Ares Connect

In the wake of recent highly publicized lawsuits filed by the Recording Industry Association of America (RIAA), many critics are beginning to question the validity of such ludicrous settlements when the financial gain is far outweighed by the cost. Between 2008 and 2009, the RIAA won $1.4 million in lawsuits against consumers alleged to have illegally downloaded music files from popular peer-to-peer filesharing networks—but only at a staggering cost of $64 million.

When the cost of these lawsuits is so ridiculously high, why are the RIAA spending so much money chasing a few hapless individuals? Industry insiders believe it is because the RIAA is determined to prop up the ailing CD industry at any cost, rather than embrace new business models for online music sales.

In recent years, CD sales have been in significant decline as consumers choose to download individual songs rather than buy entire albums. Unfortunately, the RIAA seems to think that they can scare the public into buying CD’s again by chasing a few unlucky individuals through the courts. But critics say that these scare tactics are unlikely to work in the long run so the RIAA is going to have to rethink its policies.

Many critics believe that the recent spate of highly publicized lawsuits by the RIAA (Recording Industry Association of America) against ordinary members of the public, who are alleged to have downloaded music illegally via popular filesharing networks, is less about supporting the music industry and more about the RIAA trying to prop up an ailing CD market.

With the advent of the Internet and file-sharing networks, the market for CD music has been in decline for a number of years. People would rather download one or two songs than pay for an entire album of which there might only be a few songs worth listening to. Unfortunately, the RIAA believes that they can scare consumers back into the shops by spending ridiculous amounts of money filing lawsuits against a few hapless individuals.

Many people believe the RIAA needs to accept that times have changed and embrace a new business model whereby people can download their music freely using a Voluntary Collective License. This would make more sense than spending $64 million to recover only $1.4 million.

However, one thing is certain as the CD industry reaches the meltdown stage—the RIAA will have to change its tune at some point.

In a recent report published, PRS for Music are asking for ISP’s to introduce a controversial tax on peer-to-peer filesharing traffic in the UK. This means that broadband providers will have to pay a fine based on the amount of pirated music they allow to be downloaded on their networks. PRS are hoping that by introducing fines against broadband provides, peer-to-peer networks and filesharing will become obsolete. PRS think that incentives are the only way to deal with the problem

PRS argue that this piracy levy is a fair solution to the current argument over who should bear the cost of illegally downloaded files. The Digital Economy Act recently stated that the illegal filesharing issue was a measurable problem that could be priced. As a result, PRS claim their paper simply provides the economic framework to deal with this problem.

There are already tools available, including Detica’s CView, that are capable of measuring illegal filesharing traffic on broadband networks, so once the ISP’s and the rights holders manage to come to an agreement over who should bear the costs, it looks like being only a matter of time before fines are implemented.

Filesharing has once again hit the headlines after PRS for Music published a paper in which it announced it was calling for a controversial levy to be placed on broadband providers in the UK. This so called “piracy levy” will tax ISP’s based on the amount of illegal files downloaded through their networks.

PRS’s report, written by their chief economist, Will Page, plus David Touve from Washington and Lee University, claims to offer an economic framework which will provide an incentive to force the industries to act on illegal downloads. Their argument is that a piracy tax will help to align the financial interests of both parties.

The Digital Economy Act called for the measuring of peer-to-peer usage, but is proving difficult to put into place as the ISP’s and the rights holders are currently arguing over who should be responsible for the cost of illegal file sharing.

The technology is already in place to monitor filesharing traffic, so once the ISP’s and rights holders come to a workable agreement, it is only a matter of time before peer-to-peer networks are at risk and fines against users become standard. This money would either be paid to the state, or to the rights holders.

Joel Tenenbaum found himself in the news recently under the most serious of circumstances when he was convicted of illegal file sharing in a case brought against him by the music industry. In what many are saying is a ludicrous decision, a jury fined Tenenbaum a massive $675,000 for downloading 30 files over 8 years.

After the jury made their judgment announcement, the judge was forced to comment that she thought the fine was “unconstitutional” given the small nature of the crime committed. In fact, she took the decision to reduce the fine to the more reasonable amount of $67,500. Unfortunately, although Tenenbaum was relieved at her decision, he still faces the prospect of the music industry appealing against the judgment.

Joel Tenenbaum is not the only member of the public to be penalized for file sharing in recent times. There have been a number of high profile cases brought against lowly members of the public, all accused of illegal file sharing. Most of them were fined huge amounts for relatively minor offences. Many insiders feel that the music industry is making a mistake prosecuting this type of individual when lots of evidence suggests small scale file sharing is beneficial in marketing new and emerging artists.

In another outrageous court case instigated by the music industry in an attempt to crack down on illegal file sharing, poor Joel Tenenbaum has been made an example of after a jury chose to punish him with the ludicrous fine of $675,000.

His only crime was to download 30 songs over an 8-year period. Even the judge agreed that Tenenbaum had obviously had no interest in financial gain and had clearly been unaware of the fact he was supposedly committing an illegal act. The Judge actually commented that the amount was “unconstitutional” given the relatively small crime that had been committed.

Fortunately for Joel Tenenbaum, the Judge took the decision to reduce the fine to a slightly more sensible $67,500, but even so, Tenenbaum still says he has no real chance of paying off the debt given his modest income.

In the light of this high profile case, and several others in recent times, it is incomprehensible to many that instead of taking the view that in the vast majority of cases, small scale file sharing actually helps artists market their songs to the public, the music industry chooses to target individuals whose only crime is to share a few songs on the Internet.

A recent request to the courts in Washington DC by the US Copyright Group that would change the face of filesharing legal cases across the country is, we are pleased to say, most likely to fall on its ass and die.

The request was to treat 15,000 defendants in a filesharing case (the alleged crime was to download copies of the recently released “The Hurt Locker” and “Far Cry”). It can be plainly seen (to everyone except the US Copyright Group Lawyers, it seems) that this causes huge problems with individual’s rights. As the ACLU’s Aden Fine pointed out:

“lumping thousands of unconnected individuals into a few cases in a court far from where they live, without providing them adequate notice and a real opportunity to challenge the subpoenas,” certainly does not “uphold the law and individuals’ due process rights.”

The RIAA tried a similar thing a previously, and their request failed spectacularly. All the evidence points to the conclusion that this is going to go the same way. Let’s hope so, for the sake of file sharing and filesharers. And, of course, for the sake of common sense.

The US Copyright Group is trying to sue some 15,000 suspected defendants for downloading the recently released movies “The Hurt Locker” and “Far Cry”. The main difference between this and a million other copyright infringement lawsuits relating to filesharing is that the group is trying sue all 15,000 defendants in one case, with the accuseds standing together as one.

The rationale behind this amalgamation of defendants would appear to be solely the claimant’s convenience. It is doubtful that the courts will be sympathetic to this request – a request which turns the legal system of its head somewhat – just because of the claimant’s convenience. In fact the circumstances here closely mirror those of the RIAA case in which the judge told the industry giant to get lost. They had to sue individually. (Fortunately for the RIAA their lawyers LOVE to sue, so this was good news for them…)

The reason the request should be allowed, say the US Copyright Group, is because the BitTorrent downloads would likely have “touched machines within D.C. at some point”. Sounds like a very, very weak argument to me, but I am not a lawyer. Let’s hope, for the sake of filesharing everywhere, that this ridiculous request is met with the contempt it deserves.