New tax records reveal that the Center for Copyright Information, the outfit overseeing the “six strikes” copyright alert system in the U.S., costs $2 million a year to run. This previously undisclosed sum is shared between the RIAA, MPAA and the five participating Internet providers. The true cost of the copyright alert system is expected to be millions more, as the copyright holders and ISPs pay separately for tracking the alleged pirates and processing the warnings.
Two years ago the MPAA and RIAA teamed up with five major Internet providers to announce their “six strikes” anti-piracy plan.
The parties founded the Center for Copyright Information (CCI) which is incorporated as a non-profit company of the same name in Delaware.
While the CCI has been very clear about its goals, information on its finances has been scarce. In the memorandum of understanding the copyright holders and ISPs agreed to split the costs of the company 50/50, but the exact figures remained unknown.
When we previously asked about total operating costs CCI declined to answer. Luckily the IRS was more helpful, so after two years we can now finally lift the financial veil.
TorrentFreak obtained the most recent tax filing of the six-strikes outfit which covered the first eight months of the company’s operations to June 30, 2012.
During this time the ISPs and copyright holders paid a total of $1,377,633 in membership dues, which means that it costs around $2 million per year to keep the company afloat.
The $2 million figure makes sense since the RIAA previously mentioned in its tax filing that it spent $250,000 in CCI membership dues up until March 2012. This would cover half of the $500,000 it would owe per year.
The CCI tax filing further shows that Executive Director Jill Lesser is the only key employee, and that she earned a very modest $43,750 during the first eight months. Looking more closely, we see that Lesser indirectly earns a bit more as $193,750 was paid to her consulting firm JAL Consulting.
The filing further shows that the six-strikes outfit paid $144,093 to their PR firm Glover Park Group, $125,691 for Resource Global’s consulting services, as well as $102,928 in legal fees.
All in all there aren’t too many surprises in the tax filing, although it’s worth knowing how much the six-strikes copyright alert system costs.
It’s not known whether the $2 million in membership dues for the first year is a fixed amount, so it may fluctuate from year to year. Also, it’s worth noting that the costs above only apply to the CCI organization. The copyright holders and ISPs incur extra costs when they track down infringers and process the notices.
In other words, copyright holders and ISPs are likely to spend double or triple the previously mentioned $2 million on the entire six-strikes system.
Now that the first accounts are in we encourage the CCI to also share some data on how many people have received a copyright alert to date. But whatever that number is, for now the copyright alerts have failed to make a dent in traffic to file-sharing sites.