RIAA's Cary Sherman says lawsuits were the only option

Shawn Fanning's Napster unleashed a file-sharing frenzy that only lawsuits could quell, says RIAA

(Credit: CBSnews.com)

Cary Sherman offers no apologies and won't for a second concede that filing lawsuits against people who pilfered digital music from artists was ineffective. On the contrary, the president of the Recording Industry Association of America makes a case that chasing file sharers into court was the only option in 2003, one of the darkest periods in the music industry's history.

"If you can go back to that time in your mind and remember that file sharing was growing at logarithmic pace," Sherman said referring to 2003, not long after file-sharing service Napster had triggered a music-swapping frenzy. "It was unbelievable how much infringement was going on and there was no sense that it was illegal. There were no legal cases or precedent, nothing to discourage people from this kind of behavior."

Sherman spoke to CNET News hours after The Wall Street Journal published a story on Friday about the RIAA's decision to end its five-year-long legal campaign against individuals who the group accused of pirating music. According to the Journal story, the RIAA opened legal proceedings against 35,000 people during that time. Those accused of stealing from the music industry include college students, businessmen, and single mothers. From now on, the group will rely on Internet service providers to help discourage people from sharing music illegally.

"Doing nothing was basically agreeing to watch your industry get totally decimated. It was a hard decision to make but it was one where there was no alternative."

--Cary Sherman, RIAA president

The top music labels are also trying to make music more easily accessible and cheaper to the public than ever with the help of ad-supported sites such as YouTube, iMeem, and MySpace Music. Apple's iTunes is now the biggest music retailer online and off.

But back in 2003, the RIAA was tasked with educating people about the illegality of downloading pirated music. The strategy was to create deterrents and remind people of the possibility that pirating music could land them in court.

"At that time we didn't have any parents engaged in deterring piracy," Sherman recalled. "We didn't have any digital marketplace to speak of. We had lost the Grokster case in the Circuit Court of Appeals. We appealed that decision to the Supreme Court and won. At that time, the ISPs were making money from piracy. They were almost advertising it 'Download what you want,' was the reason to buy broadband. And so doing nothing was basically agreeing to watch your industry get totally decimated. It was a hard decision to make but it was one where there was no alternative if we were going to establish the rules for digital music on the Web."

Sherman suggests that the stats vindicate the strategy.

In 2004, 19 percent of Net users were downloading music files from peer-to-peer sites, according to research group NPD. In 2007, NPD found the same percentage of users downloading songs. The RIAA acknowledges that even if that 19 percent of users has remained constant, that group of users is now downloading far more songs.

To support his argument that lawsuits were effective, Sherman also points to the meteoric growth in legal sales since the RIAA began taking file sharers to court. In 2004, digital music sales were $183.4 million or a little over 1 percent of the $12.3 billion in total music sales. For 2008, digital music sales are projected to be $3 billion or 30 percent of total music sales. The music industry couldn't have accomplished that had piracy been allowed to grow unchecked, Sherman said.

Representatives from the Electronic Frontier Foundation, the Internet-rights advocacy group, disagree.

"The announcement (about the end of the lawsuits) is long overdue," said Gwen Hinze, EFF's International policy director. "Our position is the recording industry hasn't achieved its goal of thwarting file sharing with litigation. We would like to see a better way to move forward and would rather see voluntary collective licensing."

[HlLLARY CLITON]

Spoken like a defeated person

[clynx]

This industry has given us such garbage content and isn't worth what is on my shoes. They have been ripping us off with 1000% profit and keeping good music off the map. They have been asking for a customer revolt for many decades. The only new events are of ISP's working with this corrupt group against giving their customers good service is despicable. If I owned an ISP, I would tell these scummy record companies to take a hike. And artist, if you want to make good money do what the Grateful Dead did and put on a good show with good music, they proved it worked and invited boot leggers.

[rkkirch]

Amen, who knows how many groups we were never exposed to as a result of payola. The garbage that they call music now a days is just a bit above grunting. Instead of using the Internet to expose new groups to the public, the RIAA thought that they could bully the teens of today.

[Jeffero28]

"And artist, if you want to make good money do what the Grateful Dead did and put on a good show with good music, they proved it worked and invited boot leggers."<br /><br />The big record labels could never be accused of looking out for the best interest of the artists, and they overcharged for years. But encouraging fans to record live shows like the dead and other bands is not the equivalent of dowloading studio material for free. Those recordings are usually traded amongst fans and have little monetary value.<br /><br />As for just packing up and going on tour...not as easy as it sounds.Bands can not tour often enough to make good money unless they have the backing of a music label. They could be the next led zepplin and have a huge underground following but if their "fans" arent paying for the music they wont tour much, and when they do it usually is as an opening band. It all adds up to great musicians falling through the cracks. <br /><br /> Having to work a full time job not playing music to pay bills means less time to practice, tour, record and on and on. There will always be pop stars and top 40 "entertainers" and raking in money from poster sales and stadium tours sponsored by coke. Real musicians will have to be content with smoky clubs and 5 figure salaries if they want to make a career of it.

[mattumanu]

Hey, where is everyone? How come all you guys aren't ganging up on Jeffero28 and telling him what a loser he is, or what an idiot he is for believing RIAA lies, or telling him he's a RIAA shill? <br /> <br />What's wrong?

[chuck_whealton]

For the main part, I'd have to agree with you. You couldn't pay me to listen to most new music. This, on top of forcing entire CD sales on customers, and forcing them to purchase the newest media available if they want the best sound (i.e. - paying to "license" the same music multiple times). Prior to digital music, who hasn't been stuck purchasing vinyl, then tape (cassette or 8-track), then CDs? <br /> <br />These guys have made lots of money that they didn't earn, though I by no means advocate downloading music illegally. <br /> <br />Now that the RIAA has dropped their draconian legal maneuvers and we're STARTING to see some music being sold that is DRM-free, I might actually start to buy again. Prior to this, I vowed not to purchase anymore music and to just live off my legally purchased collection until they stopped this stupidity, and I've stuck to it.

[MSSlayer]

Jeffero, <br /><br />That is BS.<br /><br />In the heyday of punk, bands that were on small labels just as Dead Kennedys, Butthole Surfers, Black Flag, Bad Religion, Circle Jerks, etc, lived on the road and in fact came home with more money in their pockets that many of people on major labels.<br /><br />Even to this day small bands who are on independent labels or self-publish make a good living touring.<br /><br />The bands on major labels have to tour because they make next to nothing from album sales because the RIAA members are a pack of thieves.

[medezark]

The RIAA and the recording industry in general are not now, nor have they ever been, interested in the well being of the actual artists. The pittance in royalties actually paid to artists (when they can "locate" them), is reduced by breakage and other charges that were originally based on the losses of fragil shellac records. Some labels even charge back their artists for production costs, to the point where the artists OWE the record label for a hit record. Then the RIAA collects royalties which rarely ever reach the artists. The industry can't figure out how to gouge as much money from consumers and artists as they're used to under the new paradigms, and so they fight it as hard as they can. The RIAA wants to protect their own interests, screw the artists, screw the consumers. <br /> <br />Individuals can now, for a relatively low cost in software and hardware (exclusive of instruments), self-produce and distribute their music without the bloated and greedy infrastructure the recording industry currently uses. And the real money for talented musicians has always been live performances, rather than selling records.

[Imalittleteapot]

It was the only option because they refused to change their ways in a changing world. Not being creative enough to sell your goods in a changing world isn't quite the same thing as not having an option. Are we not selling massive amounts of digital music online? Yet, when the law suits first started the RIAA and the music industry fought it either via not selling their goods online or crippling them with massive DRM. They fought against it tooth and nail like a crying child being dragged to bed. No, that's not the same thing as having no option.<br /><br />They say, "We didn't have any digital marketplace to speak of...." So the fools should have built it instead of fighting against it's creation! It doesn't take that long to set up a website with a shopping cart on it now does it? iTunes does it. Amazon does it, but their excuse is that it didn't exist! That's their complaint? That it doesn't exist! The greatest thing that could ever happen to any salesman is to discover a need for something that doesn't exist! That positions you to be first in the market and they can't figure that out? That shows their business sense right there and it shows they're losing money not because of piracy, but because they don't know how to sell! Plain and simple.

[Imalittleteapot]

Oh and one other quote that I just noticed. "there was no alternative if we were going to ESTABLISH THE RULES for digital music on the Web."<br /><br />See, now we see why the RIAA is such a failure. They weren't concerned with doing what they needed to do to make money honestly. The only thing they're concerned with IS HAVING CONTROL. HAVING THE POWER! Just like I always said. It didn't matter to them they may be able to make money SOME OTHER WAY. They weren't happy with that. They only want to make money THEIR WAY. Well, business doesn't work like that. You sell the customer what the customer wants or you become obsolete fool!

[Wookiee-1138]

What a drama queen. Exponential, maybe. But hardly logarithmic.

[-o_o-]

Just to be a math nerd: Your instinct that they are clueless with math is spot on, though your logarithmic is very different than exponential.<br />He meant exponential. Logarithmic curves rise quickly, but very briefly and then level out. Though they continue to grow it is by infinitely SMALL units. So logarithmic growth would be what they want. barely any growth after an initial period of adoption, versus exponential which gets out of hand very quickly.<br />The actual growth curve of copyright infringement with P2P software is much closer to logarithmic than they would want you to know.

[Orion Blastar]

Nonsense in the 1970's and 1980's Music Piracy was higher thanks to the cassette tape on the stereo. One person buys an album or cassette tape and then makes copies for all of their friends who make copies. If the pirates liked the music they bought it, if not they erased the cassette tape and used it for other music.<br /><br />The only reasons for piracy was:<br />#1 The price of songs were too much to afford for the average person.<br />#2 Buying an Album or CD gave you three songs you liked and ten that you didn't like, so you felt ripped off paying for the ten songs you didn't like.<br />#3 The quality of music has gone down as they use computer enhancements to turn talentless singers and musicians into something that sounds better, but not good enough to buy.<br />#4 Piracy actually helps some musicians as Metallica learned. It made them more popular after their MP3s were shared on Napster and other file sharing networks, so that they released more "best of" and new songs to a new generation of fans. Metallica's CD sales went up when they stopped suing their fans for file sharing.<br />#5 Whatever DRM method you come up with some hacker/pirate will find a way around it in a month or two. Even if it means lossless to lossless recording via some software program to reduce the quality.<br />#6 MP3s don't have the music quality of CDs anymore, and pirates reduce the quality when copying, so if pirates like the song they will buy the CD anyway to get a better quality version.<br /><br />What the RIAA/MPAA needs to do is stop being the MAFIAA and stop suing fans and start learning for ways to make money off the piracy making music more popular. Instead of suing fans, offer them pirate amnesty to delete their MP3s and buy the songs in volume at a discounted rate. Have a program that searches the hard drive for MP3s of songs, and then offer discounts on the real CDs and real songs and if the user agrees then delete the MP3s and sell the music over the Internet legally.

[karpenterskids]

Ooo, MAFIAA...I'm surprised I haven't heard that term used before now. :)

[bmn_1213]

Wow, really, *logarithmic* growth? Another possible explanation for poor business sense: total lack of mathematical understanding.

[MSSlayer]

Dumb people do not understand math, hence they go into business.<br /><br />I have never met an intelligent businessman, not one.

[tdlane]

Aaaargh! Doesn't this guy remember that people were unable to purchase digital music legally back then because his industry was stonewalling digital music sales? What a bunch of self-righteous poppycock!

[Lerianis]

Bingo! No one I know has bought into the recording industry BS for years now. Sure, people still buy a CD every now and again.... but only when they ABSOLUTELY HAVE TO and more than half the music on there is actual listen worthy music.

[bmn_1213]

Sure, and how does a polling company come up with accurate file download figures? It calls someone up in a random poll and asks dad if anyone in the family is illegally downloading music? Please. File trading and downloading has increased exponentially every year since inception. These hacks just want to pretend that their stupid lawsuits worked. More people should have challenged these lawsuits anyway. How are you going to prove any individual did anything? Because it happened at an IP address?

[rrowleyarizona]

The RIAA should be terminated, it's leadership stoned (bible style). For those who DL, simply use blocking software such as PeerGuardian to block the ISPs and RIAA from seeing what is going on.<br />Download Forever!

[t8]

They should have bought Napster when it was experiencing amazing growth. Instead they tried to kill the idea of digital music. So is it any surprise that they lost lots of sales. They didn't innovate toward the inevitable future.

[applehazelnut]

By logarithmic, he probably meant exponential. This guy isn't too bright is he? :)

[williwok]

The only reason they are stopping these actions isthe bad publicity they have raised along with total hatred of these creeps who have skirted the legal system. Several prominent legal scholars have blasted their tactics and the only ones who have gotten these extortion funds are the recording industry. Luckily for the public there are sites that share the info and hopefully some creative attorney will file a class action to get the millions back to the students from this extortion

[troppp]

I'd go further to say that they are finally running out of funds to continue with their draconian ways. Also, I'm hoping this is a sign of a changing political stage. Perhaps the new administration isn't going to be bought as easily, or it's going to focus on looking after the people for a change.<br /><br />Just being optimistic today.

[satch89450]

The coverage of the RIAA story has been largely incomplete in the media, both the mass media and the technical media. The RIAA did not just pop into existence as a piracy-fighting organization. It started out as a good thing. The reporting has missed this essential piece of history:<br /><br />Back in the early days of phonograph records, audio enthusiasts had a large collection of turntable needles and a preamp with a large knob of equalization selections in order to play the records put out by the various labels -- records recorded to different technical standards. The RIAA started out as an industry standards-setting body, conceived to rein in the madness. Its goal was to have the industry agree on on a particular cutting geometry, and a single equalization curve. It succeeded. Without the RIAA, your cassette desk would be festooned with controls, likewise your CD player. How about having to have a unique codec for each version of MP3? The list goes on.<br /><br />The RIAA continued to be the meeting place to establish uniform method as new media cropped up. Like so many other standards bodies, the RIAA contributed to making your use of media players of all kinds simpler and easier.<br /><br />Where the RIAA went wrong was to also be an industry cartel dealing with the theft of intellectual property in the music business. A standards-setting body is not the right vehicle for such a cartel. The RIAA stepped out of the bounds of a standards-setting body, tarnishing the good name the RIAA had by the legal actions that the RIAA has embraced for the past five years.<br /><br />The RIAA needs to go back to its roots, being a standard-setting body. You and I, as well as the recording industry, still need that function.

[colamix]

Sorry, but standards set by oligopolies having cornered the market are not a good thing for anyone whether it's RIAA, Microsoft or Ma Bell.<br /><br />Concerning the article, Mr. Sherman's revision of history is a little skewed. Physical music sales (CDs) reached and maintained its peak throughout the Napster era and took a nosedive immediately after they had it shut down. They know Napster was the best and cheapest promotional vehicle they couldn't have dreamed of. It is the lack of control which they have always enjoyed that prompted them to hastily shut down Napster and they have been paying the price ever since.

[The_Vin]

ISO controls the codec for MP3, which would negate the existence of the RIAA in your argument.

[ulsongunner]

Let's see, the music and movie industry tried every trick in the book ... that is except innovate a new business model to adjust to the changing realities. Sounds familiar - like the auto industry. I suppose the music and movie companies are going to get their bailout next - in the form of a censored, locked down Internet. <br /><br />Face the facts that technology is going to continue to give people the ability to share, collaborate, and do for themselves what they depended on corporations and government to do before. Instead of accepting this and gracefully finding their place amongst the commoners- they choose to hinder the natural progress of humanity to protect their position of power. Not just file sharing, but they are actively stifling all aspects of empowering technology - especially personal manufacturing.

[sxwarren]

Music industry execs were warned back in 1994-95 that Internet file-sharing of music was coming. A bunch of us, including buyers, were working at the corporate level on cross-department projects (IT, music, retail software) for a major corporate retailer. We weren't geniuses or mystical prophets or anything. We just knew what a lot of geeks knew. We mapped out the alternate futures that lay before these industry execs and urged them to start following a path toward online, fee-based distribution that would include their retail partners (like us - we were concerned about our own company's future). We figured that, as capitalists, they'd be eager to jump into something on the ground floor, to try to gain advantage from a new, paradigm-shifting condition in the free marketplace . We were naive.<br /><br />We were frankly surprised when their reaction was basically, "Screw that! We're not changing our business model. We'll just put a stop to anyone who tries to share music online!" Thus it was revealed (to me, at least) that these people aren't free-market capitalists, they're corporate authoritarians whose only desire is to control the marketplace and to maintain the status quo. Change is their enemy and they'll go to any lengths to stop it, including paying government (OUR government) to pass draconian laws that protect their established business models, stifle entrepreneurship and technical innovation - anything that might challenge their dominance.<br /><br />For me, the music industry has become a symbol of our times - established corporate oligopolies masquerading as free-market capitalists fighting tooth-and-nail to resist the natural changes in the marketplace that real capitalism would encourage, some of which changes human civilization desperately needs.<br /><br />And so it goes.

[michaelo1966]

When they came up w/ their "sue everybody" strategy I think they were stoned ... college style. I personally strongly disapprove of copyright piracy, having had my own IP stolen by big companies, but think the RIAA addressed the challenge stupidly. They only stopped when they realized many of their cases were losers. Next stop, mortgage servicing companies foreclosing on houses they don't own.

[SargeV]

I believe this is an example of the new American mindset where we no longer see opportunity but we'll make every effort to maintain the existing status quo. The comment by sxwarren says it as well as it could be said.

[v0dkacomradwe]

Wow. I feel so bad for the RIAA and the music industry. I think I'm going to go out and buy the first overpriced CD that I see, from the worst musical artists I can find. Would that make them feel better? Hah. For me, I just spent the other day ripping all of my retail purchased CDs to my storage device so I could safely stow the CD's away in a closet. I counted about 500+ CD's that I've bought over the last 8 years or so. Taking into account the cost of each CD, and I listen to some rare stuff, probably spent close to $10,000 on all of that. Then I thought, hey I don't even like every song that comes on each of these CD's...but I had to buy them ALL or none! Yeah most people have heard this before, and it is the reason why we have payable music downloads like Amazon, iTunes, etc. Like I just said yesterday, they started this whole stupid crusade first by attacking Fanning and Napster, then they are forced to end up embracing music downloading. If they had listened to age old advice of "the customer is always right", maybe the music industry could have listened and would have been in a much better position than to have to waste large sums of money and time by going after little kids and grandma's and grandpa's. The music industry is not suffering as much as you think. I do NOT feel sorry for music producers or label owners who are self-centered and greedy like many of them are, and I do not feel sorry for anyone like them or some of their artists who are forced to make decisions between being able to buy a Bentley or a Hummer decked out with 24K gold trim, $50,000 worth of IGNORANT looking gold tooth bling, 24K body piercings, or whether they should move into a $12,000,000 mansion or a $8,000,000 mansion. To most people, those aren't even real choices. It's about money, they want your money, and if they can't get it from you legally, reasonably, and fairly and they don't want to listen to your complaints and observations as customers of the music industry, they'll sue and extort and threaten. True there are people who download just to download music illegally, and they don't care about having any reasons for doing so. There's no accounting for EVERY reason why people do what they do. But for most people who do it, I would say it's more of a case of "sticking it" to the unreasonable little man or woman sitting in their multi-million dollar home or corporate office building whining about how they made $10,000,000 this year instead of $12,000,000 like last year. Hey music industry and RIAA, you either listen to the customers and HEED what they say, or you fail. Last thing, and I'll say it again, the music industry and the RIAA are not a legitimate form of government or law enforcement - do NOT be scared of them. And neither are your ISPs who the music industry wants to employ next to spy on you! And many of those people at the ISP work and live in the same city, county, State where you do - even your next door neighbor could be asked to spy on you if they work for your ISP! Talk to them about it! They do NOT have the right to spy on you or break into your home or business or any other network by employing scumbags like those who work for MediaSentry and their filthy ilk. They think by hiring expensive attornies that they can become government or law enforcement entities. Sorry, while yes you might say that there is never a good or fair reason to download music illegally, there is NEVER a good reason to go around having private corporations or any government or law enforcement entity spying on everyday citizens (ie 1984?). Lots of States in this great country are starting to restrict peoples' ability to file lawsuits over stupid things without any evidence or basis in law, you'd think the RIAA and the music industry after failing at the "law suit extortion" business would give up...but no now they're going to be wasting money by buying off ISPs to spy on you all, and in most cases it's just based on loose "suspicion". I am not saying that downloading music illegally is a Constitutional right, but over my dead body will I ever stand for mass spying on citizens by one another or the government, or especially a ignorant, self-absorbed, and insecure music industry.

[globalist_agenda]

Not even worth stealing. Can anyone recite the lyrics to a Janet Jackson song? After 20 years why does Janet Jackson still wear para-military costumes? Can anyone name a Britney Spears song other than "Toxic"? Does anyone remember the lyrics to "Toxic"? Do you like Biggie Small's rendition of "The Merry Christmas Song"?

[iamrta]

Firstly, I listen to the good, old sh*t on Sirius-XM. If I hear something I like I buy it. That aside...<br /><br />Who cares what Sherman thinks? Def not the 12 year old blasting whatever garbage thru his ipod nano. It's the same thing with video games. Some suit adds up all the estimated illegally downloaded files, multiplies them by the sales cost and makes a big chart with red arrows pointing down and says "golly g! look how much revenue we're loosing!" and takes another bite of his jelly donut.<br /><br />What those tards NEVER seem to get thru their this a$$ skull is that these kids would have NEVER purchased the music otherwise. They aren't loosing anything. I've talked to folks that download for a hobby...I know it's hard to grasp this concept...but they would never listen/play it if they didn't dload it. On the flip side if the files weren't available they wouldn't go to the store (online or otherwise) to purchase it. I would guess that most folks download because they never had the money in the first place. <br /><br />Go after the countries that make a living off of illegal software/movies/music/meds/weapons/etc/etc and just leave the measly ISP's alone here in the States. What a waste of time and money all THIS is. Nothing is going to change...blah...blah...blah...the sharing will continue. Even if they limit bandwidth there will be ways to share. I mean ya could just walk up and hand someone a Blue-Ray disc with all the music you own on it...