not advocating stealing music because I believe it is stealing when you take something without paying. However the music industry (not all artists… look what Radiohead did) is being bull headed instead of changing with the times. And these judgments are not punishment that fits the “crime” There is no way that a few songs should cost as much as they do in penalties. The question is what can we do to destroy the RIAA.

I don’t think trying to pass any laws will help because the lobbyists are more incentivized than voters. They make money to get laws passed or to prevent laws from being enacted. Voters are just regular people with jobs & real lives. We don’t have time to know every single detail of what to vote on and when to do so. It is a very difficult thing to make changes through the voting booth. Tough but not impossible I know. Maybe a better way is to wreck the chances of any jury awarding outrageous cash to the RIAA & other such scum based groups. One way to do that is FIJA (Fully Informed Jury Association). Basically the Constitution set up the average person to be the final branch of government. We the People are the final road block to oppressive government. If lawmakers pass bad laws which are ruled on by corrupt judges then the jury becomes 12 super powerful humans that can do good. FIJA looks to educate Americans on a jury’s role in trials. Now this not mainstream stuff & judges will actually throw people off juries if they are found to be members of FIJA. So it is not going to be something that the powers that be will endorse, but the Constitution is supposed to be the highest law in the land. The concept is that a juror can not only find a defendant not guilty based on the evidence but also based on the fact that the law is BAD. The jury is in control. No really, they are. No matter what the judge tells them to ignore or base their findings on, they have the final say. So if I were on a jury and I knew I could prevent a real injustice from happening I would think it was my duty to do the right thing. If the word could be spread about FIJA then juries everywhere could be used to do away with bad judgments like what the RIAA goes after. This is a big task I know but I see no other way because the RIAA will not stop until someone stops them over & over again.

Pandora Should Leave USA

I don’t know how Pandora works. I just know it does. Pandora is an online music service I’m sure most of you have heard of if not used. I started using it last year and I absolutely love it. It learns what you like as you use it. You pick a single song or artist when starting up and it selects songs that it thinks you will enjoy based on some algorithm that is beyond my comprehension. I have been listening to Pandora since I sat down in front of my computer today and have heard about 2 songs that I was not crazy about and zero that I hated. That is a pretty good music service in my opinion. I hate fm / am radio because of the commercials. I have no time for them. That is why I like podcasts because most have no commercials. Even the live reads on some podcasts like Todd’s are fine because they take up less time and I think they sound more authentic because they are coming from the mouth of someone I trust for information.

I think it was the last podcast when Todd mentioned that Pandora might have to go to a subscription model since they are having to pay so much to some group (RIAA I assume) to play the music. If I were in front of my computer all day I would gladly pay a reasonably price but I work outside everyday while playing podcasts / music on an mp3 player. I think they will survive if they go to that model but I wish it did not have to come to that. I have heard songs that I either have never heard or did not know the details on and now love. How stupid is it for the RIAA & music artists to stop a service that puts music that they want to sell in front of millions of potential customers? I could easily download a program to record the music that is streaming through Pandora or I could keep track of the data for the music I like then go get the music through bit torrent. And I could get this music for free without Pandora but I don’t. I want musicians I like to make a great living & get rich. And it is just as easy to get my mp3’s from Amazon’s DRM free music service with one click purchasing as it is to steal it. The people who download for free are mostly younger people who don’t have the money to buy all the music they want. So the artists would likely never see any money from these people anyway until they were able to buy instead of get it free.

The RIAA is doing a disservice to musicians everywhere. Whether you agree with my logic or not the fact is that music is available for free and it can be gotten anonymously. So musicians better get with the program or become extinct. This is not 1985 so you better adjust to the marketplace. You cannot sue your clients and became profitable. I don’t know how the RIAA backs up their lawsuits but I want to see people just ignore the lawsuits & see what happens. Can they garnish wages, etc? I am not advising this action I just want to know how they plan to deal with people who non cooperate. If I were in charge of Pandora I would move my operations overseas & do like the Piratebay & keep my server locations secret. They have played by the rules and still have been attacked. They need to fight fire with fire.

RIAA = hypocracy. Are you really surprised?

For years the RIAA has put themselves up as the champions of the poor music creators whose livelihood is being stripped away by piracy. This justification has been touted for every action they have taken, from litigating against their customers, to the restriction of customers fair use. I don’t think anyone was naive enough to believe that their methods were altruistic, as they were paid by and obviously working in the interests of the large music publishers. The same publishers that, unlike the smaller labels, have never had a fantastic reputation for being generous to the talent.

Now the RIAA is showing how committed they are to the needs of the artist by proposing to the copyright board that the mechanical royalty that goes to the songwriter be almost halved. At 13% of wholesale revenue currently(split with the publisher), the songwriters are not exactly getting away with daylight robbery. Especially when you consider that the writing of the song is at least as important (more in some cases) than the artists interpretation to the success or failure of the song.

Big record companies were a powerful and efficient way to get music to consumers until about 10 & 15 years ago. Now the game has changed and the big labels are not willing to change to suit the new environment. Rather than suffer from their own mistakes they would like to make others pay the price. They started with consumers by making them suffer onerous DRM and reducing the value they get from their purchase by reducing the rights of use they have. Now they want to make the people that create and produce the music to pay for their mistakes as well! The audacity is as mind boggling as the short sightedness.

The Big labels Rome is smoldering and Nero is reaching for his fiddle.

The Music industry appears to see sense! [update – ..then snaps out of it]

Update – I may have given the RI too much credit (i.e. any credit at all) for showing some intelligence. The music industry is backing away from the service and the whole thing might die before it starts. Lets hope sense prevails. Thanks to Mario for the techdirt find
TechDirt
Financial Times
MTV

If this article from The Times is completely accurate a new service backed by EMI, Universal and Warner called QTrax will launch in the next 24 hrs that may show that the music industry have been taking at least some of the criticism leveled at them seriously.

While the website is already active the service relies on a custom application that is not yet available for download.  This application seems to be a customised version of the Mozilla browser that will allow users to connect to the QTrax website and download and play from a catalog of 25 million songs.  The tracks are protected by DRM but are in an MP3 format.  There is no details yet on exactly what the MP3 player compatibility and availability is, but presumably the DRM will make this limited.  The service will also be supported by ad revenue.  The distribution of files is via P2P although the exact form this takes is unclear.

There are a number of reasons why this is a potentially brilliant move.

  • This is finally recognition that music is art.  As such its value is not diminished by its consumption unless it is bad.  The consumption of good art actually increases its value and should therefore be encouraged.
  • The inclusion of rare, live and unreleased tracks in the service allows fans to engage more with their favorite bands.  It allows them to find and sample material they were not previously aware of and they consequently become more attached to the band.
  • P2P technology means that the record companies don’t have to pay the bandwidth bill for free listening and imposes at least a minimal cost to the consumer.  It also makes it a more social environment, you can only get your music for free if you help other people do the same thing.
  • Unbelievably this is a use of DRM I can support.  The point of DRM in this instance is to link you to the player which allows the music industry to receive the advertising revenue, collect good stats, and limit our use of the music.  This is absolutely justifiable when there is no charge.  It has never been my contention that music should be free, just that there should be a method to interact with it freely.  If you want to listen to anything for free use the service and pay with ad revenue and stats.  If you want to do anything extra, like put it on an MP3 player, burn it to a CD or listen to it in better quality, buy it.
  • It removes any justification for any person that can use this service to use any other method to get unauthorised copies of music.  If there is a method that you can listen to the song free of charge any other use must be paid for.  Removing the justifications people use in their own minds when they pirate will reduce this activity.  The availability of this service will also mend a large proportion of the ill-will a lot of the music consuming public has to the commercial side of the music industry as well.
  • It exposes the consumers to the back catalog which is the most underutilised resource in the whole music world.  While the top 100 makes the most visible money to the RIAA members, the older releases could be a much greater source of revenue for them.

I am looking forward to seeing, and reporting on what the reality of this service is, but on paper it is very impressive.  QTrax has the potential to significantly increase the sales of music.  It is an absolute fact that the more music a person listens to, the more they buy.  By allowing people to listen to huge amounts of music they will increase sales.

The RIAA are dirty snakes

In a case against an unrepresented defendant the RIAA has included a statement into the brief for summary judgment

Defendant admitted that he converted these sound recordings from their original format to the .mp3 format for his and his wife’s use. (Howell Dep. 107:24 to 110:2; 114:1 to 116:16). The .mp3 format is a “compressed format [that] allows for rapid transmission of digital audio files from one computer to another by electronic mail or any other file transfer protocol.” Napster, 239 F.3d at 1011. Once Defendant converted Plaintiffs’ recording into the compressed .mp3 format and they are in his shared folder, they are no longer the authorized copies distributed by Plaintiffs.

While some of the argument relates to the defendant putting the mp3 files into his Kazaa shared folder, the wording clearly tries to get case precedent for two items

  • That the the use of mp3 encoding implies that infringement is taking place
  • That the copying of CD tracks into mp3 on your computer is an unauthorised use of copyrighted product.

I have said previously that the end game for the recording industry is to charge for every time you listen to a song, essentially making you subscribe to music rather than to own it.  The concept of fair use means nothing to them but lost revenue.

Copyright was not intended for this, it was meant to stop people playing your music and claiming it was your own.  We have already extended this to cover exploitation of the work and into what you can do with music that you have purchased.  And how this industry have managed to get so much influence on what so many governments legislate completely boggles my mind.

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