RIAA's anti-piracy ROI: expensive FAIL (and Anakin)

By Richi Jennings. July 13, 2010.

A blogging lawyer discovered that the RIAA's return on its legal fees has been negative. Very negative. Embarrassingly so. Dragging alleged pirates through the courts has recovered a pittance in damages, compared with the huge legal fees charged. In IT Blogwatch, bloggers ponder what it all means.

Your humble blogwatcher selected these bloggy morsels for your enjoyment. Not to mention Hayden Christensen's talent...

    Ray Beckerman has been digging about in the RIAA's IRS returns:

Ha ha ha ha ha. ... In 2008 ... the RIAA paid Holmes Roberts & Owen $9,364,901 ... Jenner & Block more than $7,000,000 ... Cravath Swain & Moore $1.25 million. ... There were many other law firms feeding at the trough too. ... [But] better than the numbers for 2007, in which ... $21 million was spent on legal fees ... $3.5 million on "investigative operations". ... And [in] 2006 ... $19,000,000 ... [and] $3,600,000.


For a 3 year period, they spent around $64,000,000 ... to recover around $1,361,000. ... Embarrassing.

Sebastian Anthony follows the money:

The RIAA ... is funded by the music industry. That $64 million -- instead of going to the artists -- ... [has] been handed to the RIAA to be squandered inefficiently and ... impotently.

  Of course, the other way of looking at it is that music pirates are putting food on the plates of these poor, useless lawyers who can't litigate to save their asses.

Mike Magee (or one of his acolytes) thinks different:

Imagine if all that money had been spent instead on ... trying to understand and communicate with the consumer. ... With that much money put into research and development, i.e., doing something positive instead of ... picking on people who can't afford senseless and expensive cease and desists, we may have been miles ahead of where we actually are today.


So far the RIAA has not managed to make a dent in piracy. ... What the RIAA does have is cash. ... People close to the music industry ... said that ... it's been throwing it around a LOT.

Matthew Humphries notes this is kinda old news, but it does explain a lot:

The high costs of legal action ... has already seen a change in the tactics of the RIAA. At the end of 2008 the organization decided to end mass litigation.


Its not the action they take against individuals that worries me. It’s more the attempts to implement new laws which mean more monitoring and less privacy for everyone.

Drew Wilson drew this conclusion:

If I was a shareholder of the RIAA ... I would argue that ... it’s really time to get the spending under control and rethink the strategy. ... This isn’t a philosophical point, it’s a point blank financial point.

But AndrewZ thinks we've got it all wrong:

If you think these lawsuits were about making money you would be mistaken. ... It was their intent to chill the climate of free downloads, and lose less money. In that regard the lawsuits ... probably stopped a lot more than $16M worth of downloads.

Which arikol debunks thuswise:

The threat of lawsuits does not seem to affect the people around me. ... Good, easy access to legal services HAS changed downloading habits. Spotify ... iTunes store, and other services have transformed younger people's usage. ... Everyone I know uses Spotify AND iTunes.


With these massive legal fees ... who foots the bill? Artists. ... [It] gets marked as operating costs, with lower profits coming from music sales.

And Finally...

A not-so subtle dig at Hayden Christiansen's acting talent?

Don't miss out on IT Blogwatch:

Richi Jennings, your humble blogwatcher
  Richi Jennings is an independent analyst/consultant, specializing in blogging, email, and security. A cross-functional IT geek since 1985, you can follow him as @richi on Twitter, pretend to be richij's friend on Facebook, or just use good old email: itbw@richij.com.

You can also read Richi's full profile and disclosure of his industry affiliations.

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