Why the digital-download divide is only going to widen
Even on a run-of-the-mill day, a debate over the perceived rights and wrongs surrounding digital file swapping gets readers worked up. And I mean really worked up.
But ever since the Recording Industry Association of America prevailed late Thursday in its copyright lawsuit against a 30-year-old single mom with a couple of kids, all hell has broken loose.
I'll leave it to you to debate the relative merits of the case, but there's no denying that the recording industry sometimes can be its own worst enemy. It's almost as if the industry's hired guns were on a mission to justify everything critics say is wrong about the copyright system.
Check out the comments responding to the blog authored by my News.com colleague Declan McCullagh, reporting why the jury decided Jammie Thomas of Minnesota must pay $220,000 to six of the top music labels. Here's a sampling:
"These big record companies are pure evil, with a history of doing everything they can to screw the consumer and squeeze every penny out of them, just to buy Edgar Bronfman Jr. and his pals more yachts and limos."
Or:
"I don't think P2P networks, and uploading or downloading, is stealing but (rather) more of an alternative method to acquire art for your own listening pleasure. If someone is "profiting" from downloading/uploading art, then that is stealing. How is today's digital format different from recording a vinyl record onto a cassette? For yourself or for a friend? However, back in the '70s, the RIAA didn't sue people for doing this, and EVERYBODY did it!"
That was predictable. The recording industry argues that the law is on its side. But then it's goes out and backs up its claim by suing individual music listeners. Hello? Did anyone at the RIAA consider that this may not be the best strategy to win hearts and minds? Slash and burn, yes--but this isn't the Mekong Delta, folks. I found myself closest to this poster, who argued:
Back in the '70s, everybody did it--it was no less stealing, but it was also much more difficult, and the quality typically wasn't nearly as good...If I wanted to make 50 copies for my friends, it would take hours and hours.
If I want to give 50 copies to my friends now, the e-mail group takes seconds...It's a different environment, and RIAA had to evolve in strength and ability to meet that environment...Sharing only goes so far--and it's much easier to share the property of others...Were someone to move into my garage or living room, and start taking my leftover pizza from my fridge, "share and share alike" ain't gonna be the first thing on my mind.
The last time I looked, these folks were still debating the finer points of this dispute. I don't want to get stuck in the legal weeds, but my immediate problem with the verdict is that the punishment is disproportionate to the crime. If my math is correct, we're talking up to $150,000 per willful act of infringement when the purchase price of a music download is 99 cents.
The bigger question is the absence of any consensus in this country about the proper rules of behavior governing digital downloads. When it comes to digital music, what constitutes fair use, and what constitutes theft? I know what the law says, but most people don't bother consulting the U.S. Code.
The recording industry won a controversial copyright conviction, but this is a brief chapter in a endless saga. The only safe bet to make for now is that the divide about what we ought to do will only widen.
Charles Cooper has covered technology and business for more than 25 years. Before joining CNET News, he worked at the Associated Press, Computer & Software News, Computer Shopper, PC Week, and ZDNet. E-mail Charlie. 
Believe it or not, though it has been four years, the RIAA entered its first jury trial this week. The (alleged) industry association had had its challenges and because of their deep pockets to pay their lawyers, they have forced many people charged to settle out of court for small amounts.
Despite the extreme risks involved with challenging the RIAA, lawsuit recipient Jammie Thomas chose a to defend herself against the RIAA in court. Opening arguments in her case, Virgin v. Thomas, started this week and ended Thursday..
Ms. Thomas, one of just 26,000 people the Recording Industry Association of America has sued over the past four years for alleged use of music ?file-sharing? software, was accused of swapping 1,702 songs and she stood firm about proving her innocence, despite a possible liability of nearly $4 million. She is the first to refuse to settle and she forced the music industry into a trial.
?I refuse to be bullied,? she said this week. ?I know that I did not do this, and the jury will hear that I did not do this.?
The jury verdict was rendered on Thursday, and they sided with the recording industry and levied $222,000 in damages against Ms. Thomas.
They ordered Thomas to pay the six record companies that sued her $9,250 for each of 24 songs they focused on in the case. They had alleged she shared 1,702 songs online in violation of their copyrights.
Ms. Thomas' attorney, Brian Toder, argued at closing that record companies never proved that "Jammie Thomas, a human being, got on her keyboard and sent out these things."
Okay, a courtroom victory for the RIAA. But certainly a PR disaster is awaiting in the wings as the public reads about this. Most people realize how completely useless the decision rendered is, in regard to actually trying to stop file-sharing and P2P usage here and everywhere else in the world. The financial amount Ms. Thomas is supposed to pay is also ridiculous. I imagine it isn't enough to cover the RIAA's legal expenses for the trial.
" We think we're in for a long haul in terms of establishing that music has value, that music is property, and that property has to be respected." said Cary Sherman, RIAA President.
The long-haul indeed Mr. Sherman. But you'd better hurry and get all those people in court. For the first nine months of this year, overall sales of albums are down 14% from last year at 337.3 million albums sold, according to Nielsen SoundScan. Of that total, 300.6 million were CDs. The number of digitally downloaded tracks rose 46% from the same period in 2006 to 612.2 million. But alas Mr. Sherman, there just aren't those big profit margins built into sales of digital downloads.
If physical CD sales continue to slide as badly in the next few years, the RIAA won't have enough money to sue people because more labels will continue to lose revenues. At some point, those RIAA dues have to be questioned. (Especially those exorbitant lobbying expenses that could run over $1,000,000 this year)
This is something the RIAA will gloat about in the media over the next few weeks, and it will no doubt result in more people deciding to settle (for just a few thousand dollars) than fight them in court.
And the result will be? Absolutely nothing will change. Nothing has changed since all the lawsuits started. All the research out there from a variety of different sources has shown time and time again that file-sharing and P2P usage has not declined at all here or anywhere else despite all the RIAA lawsuits and the media coverage to the contrary.
So while the RIAA fiddles in the nation's capital, the rest of "Rome" is burning all around them. While their lawyers have cocktails tonight and celebrate this miniscule victory, they should keep in mind the war against illegal downloading was lost years ago. In the end, no matter how many more court battles they fight and possibly win, it's all quite meaningless in the big picture.
But then, what else does the RIAA have to do these days except battle these download criminals and have lunch and dinners with those politicians they lobby? Are they doing more than that?
If so, please tell me.
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Steve Meyer
President/CEO - Smart Marketing Consulting Services
Publisher - DISC&DAT - A New Media Newsletter For The Music Industry
Available at: www.freewebs.com/stevemeyer
Editor, Digital Technology: www.allaccess.com
Las Vegas, NV
E-mail: stephennmeyer@earthlink.net
I realize that the majority of your readers are probably upset with this news from Duluth.
I read an article this morning in the New York Times and thought I?d share my response with you.
I understand both sides of this debate (I really do). I have a 20-year-old son and a 16-year-old daughter who have been taught that many copyright holders are evil and greedy.
And some are. I?ll grant you that.
But the vast majority of us are just out here trying to make a fair and honest living. And what we do is license our hard earned works to others for their personal enjoyment, productivity, and/or education.
No one has forced anyone else to take our works. The sytem works fine. There just isn?t any room for piracy. Piracy is wrong. Piracy is stealing.
Thanks for taking the time to listen to all sides of this argument.
George
***********************************************************
Good morning, Jeff
You did an excellent job of simplifying one of the most significant business events in quite some time. You see, my small graphic arts development company presented the exact same issue to the U.S. Supreme Court back in 2003, about the same time as the Recording Industry began their legal assaults. Our case was rejected. Many of the judges had no idea how significant this issue really was at the time.
I understand why so many people think the tactic of suing almost 30,000 people is unjust and unfair ? especially as they watch Spector wandering around in his mansion in LA with money falling out of his pockets. But these suits aren?t just for the middlemen and recording labels. They are also for the artists as well. They get paid based on the legitimate licensing of their hard earned works.
These labels have actually been given little or no choice. Many of the anti-copyright crowd have simply taken the approach of ?you can?t stop us? or ?we?ll steal anything we feel compelled to steal ? online or offline.?
And for a select group of copyright defense lawyers, these folks are easy prey. Do you think they expect to be paid win or lose? They mislead their vulnerable clients into thinking they can outwit the law. It is shameful in my view.
The answer is simple. The tide has turned. Copyrighted works can now be obtained legally online for very, very reasonable prices. I think I read recently that a popular song can be obtained from Wal-Mart for 85 cents. Come on. Why would someone choose to steal it instead?
Movies, videos, clipart illustrations, photographs, short stories, poems, cartoons, magazine articles, books ? the whole lot has seen the light and realized the potential of this wonderful new worldwide distribution system we call the Internet. Digital distribution is, indeed, the wave of the present, and the future. Arguments that we, members of the copyright industries, simply are behind the times is old news ? and no longer applicable.
And even people behind the times don?t deserve to be robbed by the masses who think they are ?in the know?.
I believe these rulings by a judge and jury will do more to curtail rampant copyright infringement in this country than almost anything I?ve witnessed in the last 4-5 years. When I hear folks say the recording companies strategy is not working because there are more music infringements now than there were 4 years ago when the lawsuits first started, I have to cringe.
They are ill-informed. Our industry (electronic graphic arts content - clipart illustrations, design templates, digital logos/symbols, and animations) has seen a 20 fold increase in Internet piracy since 2003. For every 1 pirated clipart illustration or photograph in 2003 there are 20 today! That?s one of the few negative aspects of the world?s switch to broadband.
To see that the music industry has only increased by 5-10% is phenomenal and proves to me that this strategy is, indeed, working for all of us.
Congratulations, Capitol Records, Sony, and Warner Brothers. I know you have taken a lot of heat over the past few years. But for the 400,000+ of us in the electronic graphic arts industries, who depend on honesty and fair play to make our livings, we want to deliver to you a great big ?Thank You?.
Keep up the good work.
George P. Riddick, III
Chairman/CEO
Imageline, Inc.
griddick@imageline2.
don't have any P2P software on your computer, I don't think it
would be easy for someone to acess your music. And the odds
you'll actually get busted for it are even greater.
I don't have much sympathy for people who download music and movies illegally, but we are going to have to face facts: big jury awards against single mothers are doing nothing but tarnishing the already rusted image of the RIAA/MPAA.
They need to start putting more old movies, music and games online for viewing for free or for a nominal charge (not 1 buck a song and 2 bucks a show!) like Yahoo's Music Unlimited service does.
I would be willing to pay up to 150 dollars a year for all the downloading of old movies and music that I want, and up to 5 dollars for a very old FPS or other game like Undying (which I bought online for only 3 bucks!).
I know I'm not alone in this: I will never again buy a CD from an RIAA-affiliated label. This outrageous court decision has sealed it for me and many others. I will buy non-RIAA-affiliated music, and the rest I will "steal."
It should be "an endless saga," since a word starting with a vowel comes after another single-letter vowel word.
private ownership mode 3. Google it - great training to balance
demands.
You know, I have never agreed with the folks at the Electronic Freedom Foundation, or other groups who seem dedicated to changing the long standing laws of copyright protection in this country. But I have noted one thing.
Their allies seem to include some of the brightest young minds in this country. From the law professors and students at Stanford, Berkeley, Harvard, Duke, and others ... to the lawyers at some of the most prestigious IP firms in the land ... to the engineers and scientists at some of our leading technology companies in this country ... the intellectual brainpower in this self-described "new wave" group has been impressive.
How this group could allow a strategic blunder like what we've just seen come out of Duluth is beyond me. Why these organizations didn't get involved, study the case thoroughly, and encourage Ms. Thomas, and her obviously inexperienced attorney, to surrender is truly phenomenal.
This is not the individual, the attorney, the forum, or the time I would want a precedent such as this established. What a strategic blunder!
Maybe these people are not nearly as smart as I gave them credit for. Apparently, they all sat back and naively thought (make that "wished") that Ms. Thomas would somehow end the RIAA onslaught forever.
Don't get me wrong. I applaud the decisions made by both the judge and jury in this precedent setting case. The anti-copyright crowd will suffer the consequences of this loss big time. Our economy will be strengthened. And these decisions will do more to help curtail widespread Internet Piracy than all the politicians, copyright industry executives, and lobbyists in this entire country put together.
I thought good lawyers advised their clients of the downside of their attempts to "change the law of the land" and could be sanctioned if they chose to pursue only "the big payday" or their personal "15 minutes of fame" instead. Read the copyright laws. Displaying and downloading copyright-protected works owned by others without their permission is illegal. It has both civil and criminal consequences. And, as in the case of Ms. Thomas in Duluth, they can be severe. She will have to pay back nearly $500,000 by having her pay check garnished for the rest of her life.
But she doesn't get any sympathy from me. If she had taken this many copyrighted songs out of Best Buy or Wal-Mart, she'd be in jail right now. And owe back a like amount of money as well. None of us - right or left - want to live in a lawless society. It's interesting to debate legal principles and consequences, but fearing to go outside for a cup of coffee or a loaf of bread is not something we have had any experience with in this country at all. Thank goodness!
And if you don't think organized white collar crime families are behind much of this Internet piracy epidemic, you'd better think again.
COUNTERPOINT:
Here is the one issue I have discussed with my 20-year-old son and I do have "conflicts" with. Google infringes more legitimate copyrights every single day than Ms. Thomas could do in a lifetime. Do we now have a country that has completely different standards for the billionaires than we do for the normal working folks? If so, I sure hope this is short-lived as well. I think I'd rather give up the coffee and the bread than have to worry about Google stealing from me every single day.
What's your opinion?
George P. Riddick, III
Chairman/CEO
Imageline, Inc.
griddick@imageline2.com
What I am though, is a consumer. Unfortunately, due to my advanced age of 30, nobody really seems to be interested in catering to my entertaiment needs anymore. I suspect that you have a similar problem. We're just not the target demographic. Your kids are, as are my younger siblings. Now, you may want to to applaud the ridiculous fine for 24 songs, any of which easily recorded off of the radio by the way, but the 15-22 year old demographic clearly won't. Given that target group's penchants for rebellion and illegal downloads, who do you really think made the strategic blunder?
It's perfect EFF strategy as now it will be heard in a higher court, has public sympathy and outrage, and the appeal will set precedent w/ twice the weight...
AND - She may not be guilty! 2 years ago, a SONY CD compromised my system and hackers then used my computer to dish out music and porn for over a week...
And RIAA didn't score a victory...because their rabid pit bull tactics are scaring EVERYONE... and the backlash from this is likely to cost them 100x the settlement amt. (which they'll likely never see more than a few grand as you can't get blood out of a turnip...)
Oh - and thanks... been wondering how to contact her without the city name... and didn't even think to volunteer my story to EFF for future use...
--Poke
It's all about fair use, portability, and the consumer's rights to backup their content... (if it weren't so danged expensive, we probably wouldn't care!!!)
If RIAA would devote 1/10th the $$$ and effort working WITH the mfr's and consumers instead of trying to milk us for every cent... (then sick their lawyers on us, trying to get more...)
CDs were supposed to usher in this age of cheap music that lasted forever... CDs now cost triple what they did when they were introduced and the new discs are 10x more scratch prone and now so flimsy I've actually broke one taking it out of the case.
And they want us to pay the SAME or more to download this music, locked to one user, one device, waiting to be wiped out by the first Windows re-install. (Um... why more when there's no shipping, no printing, no production, no warehousing... and I pay for the disk and case?)
This is why I haven't bought a new CD in over 10 years, never buy DVDs, and download maybe 5 songs a year... figure no need to support the school yard bully when many starving artists are better than the commercial artists and give their stuff out for next to nothing...
Figure it's only a matter of time before RIAA sends their goons to cut out their vocal chords, break their fingers... and poke their eyes out... (only a small step from their tactics today!)
I played a SONY CD on my system & it installed a backdoor/rootkit that hackers used to hijack my computer and share music and porn for at least a week before being discovered.
I've let house sitters, friends and relatives use my computer and later discovered they installed napster/kazaa, etc. on my PC or helped themselves to a few MP3s...
This is why I've stopped buying new technology and music. The newer TVs and hi-def players have built-in DRM self-destructs... (you can verify this online!) While all claim they're not using them, local repair shop says he begs to differ. (his words, not mine!) And even if not being used now, they could easily be switched on any time in the future by merely popping in a DVD.
And in closing SONY made a HUGE mistake- cause I'll never buy another SONY branded ANYTHING ever again... and EVERYTHING in my house is SONY.... well, was. And now Sony has proven lack of morals/values towards their customers... and damaged my PC and frustrated the HLL out of me in the process.
- Think about your local library
- by hedgehog61 October 8, 2007 5:04 PM PDT
- The issue for the RIAA is revenue. For every song that is downloaded for no charge (i am not here to debate legal or illegal) is revenue NOT EARNED.
- Reply to this comment
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(16 Comments)I liken this model to the local library. Publishers have vehemently fought Google tooth and nail to keep their online book project from succeeding. They fear the same lost revenue as the recording industry. Yet I can go to the library and check out a book for free. NO REVENUE to the publisher. The result is exactly the same if I go to the library and check out a book or download for free from Google(or wherever). The publisher sees NO REVENUE.
So what is the big deal? Is it stealing or not. If I let my friends borrow my cd's and they rip them to their pc, NO INCREMENTAL REVENUE to the recording company. Same result without using Limewire or whatever.
I believe that while the RIAA is trying to make a big deal out of this, there is really very little ethical ground for them to stand on given all the ways that music, or books or any media can be obtained.
Finally, you could take this to any extreme you want. What if I lent my neighbor my rake. The rake manufacturer could sue me for a revenue opportunity lost. You get the picture.
This whole issue is absurd. Once the product is purchased by someone, it is theirs to do with as they please. This issue will ultimately be decided in the court of public opinion as the free market will punish onerous DRM or fair use laws.
Just MHO.