Why the RIAA Doesn’t Mind Losing Money on Lawsuits

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A document has been making the rounds showing that the RIAA paid more than $16 million to its lawyers while recouping only a fraction of it through settlements. While some might grin at this seemingly unfavorable outcome for the music industry representatives, the RIAA told TorrentFreak that the overall result of their efforts in court are in their favor.

It is no secret that the RIAA has been putting more money into their legal campaigns than they could ever get back from individual settlements or fines from file-sharers. Yesterday this was illustrated once again by a document that revealed how they spent millions of dollars on lawyers while they recouped just a few hundred thousand.

The question is, however, whether this is a laughing matter as some seem to think. The true aim of the RIAA has never been to gain financially from lawsuits against individuals, they wanted to make a statement and used the United States legal system as their ultimate anti-piracy campaign.

TorrentFreak contacted the RIAA to find out more about their side of the story and how they justify the millions of dollars spent in legal costs. Jonathan Lamy, Senior Vice President Communications at the RIAA, was kind enough to give us some insight.

“Before we announced the lawsuits, we spent years on various educational campaigns. PSAs. Magazine advertisements. Artists speaking out. Instant messages to millions of Kazaa users. You name it. We made extensive efforts to engage fans and inform them about the law. It made a little difference,” Lamy told TorrentFreak.

So, the next step for the RIAA was to go after people who shared songs online, to send out a clear message that they were breaking the law. Since everything else had failed thus far, they believed that suing thousands of people was a good way to communicate their message to the public.

“But it’s simple human nature that for some people – and I’m not suggesting everyone – when tempted to do something that is easy and anonymous and perhaps they do not appreciate that it is illegal, it is very difficult to their change behavior WITHOUT introducing the threat of consequences,” Lamy told us.

“Do you think people would not speed if there were no cops? You slow down more often than not because you think you might get caught.”

“I remember sitting in a focus group of college students and the moderator kept asking the students what would it take them to stop downloading illegally: more than one said, ‘You have to sue me or my roommate. We need to see first hand that getting caught could lead to trouble’,” Lamy said.

So the real question that should be asked is whether the RIAA actually got any bang for its bucks. If you look at the expenditure as an investment in an anti-piracy campaign it might actually not be as bad for them as it looks. Over the years tens of thousands of news reports carrying their anti-piracy message have been published in the mainstream media. No PR agency could have ever given them the massive exposure they’ve got from these lawsuits.

But was it worth it? The question still stands whether this PR has been an effective deterrent.

Although there are still a lot of people who share music illegally it would be hard to make the claim that the message had no effect on the piracy rate. The well-informed might not be scared as easily, but we can safely say that for quite a few people the press about million dollar fines might have been a scary enough reason not to pirate.

Whether the big music labels actually profited from the few percent less file-sharers is yet another question, especially when one doubts that there are any losses at all. The bottom line is, however, that the RIAA made a conscious choice to spend all these millions of dollars on lawsuits and that they believe that the money was well spent.

Luckily for those who kept on sharing the RIAA has stopped their actions against individual file-sharers. They claim that the music piracy rates have decreased enough and studies show that more people buy music instead of pirating it.

Nevertheless, the legal campaigns have been quite costly, and not only for the RIAA. In the process, the music labels hit thousands of people financially with settlements and the two file-sharers whose cases made it all the way through court are pretty much financially ruined.

The RIAA doesn’t seem to hold much compassion for these victims though, and appears to see them as collateral damage. “Well, there are thousands of folks who have been laid off because of the decline of the music business. That wasn’t pleasant experience for them either,” Lamy said.



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