RIAA: Our anti-fan lawsuits are costing us millions

During yesterday's RIAA trial proceedings in Virgin v. Thomas, Jennifer Pariser, Sony BMG's the head of litigation. admitted that the 20,000+ anti-downloader lawsuits run by the labels had cost the companies "millions" and were enormous money-losers. I had previously heard from an industry insider that they were running the suits on a break-even basis, shaving costs by running a sloppy boiler-room operation that used cheap telephone thugs and flimsy, badly assembled evidence to extort a few thousand bucks from each of the victims, just barely breaking even.

The next line of questioning was how many suits the RIAA has filed so far. Pariser estimated the number at a "few thousand." "More like 20,000," suggested Toder. "That's probably an overstatement," Pariser replied. She then made perhaps the most startling comment of the day. Saying that the record labels have spent "millions" on the lawsuits, she then said that "we've lost money on this program."

The RIAA's settlement amounts are typically in the neighborhood of $3,000-$4,000 for those who settle once they receive a letter from the music industry. On the other side of the balance sheet is the amount of money paid to SafeNet (formerly MediaSentry) to conduct its investigations, and the cash spent on the RIAA's legal team and on local counsel to help with the various cases. As Pariser admitted under oath today, the entire campaign is a money pit.

Link

• [sirdook]

  Spoon,

  You have no more evidence for your claim than you have in the opposite direction. Not everyone who was sharing music on Napster was doing so to the exclusion of buying CDs. Indeed, some people had to be buying the CDs in order to put them on Napster. And while the number of Napster users may have decreased as dramatically as you suggest, many people immediately migrated to other file sharing programs and, as you yourself say, are now using bit torrent.
  For my part, I never made much use of Napster – I only used it if there was a song I really wanted to listen to (usually older songs that weren’t in constant radio rotation) but didn’t want to buy the whole CD. And I’ve got a huge CD wallet full of CDs I bought before them. As a result of the RIAA lawsuits, I no longer buy CDs, nor do I download the tracks from file sharing. I don’t even give CDs as gifts anymore.
  I use eMusic exclusively, so I’m not buying any major label stuff. And for someone with tastes as pedestrian as mine, that’s quite an accomplishment for the RIAA.
  How many more people are there like me? I have no idea.

• [Cory Doctorow]

  Civil statutes are exercised at the discretion of the plaintiff for a reason. If a copyright holder chooses not to exercise their copyright to sue infringers because those infringers are also their bread and butter, that’s not a bug, it’s a feature.

• [Nick D]

  Leaving the legal niceties to those better versed than I, let me just say that practically speaking, the record companies have definitely alienated much of their prospective market.

  There are many who, even if you could convince them that sharing music is simple theft, would still want to stick it to the record companies for suing high school students, the elderly, etc. Hideous and reprehensible.

  And if you want to talk about it being just, I’d say that justice is supposed to be blind and measured, not partisan and vindictive.

  Per the many copies of music CDs I’ve made, received, and distributed: I firmly believe that 1) they do not represent a substitution of the sale of these CDs, but an adjunct to it, and 2) they have inspired others to go out and buy CDs by these artists, artists they would never have even known about without this “loss leader” provided at my expense.

• [tlang]

  How does the industry address it or how do consumers? I think the industry thinks of it as a physical object OR a license, whichever is most convenient for them at the time. They want you to pay for each and every format separately. They want you to pay every time you listen to your copy. They want you to pay every time you hear a song playing anywhere– on the radio, on TV, or in a bar.

  On a philosophical level, I believe the recording should be as near perfect a capture of the original as possible, and you buy a license to it, and once you’ve bought it you can have it in whatever format you want. An inferior recording should be returned to them as damaged goods.

  On a practical level, I can look at my options and make the decision that’s best for me. I can buy it new on CD for $15, on iTunes for $10, maybe on tape for $8 or used for $6, and i’m willing to accept that for each drop in price i get a drop in quality. I wouldn’t buy a lousy tape for $5 and then think I could download a lossless recording for free. I would however expect that if I owned a copy on CD that I could download a CD or lesser-quality version online for free. But I believe that has already been proven as infringement by previous cases– MP3.com, for example.

• [Cory Doctorow]

  Put another way: copyright wasn’t enacted to ensure that rightsholders sued every infringer every time; but rather to ensure that rightsholders had the discretion to sue those infringers whom they believed were a net drag on their business. If copyright was meant to be universally enforced, it would be a criminal statute, not a civil one.

• [Nick D]

  PS: (@29) If you want to discuss the ethical or legal aspects of giving away copies of CDs (and I really do respect anyone who even has ethical positions in this day and age) please address comments to Cory–he’s much more knowledgable than I. But I think the discussion above has sort of covered that already.

• [Dave X]

  My beef has always been that the RIAA’s claims don’t represent all uses of file-sharing, and that for many of us listening to more fringe music (experimental, avant-garde, etc) things like bit torrent have been a real blessing. There are MANY labels dealing with this sort of music who encourage the file-sharing. It’s not all just kids ripping off Metallica, no matter what the suits would have you believe.

• [Cory Doctorow]

  There’s plenty of evidence that the most avid file-sharers are, generally speaking, the most avid music consumers, in all fora: most active used-CD buyers, radio listeners, concert-goers, and new-CD music. They’re just three sigmas over and above the rest of us on all the graphs of music consumption — the 20 percent who do 80 percent of music-related activity.

• [danipark]

  huzzah!

• [abb3w]

  Forlain: Music labels and the bands should start seeing downloaded music as cheap marketing, at least partially.

  No, they shouldn’t. It’s not. For many potential consumers, a downloaded-for-free 128kbps MP3 is a perfect substitute good for any higher quality version on CD. If I could get Jimmy Rogers recording of “Kisses Sweeter Than Wine” for free, and perhaps his version of “Windmills Of Your Mind”, I’d have no interest in getting the rest of his work; it’s just not that appealing for me on the whole. It’s only “marketing” if it induces people to pay for something.

  On the other hand, I’ll agree they may have to seriously revise their business models if they want to make money. Turn a blind eye to 64 kbps and lower MP3s, and any “internet radio” station who uses them. Cut or remove the royalties charged for radio broadcasts of complete songs. Routinely release multiple editions of albums — one bargain bin with just the band, album, year, and label printed on the CD; one with decent cover art on the CD; and one “premium” edition in a DVD-size case including the mix tracks, a flyer with individual art for each song, and/or whatnot — priced to different levels of audiophile. Provide substantial discounts in prices to public libraries for buying CDs. And, yes, kill the idiocy of DRM. The labels need to get more people listening to music again, and rethink where they’re adding the value to the transaction.

  They need creative thinkers, who are generally worth their weight in Osmium– if not their volume. As Heinlein put it, they’re competing for the Beer money, which says a lot about how hard the problem really is for marketing to their ideal college audience. And instead of hiring brains, they’re hiring lawyers, who merely scrabble for a bigger piece of a shrinking pie– and, of course, want a slice of their own.

  Maybe the dodos will be willing to share an apartment with their cousins the dinosaurs in order to make some room for the RIAA on the other side….

• [Michael]

  This discussion, being off the front page, is probably dead, but I like your answer, Phasor3000. I disagree with your conclusions, but now you’re actually speaking to the root situation. Your view is that in order to avoid further degradation of the social situation, people should refrain from doing “bad” things. Sure. They should. I agree. We still disagree on which things are “bad”, but we have found common ground.

  As to your point that copyright existed long before the downloading era — yes. It did. In much, much more restricted scope. And why do they call copyright extension bills the “Mickey Mouse Protection Act”? Because bad actors want to maintain a death grip on imaginary “properties” which guarantee them rent money, for free, forever. Case in point: Disney doesn’t pay royalties on the intellectual properties they bowdlerize with every one of their movies, because they’re rifling through our common heritage. But if your daycare wants to paint Pocahontas or the Little Mermaid on their wall, they’d better not come to the lawyers’ attention.

  But your larger point is one I disagree with intensely, and that is the notion that legal rights define morality. I simply do not believe that it is wrong to violate the legal rights of a company per se. I do agree that the formal law usually matches pretty well with morality — that’s what it’s for, after all — but particularly in the last couple of decades, it’s much more likely to reflect rent-seeking behavior on the part of corporations.

  And that is the situation I heartily commend Cory for attempting to change. I don’t like your attacks on it, because I think they’re fundamentally wrong-headed. And I most certainly don’t like the prissy tone you adopt.

  But all that said, I am quite favorably impressed by your last reply. That’s arguing to the substance instead of trying to use silly rhetorical feints. Good show.

• [phasor3000]

  No one (at least not me) is arguing against your right to decide whether to enforce the copyrights on your work. But again, my question is, if non-enforcement of copyrights helps to encourage disregard for copyright law, which would make it more difficult for authors who do wish to enforce their copyrights to do so, do you think this is (a) good, (b) bad, or (c) don’t care?

• [phasor3000]

  I asked what most people would regard as a simple question:

  Do you think it is wrong to download an mp3 which someone ripped from a copyrighted CD, where the person downloading the mp3 does not own a legal copy of that CD?

  Cory said:

  Phasor@52: Which person? Which CD? Do I get incensed over kids who download their favorite TV songs? No. Or people hwo download music they own on vinyl (technically illegal)? No. The jazz fan downloading bootleg rarities of a band whose every CD she owns, who has attended fifty concerts by that artist, etc? No.

  I could be more specific (e.g. what about a 25 year old American with a job downloading an illegal 128 kbps mp3 copy of Sonic Youth Daydream Nation, which they do not and have at no time owned in any format, where the downloader and the server are both located in the US?), but I think you’ve made my point by your sheer evasiveness. If you want to have the last word, go for it. Thank you.

• [johen]

  Cory, to me the battle here isn’t record companies on the brink of collapse, publishers giving away books for free in the hopes that internet good faith drives sales, or DRM. The issue for me is simple: it’s just plain wrong to take stuff that you haven’t paid for. Forget semantics of whether or not it’s “theft” for a minute and just ask the moral question.

  Trying to pass off the act of downloading stuff that should be payed for but isn’t as somehow ok since you otherwise bought lots of other stuff is avoidance at best, malicious at worst.

  And please, spare me the line “The point of being an entrepreneur is to pick the strategy that makes you the most money, not the one that ensures that you have maximal control.”

  Do I have to post links to all the times where you lambast companies for doing things that make the most money, but inconvenience you? Example: Aren’t phone carriers simply being entrepreneurs trying to make money by locking the phones to their networks.

  Finally, if it’s no biggie to you that the pirates (your word there) take your work and make money off it, why license it at all?

• [Nick D]

  “For many potential consumers, a downloaded-for-free 128kbps MP3 is a perfect substitute good for any higher quality version on CD”

  Sadly, that’s true, although I for one still insist on non-compressed files and have little use for MP3′s.

  But yeah, why not have a price structure with many tiers? That’s just sound marketing and has been used by other industries very successfully.

  That store-brand ketchup you buy because it’s cheaper than Heinz? It’s likely made by Heinz, who have created another niche at another price point, instead of trying to wring more from their current structure by hook or crook.

• [phasor3000]

  Cory:

  If “theft” isn’t “murder” because there’s a different outcome, then “infringement” isn’t “theft” because one results in the loss of physical goods that cost something to manufacture, while the other is a civil offense that represents, at worst, a potential lost sale, but this is by no means a foregone conclusion.

  There are plenty of precedents for referring to illegal copying of information as theft. For example, theft of trade secrets. Theft of a customer list, a private database, or other proprietary information. The owner is not deprived of their original bits, they are merely copied, but by making illegal copies of them, the owner is harmed — their proprietary information is devalued.

  The argument that people who make illegal copies are fans who generally consume more legal music than other people seems like an admission that harm is being done, but that a side effect more than compensates for the harm. If the media creators want to use that model, e.g. give away free stuff to whet consumers’ appetites (e.g. amazon.com music samples), that’s great, but ethically, it’s the creator’s decision to make, not the consumers’, if only because it encourages self-serving claims like “I wouldn’t have bought it anyway, so they’re not losing any revenue.” If I use that logic, I can spend all my disposable income on other stuff (stuff that can’t easily be pirated, e.g. beer) and then say hey, CDs are overpriced, so I couldn’t have afforded to buy them anyway. And you know there are people spending $300 a month on their cellphone bill who listen to tons of illegally downloaded mp3s yet claim that they wouldn’t have bought any of them anyway. Doesn’t it seem odd that people spend huge amounts of time, effort, and words to exercise and defend their “right” to download things which they claim aren’t good enough to pay for?

• [Bob]

  Cory, I disapprove of your inflammatory headline: “anti-fan lawsuits”. They may be fans, but they’re also (in the cases where the lawsuit claims are correct) thieves.

  I have no disagreements with you over the heavy-duty suckage that is DRM. I don’t want to buy or (legitimately) download some music because I don’t want rootkits and other mysterious restrictions crippling my ability to enjoy it at a later date. That being said however, I also have no disagreement with the record companies wanting to control the “first-buyer” (vs. sharing among people who know each other personally) distribution of the music that they own. They just need a better way to do it (and they’re not there yet… right now, they’re going the wrong route trying to invade other people’s PCs and limit the number of times stuff is copied, etc.). I don’t have a solution for them, but I think it’s unfair to demonize them like you do.

• [Dave X]

  ABB3W–

  Doesn’t make much sense to me to have the music industry manufacture 4 kinds of releases when they can barely move one. More artists just need to realize that they can make and release an album WITHOUT these ridiculous labels. Tour, use the net, share some downloads, make music people actually want to hear– these are all REALLY good places to start.

  Instead, folks are sitting around worried about the best model for a bloated, useless industry to foist more artistically-devoid crap on us is. 30 years ago, a good band couldn’t avoid releasing through these guys– there simply wasn’t an alternative. Now there is, so the Radioheads can connect directly with listeners, and the Britneys can work with Sony to figure out how to shine a turd.

• [Cory Doctorow]

  Bob, see above — the heaviest downloaders are also the most prolific buyers.

• [Nick D]

  I think it’s really quite a stretch to equate copyright infringement with general social decline. I see a big leap being made by some commenters when they conflate legality with morality. The two sometimes converge, sometimes not.

  It’s in neither the law’s nor morality’s domains to agree with the other’s conclusions or to support one another. This is a mistake made by the right all the time: law = morality.

  I would take exception with this part of Michael’s IMO otherwise excellent post:

  “I do agree that the formal law usually matches pretty well with morality — that’s what it’s for, after all.”

  They do often converge, as I said, but the law’s purpose is not to define or administer morality, except in the case of laws specifically designed with that purpose, like public decency laws.

  Copyright law, for example, has nothing whatever to do with ethics. It has to do with protecting the rights of copyholders, which in return is intended to encourage innovation. It’s fundamentally about economics, and leaves any ethical considerations completely out of the picture.

• [Cory Doctorow]

  Also: infringement isn’t theft. That’s why we have different words for them. If you call infringement “theft of copyright,” then why not call murder “theft of life,” or jaywalking “rape of traffic?”

• [Nick D]

  PS: (just to clarify…)I’m not saying that laws can’t or shouldn’t have ethical bases, and I’m not saying they should, I’m saying that in general they don’t, at least in the Western tradition, because laws often are means of mediating disputes and mediating between conflicting ethiical systems, and so often try to stay above tthe fray in that sense.

  Sorry to go on at such length.

• [abb3w]

  johen: So what Cory? Because they spend more on music it somehow makes it o.k. for them to download stuff they should be paying for? One simply has nothing to do with the other.

  Depends what you mean by “one”, “the other”, and “should”.

  First: no, that they spend more on music doesn’t make it legal, moral, or even non-fattening to make copies against the will of the copyright holder. I don’t think Cory’s trying to defend that. What I think he would defend is the idea that it may be in the copyright holder’s interest to allow for some copying. That is to say, some of the copies that the RIAA is trying to discourage, it would be in the best interest of consumers, RIAA members, and music artists alike to allow; IE, that people should be able to do it.

  “People who download lots of music (legally or not)” and “people who buy lots of music” have in common is they both enjoy music. To repeat something I said above: “if the RIAA want people to buy music, they first must have people who value music”. If people don’t encounter music, they won’t know to value it; if they don’t value it, they won’t be willing to cough up their dough for it. Demand price curve drops to around zero, because no-one perceives any value to the product.

  Of course, if everyone expects music to be free, then price expectations again force the price curve to drop to about zero. Oops.

  The RIAA needs to find a middle ground. They are failing badly. My suspicion is it’s because they have lost too many people with the talent to judge musical quality, and hired on too many dumb hack MBAs.

• [johen]

  There’s plenty of evidence that the most avid file-sharers are, generally speaking, the most avid music consumers, in all fora: most active used-CD buyers, radio listeners, concert-goers, and new-CD music. They’re just three sigmas over and above the rest of us on all the graphs of music consumption — the 20 percent who do 80 percent of music-related activity.

  So what Cory? Because they spend more on music it somehow makes it o.k. for them to download stuff they should be paying for? One simply has nothing to do with the other. By your logic, it’s ok for me to copy your books and sell it under my name in violation of the CC license, just as long as I buy plenty of other books.

• [Teresa Nielsen Hayden/Moderator]

  Oooooh, it’s Phasor and Johen talking tough again (yawn).

• [Music Donations]

  It may not solve the problem, but this will help!

  Music Donations

  http://www.musicdonations.org

  Have you ever downloaded, copied or pirated music?

  Do you feel guilty the artist never received payment for their work?

  Would you like to donate money directly to your favorite band or artist for whatever reason?

  Well now you can!

  Donate money directly to a deserving band or artist through Music Donations.

  Donations can be from as little as a $1 or as much as you want.

  You can also make one donation and have that split between many beneficiaries.

  Payments go directly to the artist – not the recording or marketing companies!

  You can also send a personal message to the artist with your donation, or you can remain anonymous.

  Don’t think that all recording artists have millions of dollars, most don’t and only just survive.

  Bands & artists only receive a small percentage (royalties) from the sale of their work. Your donation to them ensures that the band or artist can survive and continue to produce the music you love to hear.

  Each year Millions of Dollars are lost on the illegal pirating of music, it’s time to give something back! Do the right thing and send a donation to a band, artist or musician that deserves your contribution.

  Music Donations does not condone the downloading copying and piracy of any music, we simply want musicians and artists to receive the money donations you feel they deserve.

  You are still guilty of a crime whenever you copy, download or pirate music, but at least the artist receives money from your donation and you can feel better from making that donation to them.

  By making a donation you are not admitting to any music piracy

  Do the right thing and make a donation @

  http://www.musicdonations.org

• [Teresa Nielsen Hayden / Moderator]

  OMG, I actually agree with you on something.

  There’s hope!

• [Cory Doctorow]

  So what, Johen? Well, if you are a record executive hoping to save your industry from disaster (as opposed to someone hoping to make the world a place where no one gets anything for free), then setting yourself on a course that systematically alienates your best customers because they’re also prolific file-sharers is a suicidally bad idea.

  As a matter of fact, if it were the widespread case that there were pirates who made commercial editions of my books and sold them, but bought more copies of my books from me than they sold, I’d be cutting my own throat if I went after them to make them stop. The point of being an entrepreneur is to pick the strategy that makes you the most money, not the one that ensures that you have maximal control.

• [phasor3000]

  Teresa, thanks so much for contributing to the discussion.

• [Teresa Nielsen Hayden/Moderator]

  Bob, not all filesharing is theft. You should remember to make that distinction when you’re discussing the subject.

  Also, if you’re going to insist on referring to unlicensed filesharing as theft, you should also be referring to record company doings as barratry, price gouging, conspiracy in restraint of trade, and other appropriate terms for criminal acts.

• [Anonymous]

  Bob, I disapprove of your inflammatory use of the word “thieves” on this, Cory’s, blog.

  As for the RIAA, can somebody please explain to me why these yahoos and the record company CEOs that tell them what to do aren’t being prosecuted right now on charges of racketeering? I remember reading one or two opinions on this, but those seemed to contain a high level of po-TAH-to/po-TEI-to. I doubt that in a country that routinely locks up almost 2% of its population, courts are going to be that nitpicky.

• [phasor3000]

  Teresa:

  Also, if you’re going to insist on referring to unlicensed filesharing as theft, you should also be referring to record company doings as barratry, price gouging, conspiracy in restraint of trade, and other appropriate terms for criminal acts.

  OMG, I actually agree with you on something.

  But as always, two wrongs (record company greed and illegal filesharing) don’t make a right. The record companies probably claim that their extortionate pricing and obnoxious DRM is necessary due to sales lost to filesharing. I don’t see either side as having the moral high ground.

• [Cory Doctorow]

  Phone companies are beneficiaries of public largesse, regulatory monopolies, free rights of way and subsidy. They have a duty to repay the largesse we afford them.

  Further, they control the means of communication around the world.

  The situations aren’t parallel.

• [Nick D]

  “Please correct me if i’m wrong, but I believe of all the lawsuits they’ve brought against people, none of them have been for downloading music, but for OFFERING music for download.”

  I’m pretty sure that they sued downloaders as well. Otherwise this discussion might be considered moot. Can anyone clarify?

• [Teresa Nielsen Hayden/Moderator]

  When the tone never varies, the tone is the point.

• [Michael]

  Phasor3000, Cory gave you three answers — they were all “no”. My answer is also “no”. It is not inherently wrong, as you clearly believe, to download an MP3 track from a CD for which you don’t have a license. It just isn’t.

  As you grow older, you will learn that in many situations in life, there are no clearcut answers. This is one of those situations — it’s only one of a great number of situations where there is no inherent wrong.

  I also take as somewhat puerile the assertion that a philosophical question can be “simple”. That’s pretty stupid — if it’s a simple question, why are we debating it?

  As far as the larger situation is concerned — from the much maturer standpoint of what would be the maximum benefit of all concerned, it’s clear to me that Cory’s right: the RIAA is being stupid and short-sighted. And in a normal situation, nobody would care; if an industry association wants to commit suicide, fine, that’s their right.

  But in this particular situation, the RIAA and other entertainment associations pose a unique threat to society: they have a great deal of money, and they have absolutely no moral qualms whatsoever against perverting American and world democracy, or against barratry.

  My simple question to you would be this: “Is it wrong to buy legislation to protect a failing business model?” Sure, two wrongs don’t make a right — but in this case, in my view and in the view of many, there is only one wrong.

  Incidentally, since you’re so focused on the plight of the poor entertainment industry, who simply can’t make ends meet due to all this rampant wrongness in today’s society — what do you do for a living? Do you produce creative works of any nature, like Cory? Or do you just blow smoke out your ass on a regular basis?

  And I mean that in the nicest possible way, of course.

• [Bob]

  Cory:

  The heaviest downloaders may be the most prolific buyers (I’m trusting you on that one), but that relationship isn’t grounds to demonize the record companies for seeking to protect the “first-time” distribution of their products.

  It may be that it’s a better business practice to allow unrestricted filesharing, but to me, that defies logic. Maybe we’ll have to wait and see (and maybe that’s what the companies are doing right now with this free-MP3 experiment). To reiterate, I don’t agree with current DRM implementations, but I also don’t disagree with the RIAA’s desire to protect their products, somehow.

  Maybe you disagree here, but I think that taking a CD from a record store is theft, and although the intermediate mechanism may be different when you download an album illegally, I think the results/consequences of these two actions (a CD/Ipod with the music on it) are comparable. So your use of “copyright infringement” here seems like a euphemism more than anything else.

  In contrast, murder and “theft of life” have two different results: in one case (murder), there is no tangible possession held by the murderer, in the other case, there is (whatever’s stolen). Similarly, “traffic” is not left with emotional scars, potential STDs and pregnancy, and social stigma, if it’s “raped” by a jaywalker.

• [Bob]

  Nick D.:
  I agree with much of what you’ve said about poor strategies by the record companies, but your justification for your “high-severity-copyright-infringement” obfuscates the fact that your music was obtained illegally, regardless of whether it’s good for the record companies. And that’s what pisses me off. Illegal filesharers take the moral high ground to somehow justify their illegal activities. Let’s leave it up to the record companies to make their business decisions, let’s not commit crimes against them, even if it’s ostensibly to “help” them.

• [Cory Doctorow]

  Another way in which the situations aren’t parallel: when copyright holders opt *not* to prosecute their customers, they do the opposite of what the companies I complain about do. Boing Boing features complaints about companies that *abuse* their customers to maximize profits, not companies that forgive their customers’ transgressions in order to maximize profits. I’m pretty sure you know this.

• [Squashy]

  Will there ever be a day when filesharing is discussed without somebody erroneously arguing that copyright infringement is theft?

  “Copyright infringement” isn’t a euphemism for theft. Duplicating something is not, and never was, the same thing as taking it. You can certainly argue that it’s bad and wrong to copy things, but please let’s at least keep this fact straight.

  For once?

• [Teresa Nielsen Hayden/Moderator]

  OMG, I actually agree with you on something.

  There’s hope!

• [Cory Doctorow]

  No, the law calls downloading “infringement” and stealing a CD “stealing.” When you call downloading stealing — equating it with the theft of a rivalrous, physical object — you’re using a euphemism. This isn’t an ideological position, it’s a factual one. The section of the US Code that defines theft is not the section that defines infringement. One is criminal, one is civil. There is an enormous difference in law. To say otherwise is just factually incorrect, no matter how much you might want it to be otherwise.

  If “theft” isn’t “murder” because there’s a different outcome, then “infringement” isn’t “theft” because one results in the loss of physical goods that cost something to manufacture, while the other is a civil offense that represents, at worst, a potential lost sale, but this is by no means a foregone conclusion.

  There’s a reason the law distinguishes between these two activities. Conflating them is a rhetorical trick akin to the one that was pulled off in the seventies when the traditional, centuries-old term “author’s monopolies” was replaced by the neologism “intellectual property.”

  It’s easier to ask a government for help in policing your property than it is to ask for more regulatory monopoly.

  Likewise, it’s easier to get people to moralize and condemn “theft” — a criminal act that deprives someone of lawful property — than it is to energize them about “infringement” — a civil violation of the contours of a industrial regulation.

• [johen]

  I think you’re dodging my point again, so I’ll phrase it as a simple question, then I’ll stop making Teresa sleepy, and never argue this point again much to the joy of everyone involved:

  Is it wrong to download for free something that you should be paying for?

  As an aside, it’s funny how the phone companies are the bad guy but when I load BB, I get ads for Verizon wireless.

• [Cory Doctorow]

  No, the law calls downloading “infringement” and stealing a CD “stealing.” When you call downloading stealing — equating it with the theft of a rivalrous, physical object — you’re using a euphemism. This isn’t an ideological position, it’s a factual one. The section of the US Code that defines theft is not the section that defines infringement. One is criminal, one is civil. There is an enormous difference in law. To say otherwise is just factually incorrect, no matter how much you might want it to be otherwise.

  If “theft” isn’t “murder” because there’s a different outcome, then “infringement” isn’t “theft” because one results in the loss of physical goods that cost something to manufacture, while the other is a civil offense that represents, at worst, a potential lost sale, but this is by no means a foregone conclusion.

  There’s a reason the law distinguishes between these two activities. Conflating them is a rhetorical trick akin to the one that was pulled off in the seventies when the traditional, centuries-old term “author’s monopolies” was replaced by the neologism “intellectual property.”

  It’s easier to ask a government for help in policing your property than it is to ask for more regulatory monopoly.

  Likewise, it’s easier to get people to moralize and condemn “theft” — a criminal act that deprives someone of lawful property — than it is to energize them about “infringement” — a civil violation of the contours of a industrial regulation.

• [Cory Doctorow]

  Yes, I’ve stopped beating my wife.

  What do you think the word “should” means in the sentence “Is it wrong to download for free something that you should be paying for?”

• [phasor3000]

  Michael, you’re making a lot of incorrect assumptions. I’m probably older than Cory, I do make creative content (just for fun), and I give it all away for free, but hold full copyright in it. And I have a very low opinion of the record industry (see #44), but that doesn’t make illegal copying of their content ok.

  My simple question to you would be this: “Is it wrong to buy legislation to protect a failing business model?”

  Yes, of course it is wrong. It is also wrong to violate the legal rights of a record company (and copyright protection existed long before the RIAA and their lobbyists — it’s not something they “bought to protect a failing business model”) because you don’t like them, or think that they are engaging in unfair business practices, especially for something that’s purely entertainment, like music, novels, and movies. I think cable TV prices are far too high, but I don’t buy a descrambler and then claim “but I wouldn’t have paid for those channels anyway.” Once you do that, you’ve dropped to their level and are playing games of “but what they’re doing is worse than what we’re doing,” “they forced us into this,” etc. And you end up with the downward spiral that we now have, with the RIAA and the illegal downloaders in a race for the bottom, pointing fingers at each other on the way down.

• [Cory Doctorow]

  Spoon@53: No motivation I can think of. I don’t buy CDs, I buy DRM-free MP3 downloads.

  Phasor@52: Which person? Which CD? Do I get incensed over kids who download their favorite TV songs? No. Or people hwo download music they own on vinyl (technically illegal)? No. The jazz fan downloading bootleg rarities of a band whose every CD she owns, who has attended fifty concerts by that artist, etc? No.

  Sure, the person who sits there and downloads thousands of tracks she doesn’t own and won’t ever buy is probably depriving the artist of revenue. If I was the artist, I’d focus on providing material that the person wants to buy — concert tickets, merchandise, downloads — and I’d focus on figuring out how to extract revenue from my wealthiest fans.

  For decades, marketers have understood that buying patterns are related to life-stages. Students don’t buy much, but copy a lot, because they are time-rich and cash-poor. Graduates buy a lot and download less, because the inverse is true. Young people are disproportionate radio consumers because they are poor and because they are at a stage in their life where they seek out novelty. Professional people buy familiar music and listen to it repeatedly, acquiring new favorite artists slowly.

  When I worked at a new-used bookstore, I saw book-buyers transition from poor students who only bought used books (and then traded them in for credit) to professionals who bought hardcovers the day they came out, to pensioners who bought used books again. When I was in elementary school, we used to buy one copy of Asimov’s and get one of our parents to xerox it at work so we could share it around. When we got to high school, we all got subscriptions. Today, as Asimov’s subscriptions sag, They’re paying money to figure out how to get 12 year olds to read the magazine again for free so that they could raise a new crop of subscribers to replace their aging cohort — as it was, our parents’ employers were bearing the cost of giving the mag away.

  The incremental cost of selling a CD is very low, the incremental cost of selling a download is practically zero. This creates the potential for a smart price discrimination where you focus on selling at high prices to richer customers, while hooking poor customers at the lowest possible cost (giving music away can be expensive — see all the payola and machinations that go into getting music onto the radio) so that they can transition to being your rich customers in a few years (instead of just growing up into non-readers, or people who don’t listen to much music, or people who don’t watch TV, etc).

• [tlang]

  “I’m pretty sure that they sued downloaders as well. Otherwise this discussion might be considered moot. Can anyone clarify?”

  In the current case it seems not to be the case. Over on Ars Technica they’re discussing whether simply “making available” constitutes infringement. If so, does that means all libraries that offer CDs are infringing as well? How does fair use come into play here? Is it wrong to offer a song for someone to listen to, review, and then delete? Is that still infringement?

• [phasor3000]

  Cory:

  The point of being an entrepreneur is to pick the strategy that makes you the most money, not the one that ensures that you have maximal control.

  What if the strategy that maximizes your profits also has the side effect (intentional or not) of encouraging casual disregard for US copyright law? Do you see this as a plus, a minus, or do you simply not care?

  Whether you choose to answer the question or not, I applaud your honesty about your motivations.

• [sirdook]

  Bob,

  Let me just add to Cory’s comments about the law an important conceptual observation about terms like ‘theft’ and ‘murder.’ It’s just not plausible to think that we define these in terms of the comparability of outcomes.
  If you give me a CD as a gift, the outcome is that the object has been transferred from your control to mine. If, instead, I steal the CD from you, the outcome is that the object has been transferred from your control to mine. Those sure look like comparable outcomes. Does that mean that receiving gifts is just a kind of theft? Or perhaps it means that stealing is just another way of receiving gifts.
  Also, theft sometimes fails to produce its characteristic outcome. If a thief is caught, the object may be returned to its original owner. The ultimate outcome, then, is that the original owner has the object.

• [abb3w]

  Nick D. gets my point, Dave X. Multiple price points with artificially established distinctions allows for sales to differing price levels along the demand curve, increasing net profits. However, you’re right to some extent. The labels need to realize that they need to not merely direct demand in the direction of THEIR product, but work to increase overall demand for music. Which means better music, more widely available.

  And, yes, Artists will be able to work without labels. Business and Biology call it competition; it leads to evolution. That means the labels will have to get back in the business of identifying quality to promote as they used to in the 50′s and 60′s, rather than presuming whatever they promote must ipso facto be quality. If that happens, music fans may begin to associate real prestige to an artist good enough to be put out under the Rhino Records (TM) label brand, similar to how Tor Books is recognized in the SF Book publishing arena. This may make fans more likely to consider the product, and more willing to pay a little more, since the Brand will be associated with a known level of Quality.

  Right now, the only reason I’m thinking of listening to Radiohead is I like their political direction… but that won’t last long. Once everyone is just taking whatever is willingly given, it leads to a cut-throat competitive pricing in the marketplace that won’t let many of the real talents out there make an honest living. And that would be as bad for the culture as the RIAA parasites.

  There needs to be a real middle ground. Producers will probably no longer make a shitload of money, and have to work a lot harder, but they’ll still have a role. Probably fewer artists will have chances to be Megastars, but more of them will have a chance to make at least a 9-5 middle class income off their talent. And music may diversify… and stop sucking so much.

  And then again, pigs may fly out of my ass… but that doesn’t mean I plan to invest in pork futures on that basis.

• [DerekZ]

  Has the RIAA really spent upwards of 30 million on lawsuits? I’m assuming that about half of those sued just end up paying the 3K.

  Something tells me the laywer was mistaken or lying when saying the lawsuits were a money-loser. I think they’re making money from them, not just breaking even.

  If they would back off the grannies and people who don’t own computers, they’d make even more and lose a lot of the bad press too, but they seem incapable of recognizing bad PR.

• [Wingo]

  What’s disappointing about this debate recently, is that it seems to me that the RIAA’s tactics seem to be working on one level. I’ve noticed a slow increase since the whole Napster debacle in the number of people that will vehemently insist that copyright infringement IS stealing, and this is a relatively new thing. We see it here in this discussion. Even when someone like Corey so eloquently points out the logical and factual fallacies involved with that kind of comparison. So the RIAA seems to be (however slowly) solidifying this notion to a certain level in the general conscious.

  I like the earlier point made by Yamara about ACTUAL pirates of yore, and how sort of ridiculous the comparison is. Even when I was a kid, when you spoke of ‘pirates’, it conjured a notion of a seedy underbelly – these were unseemly characters who made shoddy copies of VHS tapes and sold them in back alleys in order to PROFIT. They were actually, in a sense, stealing a little part of the market share on the movies. But these people were of the criminal element, and most likely you associated them with the mob or racqueteers or the like. But me making a dub of an Oingo Boingo cassette for my school friend was only recruiting a new fan to eventually accompany me to the next concert, and then we’d both buy t-shirts that we would wear to school the next day. It really was about sharing, and developing a future-paying fanbase. There was a clear distinction in the concepts. Now the RIAA will have you believe that if you use torrents, you are as evil a criminal as a pillaging Pirate of the Spanish Main or the mafia scumbag selling crappy VHS tapes out of the trunk of a car.

  I’ve noticed these days that younger folks will commonly refer to filesharing as ‘theft’. They still don’t care, and shrug it off, but do tend to believe more and more that it is actually stealing. When the whole Napster thing was happening, I made a t-shirt that said ‘I use Napster’ on the front. On the back it said ‘Thief’. It was a silly, snarky joke at the time. When I wore it, people were amused in the ‘I see what you did there’ sort of way. Because it was funny. OF COURSE using Napster didn’t really make you a ‘thief’. Nowadays, it seems there’s a growing element of the population that would not find it amusing at all. They would be more inclined to scoff and not get the joke. ‘OF COURSE you are a thief, and you’re admitting it?’ The RIAA may be losing money, but it seems that, sadly, they may be gaining ground in the propaganda war on the general culture with the whole ‘theft’ concept.

• [Wingo]

  phasor3000:downloading an illegal 128 kbps mp3 copy of Sonic Youth Daydream Nation, which they do not and have at no time owned in any format

  This brings up an interesting point. I actually did purchase a copy of Daydream Nation back in the ’80s on cassette. I used to drive around listening to it in my beat-up Toyota when I was in high school, and your comment made me want to hear it again. Seriously.

  So my question to the ‘downloading is theft’ crowd is this: Is it OK (i.e. ethical/ morally justifiable) for me in this case to download that 128 kbps copy? I paid for it at one time, presumably about the same price for the cassette that one would pay now for the iTunes version. Even if I may/may not still have that cassette tucked away in storage somewhere and it may/may not still be listenable? Especially since listening to a new cassette at the time would probably be comparable to the quality of a 128 kpbs download of possibly questionable origin? Or am I supposed to purchase the same album again, essentially getting penalized for the progression of technology over the last 15 years? (I no longer have a tape player and only listen to CDs or my iPod in my car.)

  I really don’t know what the answer to this question is – it sort of takes an abstract turn in my head. It’s a slippery slope at the very least. But it seems to me if you start breaking the discussion down to the level of paying the artist for their ‘intellectual property’, then I have already done that once, and the format in which I enjoy it in the present day should be irrelevant. Correct, or no? If you look at it in those terms, I have already purchased the ‘license’ for that album, and should be able to make use of it even this much later without having to re-pay the copyright holder. Right? Or is this the whole reason why the business model is failing, because this concept of ‘license’ and easily distributable content didn’t come into play in the day of cassettes? I’m seriously wondering how this type of question is addressed by the industry…

• [abb3w]

  Spoon: The only people I’ve ever heard talk about not buying albums because of the RIAA are techies who don’t actually own any CDs and never have.

  Hi. I’m a techie, although I still use my old Archos Jukebox 20 rather than buy an iPod, and my shelf of CDs has only on the order of 100 on it. It’s not so much the DRM I attribute to my limited purchases as the lousy business model the RIAA pushes. The business model of “We can make money selling it this way, whatever it is” has led not only to DRM, but the widespread degree that much of the modern pop scene is an insipidly uninspired homogenized mixture of mayonnaise and crap. The last album I bought on CD was the complete works of Tom Lehrer, who hasn’t produced anything new since about 1974.

  The further problem with DRM isn’t so much that it’s evil, as that it’s inconvenient to work with, since it’s trying to achieve an impossible design goal. It’s the inconvenience that keeps me from buying music that way. The political statement (such as contemplating buying a copy of Radiohead’s new release) is mostly incidental.

  The Invisible Hand of the marketplace is ruthless (perhaps oft stupid) in its pursuit of improved efficiency, and will readily Smite novice and venerable idiots alike. The RIAA has lost sight of some underlying preconditions they depend on to exist. If they want people to buy music, they first must have people who value music. And if they don’t contribute to that, but actively obstruct people from doing so, they become a niche parasite in a decaying ecology… which is now starting to adapt to remove their niche. “Say hello to the Multituberculates when ya meet ‘em.”

  I’ll also note that I spend a lot more of my money on books than music. And, gee, I’ve had five friends go out and buy copies of Rainbow’s End since I was able to point it out to them on-line. One even tracked down a hardcover copy. Perhaps the music publishing industry could learn something from the book business.

• [phasor3000]

  What do you think the word “should” means in the sentence “Is it wrong to download for free something that you should be paying for?”

  Do you think it is wrong to download an mp3 which someone ripped from a copyrighted CD, where the person downloading the mp3 does not own a legal copy of that CD?

• [Bob]

  You make a good point that there are no lost manufacturing costs when somebody downloads and burns their own CDs — I hadn’t considered that. But to argue that infringement in the case of filesharing is not the same as theft because the law says so seems naive, especially since such laws may not reflect the current digital age. While it’s true that the data are just “copied”, I think that filesharing is a unique circumstance in that it can perfectly replace a formerly purchased product, with very little expense on the part of the infringer (vs. photocopying (or scanning and printing) a novel, for example). So I still think that filesharing, as a specific form of copyright infringement, is, at the very least, more severe than our historic understanding of the civil crime (and I argue undeserving of such a euphemistic label).

• [Dave X]

  Somehow, I doubt this will change anything but the amount they seek in their next lawsuit…

• [Bob]

  Sirdook:

  I’m sure my “outcome” argument has flaws if it’s used as the only basis to establish whether actions are ideologically identical (i.e. under the law). I don’t have an appropriate set of conditions which would fully define such “identicalness” — but I think it’s fair to say that in most cases, (rough) outcome similarity is a necessary (though not necessarily sufficient) criterion. Clearly though, with different outcomes, murder is not theft, and jaywalking is not rape.

• [Bob]

  Sirdook:

  ps: the theft still occurred at one point (a temporary “outcome” was a lost CD), even if the CDs were returned eventually.

• [Spoon]

  @cory

  What’s the motivation for someone who has a perfect copy of a CD, and the music loaded onto their iPod, to go out and buy a CD? aside from the trip to the mall where we are all treated like scum?

  Back when I had to deal with low quality tape dubs, and struggled to get a friend who owned the CD to remember to bring it into school, or to tape it for me, it was understandable that I and a lot of other kids went out and bought the crystal clear CD quality sound that wouldn’t wear out after 20 plays, but now? are you serious?

  So what’s the motivation to buy a CD? and don’t give me that load of ‘the art that comes with it!’ because I don’t know anyone who seriously fawns over the cd case, or book binding for that matter, its not the cover that makes us love the music/book, didn’t you ever learn that you can’t judge a book/music by its cover?

• [tlang]

  Please correct me if i’m wrong, but I believe of all the lawsuits they’ve brought against people, none of them have been for downloading music, but for OFFERING music for download. I’m guessing because it’s WAY harder to prove the other. So the whole “copying is stealing” doesn’t have anything to do with this case.

• [aixwiz]

  Duh!

  This is a perfect example of shooting yourself in both feet: you sue your customers thereby alienating the people who you want to buy your product and you waste millions of dollars collecting thousands.

  Looks like the record companies are going to destroy themselves through their hubris rather than humble themselves and ask how they can change their business model to fit todays market.

• [Forlain]

  Music labels and the bands should start seeing downloaded music as cheap marketing, at least partially. With low to no costs, it finds a much wider audience and IIRC concert and merchandising revenues are rising lately.
  And by adding value to their downloads (e.g. DRM-free mp3s, suggesting music based on your taste, informing you of events like concerts etc.) they can even earn money with it.
  Radiohead’s experiment will prove me wrong or right, but I believe by making listening to their album affordable for virtually everyone, they will sell a lot more diskboxes, concert tickets, t-shirts, posters, etc.

• [NarmGreyrunner]

  Along the lines of Wingo: to use the “raping traffic” analogy that was brought up earlier, jaywalking is a pedestrian entering traffic illegally so the argument being that jaywalking is “rape of traffic” makes some sense logically.

  We all know someone jaywalking is a lot different than raping another person.

  But you market that jaywalking as a serious crime, get it referred to all over the media as “rape of traffic,” get celebrity spokespeople to talk about the seriousness of “raping traffic” and throw together a few ABC after-school specials, and pretty soon people will be demanding that ticketed jaywalkers have to register on an offenders list when they move into a new neighborhood.

  So the RIAA’s turnig Copyright Infringement into it’s own form of that, and I find it pretty frightening that they are abusing the legal system to get their way.

• [Doug Nelson]

  How much has this cost taxpayers? Surely there are unrecovered court costs, filing fees, etc.

  If any other industry had this many theft lawsuits over this many years, they would be declared as not taking sufficient safeguards and banned from anymore lawsuits until they corrected things. Otherwise they’d be abusing the legal system, using it to police their own lookout.

  Imagine if the clothing industry sued thousands of “thieves”, year after year after decade. Eventually someone would say “hey, clothing industry, your supply chain is defective, yet you continue to use it in spite of the fact that you know next year you will sue thousands for stealing. Change your supply chain, or stop suing.”

• [Nick D]

  “I don’t know anyone who seriously fawns over the cd case, or book binding for that matter, its not the cover that makes us love the music/book, didn’t you ever learn that you can’t judge a book/music by its cover?”

  That’s because you don’t know me. I actually won’t buy a CD unless I like the cover art. Many times you can tell a book by the cover, especially if you’re a really savvy person who digs good design.

  @#29: “obfuscates the fact that your music was obtained illegally”

  When did I say I obtained the music illegally? I was mostly referring to making copies of CDs I’ve purchased. Please don’t put words in my mouth.

  But hey, I do also copy others’ CDs on occasion, and you can condemn me for that if you want to on some kind of abstract ethical plane, but the fact remains that I wouldn’t have bought that CD anyway, so there’s no financial loss to anyone.

• [Spoon]

  Am I the only person who remembers napster suddenly sucking when the first round of lawsuits went out and the number of people sharing their music (and not buying music anymore) went from 95% to 10%? Or am I way off base on that?

  The only people I’ve ever heard talk about not buying albums because of the RIAA are techies who don’t actually own any CDs and never have. And all the non techies who don’t follow the lawsuit/DRM news don’t download music because it’s illegal and they think they would get cough or infected with a virus if they tried.

  is the music and movie industry really loosing customers over the lawsuits, or are they loosing customers because the 12-23 year olds who are strapped for cash have ipods and computers and can pirate music/movies off of the three or four major ‘warez’ groups and don’t have to trade the music/movies like we used to do in school? There is obviously a big difference between one out of eight kids having the new greenday/metallica CD and letting other kids borrow and type it and no one actually owning the cd.

  All I have is anecdotal evidence from the few kids I know, but none of them own a CD or trade music, they trade video games and know about bit torrent.

• [non-BB-gadget-account]

  secretly, i hope those who came up with the idea in the first place will be forced to shoot their faces off in shame by those who knew better.

  but in real life, i have to agree with #1 Dave X.

• [Yamara]

  “Jaywalking” as “raping traffic” deserves to become a net meme, perhaps applied to Wikipedia spawn sites.

  As for murder not being theft, it is a figure of speech that murder is “taking a man’s life”– I imagine the phrase is of considerable antiquity, but it is only a metaphor, not a legal construct.

  Compare the phrase “music piracy” which is a much more recent conflation, actually designed to confuse contemporary customers. True piracy was murder and theft on the high seas. It’s in the Constitution as something Congress has authority over.

  Pirates of the Spanish Main were not known for quietly pulling up alongside galleons, copying the gold and jewels therein, and then sailing off without murdering, raping, or stealing anything from anyone.

  The economy of the seventeenth and eighteenth centuries would be very different if the pirates had been able to do that. Spain might have had to rethink it’s business model. Which was destroying their own economy while murdering and raping Aztecs and Incans.

  But, y’know, it’s just a metaphor.