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The Almighty Buck The Courts Music

RIAA Paid $16M+ In Legal Fees To Collect $391K 387

Posted by kdawson
from the world's-smartest-executives dept.
NewYorkCountryLawyer writes "In a rare outburst of subjectivity, I commenced my blog post 'Ha ha ha ha ha' when reporting that, based upon the RIAA's disclosure form for 2008, it had paid its lawyers more than $16,000,000 to recover $391,000. If they were doing it to 'send a message,' the messages have been received loud & clear: (1) the big four record labels are managed by idiots; (2) the RIAA's law firms have as much compassion for their client as they do for the lawsuit victims; (3) suing end users, or alleged end users, is a losing game. I don't know why p2pnet.net begrudges the RIAA's boss his big compensation; he did a good job... for the lawyers."
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RIAA Paid $16M+ In Legal Fees To Collect $391K

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  • Q.E.D. (Score:5, Insightful)

    by Anonymous Coward on Tuesday July 13, 2010 @10:47PM (#32895388)
    Thus proving what we've been saying all along:

    The RIAA's worst enemy is the RIAA.
  • by Pojut (1027544) on Tuesday July 13, 2010 @10:47PM (#32895394) Homepage

    "What're ya, fucking stupid?" -George Carlin

  • by Anonymous Coward on Tuesday July 13, 2010 @10:48PM (#32895400)

    It's to instill fear, and reduce the (speculative) lost sales.

    If they sell 10 million more albums as a result of spending the 16M in fees, then it's not such a bad deal. (Mind you, I don't think that's the case)

  • Re:Good Heavens! (Score:5, Insightful)

    by gandhi_2 (1108023) on Tuesday July 13, 2010 @10:50PM (#32895420) Homepage

    Just about everyone on slashdot pointed out that the only people who win this game are the lawyers.

  • To be fair, (Score:5, Insightful)

    by pwnies (1034518) <j@jjcm.org> on Tuesday July 13, 2010 @10:50PM (#32895422) Homepage Journal
    This is a pretty common thing legally. Corporations will often pay legal fees larger than the returns of a court case, if it means they can set precedence for the future. The other benefit is it creates fear in those who would have otherwise pirated songs.
  • Re:To be fair, (Score:5, Insightful)

    by biryokumaru (822262) <biryokumaru@gmail.com> on Tuesday July 13, 2010 @11:11PM (#32895550)

    Doesn't this just emphasize the incredible injustice of the American justice system? Giant corporations get legal protection because they can afford to waste millions fighting pointless legal battles. Joe Shmoe doesn't have that luxury. Isn't this an example of a corporate entity literally buying the law in some way?

    I don't know. That just really, really bothers me.

  • by Darkness404 (1287218) on Tuesday July 13, 2010 @11:11PM (#32895556)
    Between the MPAA's style of Hollywood accounting and the RIAA doing things like this, their statistics are losing credibility fast. How about using that 16 million to pay those artists that have been "wronged" by those evil "pirates".

    If the *AA want to really convince people that they are losing money and the "pirates" are in the wrong, they need to get their finances straight before they blame "pirates". If it costs you $16 million to collect $400K-ish, you are running at an extreme loss, chances are that "pirate" didn't cause $16 million in real damages, (or even $10 in damages...) and if the RIAA keeps shooting itself in the foot, eventually people will realize that the real thing harming artists isn't "pirates" but the record companies.
  • Re:Good Heavens! (Score:3, Insightful)

    by Anonymous Coward on Tuesday July 13, 2010 @11:13PM (#32895564)

    The justice system SUCKS!

    Look at it from their standpoint - If you had something stolen (say a laptop), but the Police, and courts system saw the loss as not enough to be worth their bother.

    What value does that give to the rest of your possessions: Your bike, Your flat screen TV, Your PVR, your collection of 1960's superheros comics. Can anyone at any time come nab your stuff if it isn't locked down and it would be OK? -- The law is effectively saying it is, so you better start your life of crime unless you want to be one of the worthless suckers who go and give value to make a living.

    How would you feel? wouldn't you want to spend a whole bunch (of effort/time if not money) to meet some sweet justice: some well placed bit of smelly vandalism. Hell, in the past you could discourage the criminal element with a well placed mob of angry friends - now that's illegal!.

    Posting anonymously out of laziness. - Can't think of an alias, and my real name is dull.

  • Re:To be fair, (Score:5, Insightful)

    by Xgamer4 (970709) on Tuesday July 13, 2010 @11:14PM (#32895572)
    That's the thing, though. As far as I'm aware, they've absolutely failed to set any kind of precedent that might even be remotely in their favor and they've completely failed in instilling any type of fear in anyone who might think about pirating music. All they've really done is cost themselves a good chunk of money while flushing any type of good reputation they had down the toilet.
  • Money well spent (Score:5, Insightful)

    by Weaselmancer (533834) on Tuesday July 13, 2010 @11:18PM (#32895594)

    You're not looking at the expense correctly. It's not revenue they're hoping to regain. If that was the case spending $16M to gain $391k is a losing deal and any idiot could see that.

    This money was spent as advertising, to spread fear about. And for what they've got for their $16M, it's been a bargain.

    Back when Napster ruled the nets and music was free and nobody was getting stripped of their entire future just to listen to Madonna, the music industry was looking at a pretty dire situation. Now significantly fewer people download music. I sure as hell don't. Too rich for my blood - I won't do it. From that point of view it is a win. There are plenty of people who now will pay for music rather than risk having the RIAA's pack of rabid lunatics take an interest in your life. Me, I simply do without. I won't fund these assholes, but I won't risk the future of my family just to hear Rush's latest album either. I simply abstain.

    Remember the "music industry" is nothing more than privileged middlemen. They produce nothing. They are to music what a toll booth is to travel. The whole goal is to keep the scam going. Spending $16M to keep the status quo? Totally worth it. Look at their revenue generated during the period in which they spent the $16M. Pennies on the dollar.

  • by Darkness404 (1287218) on Tuesday July 13, 2010 @11:19PM (#32895600)
    But they won't. Instead of "losing" money to piracy, they lose mindshare because people won't buy. Its a lot worse deal for the RIAA to have 10 million people not listening to their music than to have 10 million people listening to music without buying.

    If a person isn't listening to music, the RIAA has no chance of making any money, if a person is, if they like the music a lot, the RIAA will eventually get money by them buying records eventually.
  • AC (Score:5, Insightful)

    by Anonymous Coward on Tuesday July 13, 2010 @11:19PM (#32895606)

    Money recovered: $391,000
    Lawyer cost: $16,000,000
    Legal precedence, chilling effect, and erosion of justice & civil rights: priceless!

  • Re:Good Heavens! (Score:5, Insightful)

    by v1 (525388) on Tuesday July 13, 2010 @11:20PM (#32895608) Homepage Journal

    Does make one wonder how the artists can see their membership money being pissed away like that and think it's a positive

  • by EdIII (1114411) on Tuesday July 13, 2010 @11:51PM (#32895774)

    Everyone knows that downloading is form of theft (of copyright materials)

    No. Not everyone. Some of us know how absolutely and unarguably false and incorrect it is to claim it is remotely anything like theft. I'll just re-post my response to somebody else who was under the mistaken impression that you can "steal" intellectual property by downloading it:

    Theft of intellectual property is in impossibility, by the very definitions of the words involved. The cost, or effort, of copying is also irrelevant.

    When you give your money for the shiny piece of plastic, you are also granted license rights, that we The Peeps (aka Government), granted copyright holders to bestow upon others.

    Only one thing happens when you "pirate" or receive a digital copy of a copyrighted work without compensating the copyright holder: Infringement . The definition, "A violation, as of a law, regulation, or agreement; a breach." does not, and never has, implied Theft which has the definition, "(Law) Criminal law the dishonest taking of property belonging to another person with the intention of depriving the owner permanently of its possession".

    Now a copyright can be viewed as physical property, but that is the copyright itself. To permanently deprive somebody of their copyright means I somehow transferred those legal entitlements to myself and started receiving money and granting others license to use that work, per my newly and illicitly acquired intellectual property rights.

    All of the analogies to physically stealing anything are complete and utter tripe based on fallacious logic, and deliberate misinterpretation of law. Content companies (derogatorily referred to as Big Media) would love to have the act of Infringement conflated with Theft. It serves their purpose to have the public incorrectly associate the two to accomplish fear mongering.

    Of course the fact, that no college student or citizen has ever been convicted of theft of an MP3 seems to make no difference. Defendants are always sued for damages as it relates to the acts of infringement in a civil court and not a criminal court. No district attorney has ever prosecuted criminal charges against an ordinary citizen for what we consider to be piracy because it is pointless. It does not meet the definition of criminal levels of infringement which traditionally require intent to profit financially or large scale distribution. Those have been amended in recent times, but nonetheless, nobody has ever been prosecuted criminally for it, despite the fact that torrents and file sharing have involved distribution at what some consider to be large scale. Even if, IF, somebody were to be prosecuted, the crime would not be theft.

    It makes very little sense, and I don't support piracy.

    Once again, I hope some people are reading this and figuring it out.

  • by Anonymous Coward on Tuesday July 13, 2010 @11:54PM (#32895788)

    they lose mindshare because people won't buy

    If only we could all remember that half the population has an IQ below 100. Most people don't have much "mindshare" to go around. They don't give a flying fuck about the politics of IP ownership. They learn what buttons to push to download their stuff and that's all they care to know about technology.

    They also don't have very sophisticated taste in entertainment of any sort. This is why so much of the music the RIAA "protects" is recycled, boilerplate crap. The music industry panders to the lowest common denominator. The best stuff for the discerning consumer is on the fringes, made by artists who do it for the love of it, and aren't trying to get retarded rich but would like to earn a nice living.

    Seriously, think about the things that get lots of people to mob up and force change. What are they? Slavery, prohibition, the right to vote, civil rights, wars, and abortion! These are basic and big things. So do you really think there is going to be some kind of grassroots music industry boycott? I don't. It's just not that big a deal for an average person to give much of a flip about.

  • by GumphMaster (772693) on Wednesday July 14, 2010 @12:05AM (#32895850)

    If one party of the disputes paid $16M we can safely assume the other side has spent a fair amount. We can also safely assume that the US legal system, that is the US taxpayer, has spent a significant amount dealing with this: court time, judges, legal assistance, administrative support, jurors etc. This is court time and money not spent dealing with other matters, some of which you might consider of far more value.

    Hopefully with the recent reductions in damages awards the financial incentive to chase the rats-n-mice of copyright infringement will go away and the public costs will follow.

  • Re:Good Heavens! (Score:3, Insightful)

    by Cwix (1671282) on Wednesday July 14, 2010 @12:06AM (#32895856)

    This has nothing to do with the police.. If your lap top was stolen ($1000) and you knew that the only way you could get your laptop back is to pay 40,000 would you do it, or say fuck it and go get a new laptop?

  • Bullshit. (Score:5, Insightful)

    by Lythrdskynrd (1823332) on Wednesday July 14, 2010 @12:09AM (#32895870)

    This week alone we've read about how Movies always end up in the red (even Harry Potter lost money) http://entertainment.slashdot.org/story/10/07/09/1621218/Hollywood-Accounting-mdash-How-Harry-Potter-Loses-Money [slashdot.org]

    and this one about how labels avoid paying musicians hasn't even fallen off the front page yet: http://news.slashdot.org/story/10/07/13/1737224/RIAA-Accounting-mdash-How-Labels-Avoid-Paying-Musicians [slashdot.org]

    There's no way the legal expenses cost $16M in *REAL* money. RIAA uses internal lawyers. In fact, RIAA is just lawyers. They're paying themselves and once again, screwing the artists.

    I mean seriously, to the "editor" who posted this (kdawson) would it kill you to put an ounce of fucking critical thinking into it before you post?

    I'm sorry... I know this must come off as a "troll" ... maybe I'm reading too much slashdot or something.

  • by twidarkling (1537077) on Wednesday July 14, 2010 @12:17AM (#32895914)

    You're not looking at it the same way the RIAA is though. They don't think people will stop listening to music completely if they choke off downloads and YouTube usage, etc. No, they think that people will turn to licenced usage. OTA Radio, Satellite Radio, Bars/Nightclubs that have paid performance fees, etc. Thus, they will be getting paid for people's initial exposure to the music, and for when people purchase it.

    What they fail to realize is that a lot of people are people similar to me. I don't listen to the radio for any number of various reasons, I don't go to bars/clubs, I don't pay attention to music in malls. The only exposure I have is by word of mouth, which I then go track down online so that I can find out myself, rather than hoping to get lucky through licenced exposure, where I can't often control what plays.

    So, while you and I know that illicit downloads can help drive sales, they, instead, look at it as a chance to get paid twice.

  • Re:Good Heavens! (Score:2, Insightful)

    by noidentity (188756) on Wednesday July 14, 2010 @12:32AM (#32895988)

    Hmmm...

    1. Get sued by RIAA
    2. RIAA bankrupts itself in lawyers' fees
    3. ???
    4. Profit!!!

    Unfortunately you don't profit, but the rest of humanity does.

  • Re:Good Heavens! (Score:1, Insightful)

    by Anonymous Coward on Wednesday July 14, 2010 @12:37AM (#32896020)

    That's the whole point of the fucking police... to solve crimes and bring people to justice.

    Who the hell has property valued at 40,000 bucks? apart from perhaps a fancy car...

    Judges, juries, witnesses, lawyers and other court staff were paid for months to prosecute the "theft" of $20 of music (not even physical recordings, digital copies), yet Joe Public has to say "meh... 1000 bucks, fuck it"? Why don;t they tell the RIAA that?

    This is proof of a legal system tilted wildly in favor of corporate interests and not "justice for all". More like justice for all who can afford it.

  • Re:To be fair, (Score:5, Insightful)

    by biryokumaru (822262) <biryokumaru@gmail.com> on Wednesday July 14, 2010 @01:02AM (#32896134)

    I do not have $16,000,000 to blow to protect my copyrights, whether or not the copyright was free. I cannot afford to pursue school children and grandmothers with overblown legal threats either. The average dude lacks the resources of a giant, multi-billion dollar corporation, and because of that they are unable to pursue their legal rights.

    In 18th century England, criminals were not guaranteed legal representation, and thus the poor almost always lost legal battles. Not because they were guilty, but because they were poor. Is the DA going to defend my copyrights? Ya, I'm so sure.

    Seriously. You have got to be kidding me on this one.

  • Re:Good Heavens! (Score:3, Insightful)

    by Kitkoan (1719118) on Wednesday July 14, 2010 @01:03AM (#32896142)

    Does make one wonder how the artists can see their membership money being pissed away like that and think it's a positive

    Easy to see it as a positive. It won't be veiwed as 'legal fee's', it'll be viewed as 'public awareness fee's', part of the campaign to 'show the public the evil's of illegal file sharing'. They will declare it was never for the money, just the message that it's illegal and wrong and if you continue to share music illegally then you will be punished.

    Granted, that message will be lost on Joe Public. But thats life.

  • Re:Good Heavens! (Score:3, Insightful)

    by Spewns (1599743) on Wednesday July 14, 2010 @01:07AM (#32896158)

    Clearly, we must set up a cabinet-level Department of Intellectual Property so that the War on Pirates can be fought at public expense, with the same efficiency and success as the scourges of drugs and poverty....

    ...and terrorism.

  • Re:Good Heavens! (Score:2, Insightful)

    by Toonol (1057698) on Wednesday July 14, 2010 @01:31AM (#32896268)
    Dude, we won the war on drugs. You can totally grow plants now in California. You just need a doctor's note.

    It's a new low, actually. You get to go to a doctor, pretend you're damaged and incompetent, so that you can be put into a pathetic underclass of those allowed to grow pot. I'm for legalization; but this farce of 'medical marijuana' that causes so many stoners in their 20's to pretend they're chronically sick is embarrassing.
  • Re:Good Heavens! (Score:3, Insightful)

    by Arancaytar (966377) <arancaytar.ilyaran@gmail.com> on Wednesday July 14, 2010 @01:55AM (#32896346) Homepage

    This is just more evidence that Piracy is Killing Music(tm)! Pirates, apparently less busy stealing food from the mouths of starving artists' starving children than they seemed, managed to pull over 15 and a half million dollars from the RIAA's coffers...

    Exactly! And who do you think did the RIAA steal those millions from? That's right! The artists! Pirates are totally stealing money from the artists, in the sense that the RIAA bleeds artists dry and then uses that money to sue pirates.

  • by JackieBrown (987087) <dbroome@gmail.com> on Wednesday July 14, 2010 @02:00AM (#32896366)

    then I would be rich. That's all that matters in America :/

    As opposed to where?

  • by kaizokuace (1082079) on Wednesday July 14, 2010 @02:10AM (#32896424)
    As opposed to countries where you get healthcare :/
  • It's to instill fear, and reduce the (speculative) lost sales.

    Bingo. The parent post has it correct.

    The purpose of the lawsuits was never to directly recover money from individuals who have engaged in occasional acts of copyright infringement. Rather, it was to create the perception that online infringement could have dire consequences (dealing with even a groundless lawsuit is a tremendous time sink, and even a "small" settlement can run to four or five figures), and thereby (in theory) encourage people to pay for at least some of the music that they otherwise would have downloaded for free.

    While the $16 million appears on the balance sheet as legal fees, it would far more accurately be charged to the marketing budget as an advertising campaign. I doubt that the RIAA members ever expected these lawsuits to directly recoup their own costs. Looked at as a marketing expense, $16 million is a drop in the bucket.

    Whatever you might think of the RIAA's economic model or the ethics of using threats of extortionate legal action to frighten consumers, the bloggers and reporters who are framing this story as "OMG the RIAA are SOOO stoopid! They only got $391K from their $16 million lawsuits! Hahahaha Looosers!" have entirely missed the point. Indeed, they're apparently even more foolish than they accuse the RIAA of being.

    An intelligent analysis of the situation might look at what the RIAA's members did or did not receive in return for this $16 million campaign. Did they receive value for money? Has there been a change in the amount of private, noncommercial infringement? Have sales numbers been improved? Has public perception of, and attitudes toward, copyright infringement changed? Has this campaign generated a lot of free publicity, and has that publicity been a net positive for the 'message' that the labels wish to push?

  • Really? (Score:5, Insightful)

    by caitsith01 (606117) on Wednesday July 14, 2010 @04:03AM (#32896886) Journal

    I really, really loathe these guys.

    But do you really think it's not working for them? They've paid $16M to lawyers. For that amount they have received:

    - nominal damages

    - huge amounts of lobbying power with politicians ("look how much we're having to spend to defend our rights!")

    - absolutely massive amounts of anti-piracy PR from their big media pals

    - a hard to measure but very valuable creation of fear in the mind of the average file sharer

    I'm sure I'm not alone in being distinctly more wary about file sharing than I was in, say, the era when Napster and Kazaa dominated.

    I think for $16M they'd be delighted.

    Of course, none of that negates the fact that a much, much, much better approach to selling media would be to make it affordable and DRM-free. Which is why, for example, I spend too much money at Good Old Games.

  • Re:Good Heavens! (Score:4, Insightful)

    by Vectormatic (1759674) on Wednesday July 14, 2010 @04:31AM (#32896992)

    i know i have a 99% probability i'm just feeding a troll, but tell him this:

    If you are currently leading a large media-oriented company, and have less affinity with technology then a 3-year old, STEP DOWN, Just jump out the window with that golden parachute, perhaps use some of your golden-handshake to set up a business which you know stuff about, and perhaps something you actually enjoy doing (hand-building wooden sail-boats for all i care, just do something you like). Todays Media corporations needs to deal with technology, there is no escaping it, and someone who doesnt understand what is going on out there is the last guy you want making large business decisions.

    Besides, if he isnt a bad guy, there are probably thousands of things he would enjoy doing more then being a record company CEO

  • by Willtor (147206) on Wednesday July 14, 2010 @07:33AM (#32897872) Journal

    I don't think it's about selling more albums at all. It doesn't really matter whether they do.

    The issue is that if they have a bad quarter (or worse, a series of bad quarters), they need to justify it to shareholders. Illegal downloading is a good scapegoat (and, for all I know, that's what's causing lost sales under their current business model), but in order for that excuse to work they have to launch a campaign against illegal downloaders. It's all about the perception the shareholders have of the executives.

    By this reasoning, almost any amount of money they spend prosecuting illegal downloaders is justified because it's fighting a war against piracy. This is doubly effective if they have a successful quarter in which they sell more albums because it ostensibly means that their campaign is working. And now shareholders are convinced that these executives are the right people for the job.

  • Re:Good Heavens! (Score:3, Insightful)

    by molog (110171) on Wednesday July 14, 2010 @09:58AM (#32899646) Homepage Journal

    Do you really think that Republicans have a monopoly on corruption or bowing to corporate interests? Both parties are equally guilty, and neither party should be supported.

  • Re:Really? (Score:3, Insightful)

    by Rich0 (548339) on Wednesday July 14, 2010 @11:52AM (#32901750) Homepage

    I think a good way to look at it is that the RIAA is essentially at war.

    War isn't about return-on-investment. If anything it is about the opposite.

    I want you to do something. You don't want to do it. I show that I'm willing to spend $10M ruining somebody else's life with no real gain to myself because they refused to do what I want you to do. Then I ask again if you're sure you don't want to do it.

    When the real Mafia blows up somebody's store, they aren't doing it to gain revenue from that store (face it, that store won't have any more revenue). They do it to continue to collect revenue from every other store on that block.

    The success or failure of the RIAA's actions isn't measured by how much they collect from the people they sue. It is measured by how much they collect from the people they don't sue.

    Hey - I don't like any of this either, but the people running the show at the RIAA know exactly what they're doing.

  • Re:Good Heavens! (Score:3, Insightful)

    by causality (777677) on Wednesday July 14, 2010 @11:53AM (#32901782)

    I blame the artists, for making such lopsided deals that they roughly break even after the first record and own none of their music. Having made millions for the recording studio they signed with and the studio using that for RIAA membership is a side effect that would go away if not for musicians with stars in their eyes. Keep the music local and keep the live music scene going people, stay away from bad recording deals.

    You'd also have to blame the average customer of the major labels for funding this mess in order to hear their top-40 flavor-of-the-week. The ones who have no refined tastes in music and are therefore likely to be interested in whatever is being advertised and promoted.

  • by SnowDog74 (745848) on Wednesday July 14, 2010 @12:42PM (#32902690)

    It never was. Sidney Shemel and M. William Krasilovsky, two music industry attorneys, wrote the bible on the industry called This Business of Music. They observed the maturation of the CD format as an inevitability in the mid-1990's. I also wrote a paper about the coming internet distribution possibilities in 1996.

    Piracy is a growing threat a continuing decline in their bottom line, but that isn't the overall concern. The overall concern is the inevitable obsolescence of record companies themselves. Digital distribution cuts out so many middlemen in the distro monopoly that's been in place since the 1940's. It's got the potential to eliminate entire A&R departments, distributors, subdistributors, rack jobbers, one stops... the "record club" is already practically obsolete (remember Columbia House?).

    So, the industry is changing and these guys realize that the older conglomerates aren't small enough, agile enough, to possibly ever compete in the more diverse space of internet distro. They don't understand it. They can't dominate it. So, they're throwing lawyers at every granny and twelve year old not to stop the inevitable shift, but to slow it down.

    The problem is that piracy only gives them more ammunition to send lobbyists after Congress to get more dumb legislation passed like the DMCA. The real response to this? People need to speak with their pocketbooks and show the economic viability of the legit distro models that work, that they like, whatever, by purchasing through those models.

    That will send a message to the record labels and to the marketplace in general in the only language that they understand... "Cha-ching!"

  • Re:Good Heavens! (Score:3, Insightful)

    by dwiget001 (1073738) on Wednesday July 14, 2010 @02:42PM (#32904516)

    There is no difference, the fact that Dems or Rebs win power in national elections, has proven to be worse for the U.S. as a whole, no matter which is in power. It has been this way for years now.

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