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RIAA Spent $64 Million On Threats Netting Just $1.4 Million
And despite this money pit, RIAA execs keep getting raises
by Karl Bode Wednesday 14-Jul-2010 tags: legal · Fileswapping · business · alternatives
P2PNet has managed to grab hold of the RIAA's tax documents for the last few years, and they make for some very entertaining reading. According to the RIAA’s disclosure form for just 2008, the outfit paid its lawyers more than $16,000,000 to recover $391,000 from P2P music traders. Between 2006 and 2008, the RIAA paid (mostly to lawyers) about $64 million to hunt down and threaten file sharers -- a process which only netted around $1.4 million (which didn't go to artists, of course).

All the while, the RIAA's six figure (or more) executives were busily giving themselves significant raises. For example, RIAA boss Mitch Bainwol pulled in more than $2 million in compensation in 2008, a cool half a million more than the RIAA's "let's vilify potential customer" campaign netted that entire year. RIAA president Cary Sherman pulled down a cool $984,615 in 2007, rising to $1,331,747 in 2008.

Granted, this isn't factoring the massive negative energy public relations pulsar the RIAA creates by engaging in actions that make the entire planet loathe the major recording labels (like suing grandmas, or convincing ISPs to threaten service termination for downloading a song). Imagine though, for a moment, what kind of innovative content broadband distribution piracy alternatives these funds could have helped create?

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fatness
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failed business models do this

quote:
RIAA Spent $64 Million On Threats Netting Just $1.4 Million

FutureMon
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Re: failed business models do this

Sounds like when people spend thousands of dollars on super lotto tickets, to spread the numbers across the widest variety of combinations, increasing their odds and hoping for a match on the big one, but instead only getting a few thousand $ on the smaller hits.

- FM

Linklist
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Longport, NJ
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Re: failed business models do this

The purpose of the lawsuits isn't to recover more money than they are spending. The purpose is to scare off the millions of users who will no longer pirate music in order to NOT be sued. I think the term is "An ounce of prevention is worth a pound of cure".

Does that work? I don't know. But I think the RIAA may know based on sales figures and thru surveys & polls.
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jack b
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Re: failed business models do this

"A pound of prevention is worth an ounce of cure".

Fixed to reflect the actual results.

FutureMon
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1 edit
With a $64mm budget, you'd think they'd be able to come up with better ways to deal with piracy than through lawsuits.

Like, maybe, incentivise (sp?) the music industry to sign better talent...

- FM

DarkLogix
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Re: failed business models do this

said by FutureMon:

Like, maybe, incentivise (sp?) the music industry to sign better talent...
what'd you say no way they can't do that they have to keep hiring legal talent not music talent why would they want music talent? they aren't a music company oh wait they are
averagedude

join:2002-01-30
San Diego, CA
said by Linklist:

The purpose of the lawsuits isn't to recover more money than they are spending. The purpose is to scare off the millions of users who will no longer pirate music in order to NOT be sued. I think the term is "An ounce of prevention is worth a pound of cure".

Does that work? I don't know. But I think the RIAA may know based on sales figures and thru surveys & polls.
If they actually went after counterfeiting pirates, then there might be an angle to be spun for prevention loss. But that is not who they are going after.

FutureMon
Ach Du Lieber
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1 edit

Re: failed business models do this

Who's idea was it to make CD Burners available to the general public? Now there's a root cause if I ever saw one.

And yes...I know...to put it in perspective, CD's don't kill people - People kill people.

- FM

Bor

@telus.net

Re: failed business models do this

said by FutureMon:

Who's idea was it to make CD Burners available to the general public? Now there's a root cause if I ever saw one.
Funny you should ask. As far as I understand it, lobbying and the threat of lawsuits helped prevent the widespread adoption of digital audio tape. Also the RIAA sued to prohibit mp3 players and lost.

The RIAA didn't like the introduction of CD burners either, though I've heard they get, or used to get a $2 surcharge on each one sold. Of course CDs can used to store anything, not just audio, so banning them would've been a tough sell.
wispalord

join:2007-09-20
Farmington, MO

Re: failed business models do this

they got got kickbacks on black audio cassets i know, but never cd's cause thats a DIGITAL MEDIA that can be used for famly photos ect, for the most part audio cassests known use was to record from the radio, so they got a kick back they lost all that with the advent of the internet and CDRW, so there SOL , maybee they need to embrase the tech not fight it it will NEVER stop.
FLATLINE

join:2007-02-27
Buffalo, NY
In my opinion The recording Industry is losing revenue from increased competition. I dont think piracy is really that much worse than it has been in the past. The problem is entertainment dollars are just being spent on other things like gaming which has exploded in the last 10 years. Everyones a gamer in some shape or form these days.

Your probably right about the reason for the lawsuits but anyway they slice it spending $64 Million to get $1.4 is just a bad investment. Plus all that money goes to lawyers?? Sickening, $64 million could have done alot of good for people who need it. Roll this all up together along with Executives salaries and the excess of execs collecting from artists hard work and what we have is another industry ive chosen to ignore. Thanks but no thanks.
dagg

join:2001-03-25
Galt, CA
and if thats the case, they also failed miserably in that as well. has the level of filesharing dropped of even the least bit? no, it really has not.

so either, they tossed money down a hole for nothing and got what amounts to a 2% ROI for this plan.
or they claim it was an exercise in getting people to stop file sharing in which case it failed miserably and backfired on them...

or worse yet, both.
amigo_boy

join:2005-07-22

Re: failed business models do this

said by dagg:

has the level of filesharing dropped of even the least bit? no, it really has not.
Do you have a reference that infringing filesharing hasn't dropped?

Even if it hasn't dropped, we don't know how much it would have grown if left without infringers being made public examples of.
Alky

join:2001-08-12
Cleveland, OH
Should read, an ounce of prevention is worth a pound of obscure

KrK
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said by Linklist:

I don't know. But I think the RIAA may know based on sales figures and thru surveys & polls.
According to their own PR, piracy is more rampant then ever and getting worse. So that's like admitting this is a failure.... OR it could be their other releases are false and they know it, (losses from piracy massively overstated deliberately) but want to use it to keep up the lobbyist front/political pressure.
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cork1958
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said by Linklist:

The purpose of the lawsuits isn't to recover more money than they are spending. The purpose is to scare off the millions of users who will no longer pirate music in order to NOT be sued. I think the term is "An ounce of prevention is worth a pound of cure".

Does that work? I don't know. But I think the RIAA may know based on sales figures and thru surveys & polls.
Does this work?

Obviously NOT!!
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said by Linklist:

The purpose of the lawsuits isn't to recover more money than they are spending. The purpose is to scare off the millions of users who will no longer pirate music in order to NOT be sued. I think the term is "An ounce of prevention is worth a pound of cure".

Does that work? I don't know...
Piracy is at an all time high. Every file sharing site they bring down is replaced by more sites. Any copyrighted work is available online (many times before the official release date). My answer to the question "does that work?" would be "not even a little bit".

But I do have an idea that would save them about $64,000,000...

DarkLogix
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wow

quote:
form for just 2008, the outfit paid its lawyers more than $16,000,000 to recover $391,000 from P2P music traders
LOL

they need to sue the lawyers lol

atleast the RIAA is losing even more money to lawyers than to p2p pirates yay

Alcohol
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They just need to win for future lawsuits. This is merely an investment from their perspective.

If they win now, they can sue more later.

But i agree, they shouldn't even exist. They're worthless.
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Kearnstd
Elf Wizard
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bad investing here. and we know most of that 64mil went into the pocket of some illegitiment firm like "US Copyright Group" that uses shady methods including abusing the court system.
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CipCip

@Princeton.EDU
Not really. It's a write-off. Losses. Depreciation...

RIAA is actually a trust and not a corporation nor follows under its liabilities.

GNH
tolle causam
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Kill All The Lawyers?

Have you read that book "Kill All The Lawyers"? Wonder what Shakespeare would say about this absolutely hilarious exercise in futility. The RIAA needs to get a better trapper or call it quits.
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fatness
subtle
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Re: Kill All The Lawyers?

I haven't read it, no. Care to summarize it? Thanks.

GNH
tolle causam
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Arlington, TX

Re: Kill All The Lawyers?

In a nutshell, they're not so bad, really. That's the best summary brief I can give. Mileage may vary... :-)
EdmundGerber

join:2010-01-04
kudos:1
said by GNH:

Have you read that book "Kill All The Lawyers"? Wonder what Shakespeare would say about this absolutely hilarious exercise in futility. The RIAA needs to get a better trapper or call it quits.
I'm def going to read this - thanks!

Now there's a dream come true...

KrK
Heavy Artillery For The Little Guy
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Better to spend $10 to save .01 c ...

Or so it seems to the RIAA.

DarkLogix
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Re: Better to spend $10 to save .01 c ...

I'd like to met these clowns at the riaa to see how they tought it was a good idea

if I was the judge at one of these trials I'd rule that the RIAA is only losing money to p2p pirats by sueing them
amigo_boy

join:2005-07-22
There is also a deterrent value. A few high-profile cases, although financial losers, may yield greater sales revenue to the recording industry.

I'm not a fan of the low hurdles required of the plaintiffs to sue. Nor a fan of the way copyright (a social invention intended to balance commercial and individual interests) has tilted toward publishers over the past 30 years.

But, I don't think we get a balanced synopsis at DSLR. One day we hear about the abusive damage award against "Jamie Thomas Hyphen Rasset." Another day we hear about how RIAA is losing money prosecuting these cases. Never any connection that the news value of the former offsets the latter.

I'm sure it's well-received by those who've already made up their minds. But, that's not the same as being informative.

hayabusa3303
Over 200 mph
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Great business model.

Keep up the good work you will be broke soon.
SunnyD

join:2009-03-20
Madison, AL

1 edit

lol?

Don't know why, but this got me singing to myself:

"SCO, SCO, SCO your boat, gently down the stream..."

Dagda1175

join:2001-06-17
Goleta, CA

Simple cheaper solution

Make it a criminal matter under federal wire fraud laws. Only file civil suits after convictions.
axus

join:2001-06-18
Washington, DC

Re: Simple cheaper solution

Cheaper for RIAA, not cheaper for the US Government, which means it's more expensive for me.

FreedomBuild
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Government Bailout

I suppose the bucking for a Government bailout too. Why not every other thing that is really anti-consumer and fairness has gotten their bailout
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Rexter
YeeHaw

join:2002-11-17
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Unmeasurable

The damage that the IRAA has done to the music industry is unmeasurable. Dollar-wise probably 1000x the money they have spent damaging their reputations. I know at least 100 people who stopped buying music all together. They pirate, and pirate only. They just do it out of spite now.
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DarkLogix
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Re: Unmeasurable

yep I know a few like that

some of them even if its a great song they've gotta spite the RIAA no matter what
munky99999
Munky

join:2004-04-10
canada
i never knew who metallica was until they made a brohaha about napster... I liked their music and would have definitely heard of them at some point after napster and had bought some of their stuff. Except out of spite I pirated all their stuff and wont ever buy a damn thing about them and will shit talk them from now on.

cline3621
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Clarksville, TN

Re: Unmeasurable

The interesting thing about Metallica is that they brought suit against Napster and Shawn Fanning, and about yet still encourage people to bring tape recorders to their concerts.

The article that shows this is on the right side of the page.

»webcache.googleusercontent.com/s···irefox-a
chronoss2009
Premium
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1 edit

hey lets all give them a big

....................../´¯/)
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.................../..../
............./´¯/'...'/´¯¯`·¸
........../'/.../..../......./¨¯\
........('(...´...´.... ¯~/'...')
.........\.................'...../
..........''...\.......... _.·´
............\..............(
..............\.............\...

65 000 lawsuits and they only got that much WOW what a money pit that is

netwire
Premium
join:2001-04-27
Shelby, NC
kudos:1

Mr. Obama we need you!

I say we let Mr. Obama cap the salaries of the RIAA and MPAA.
Hellrazor

join:2002-02-02
Abyss, PA

Duh!

And I thought our Gov was the only entity dumb enough to do something like that...

FastiBook

join:2003-01-08
Newtown, PA

All i gotta say is....


--
LETS GO METS!
munky99999
Munky

join:2004-04-10
canada

What they misunderstand

A pirate is never a customer of the actual artist. At best a pirate could have potentially considered buying but never would have. The equivalent is the people who want a rolex watch but decide to buy rodex knock off.

What piracy does do. Pirates get the product and tell their friends about the product. Some of those friends likely going to go with rodex; some will go buy the rolex. Piracy generates sales.

Moreover, the pirate doesnt buy that metallica cd; but can go see the metallica concert; who most likely would never have gone to that concert. Thusly piracy generates non-pirateable revenues.

In the end.. piracy brings larger profits to those being pirated.
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See 27 replies to this post

AngelLute

@poloclub.net

Not getting MY business

I listen to *alot* of music, but I just bought my first new CD in over a year and it was probably several years before the previous one. I *refuse* to support these slimbag entertainment execs (video/TV just as bad). I buy used CD's or I download from independent artist sites. THAT's the legacy of the RIAA.

Van
Premium
join:2009-07-08
New Orleans, LA

It is head scratching in just about every way

possible as to why they continue these lawsuits

Nobody will stop downloading b/c of them
Nobody looks good whatsoever PR wise
The RIAA is spending millions

I mean, what in god's name are they thinking?
zod5000

join:2003-10-21
Victoria, BC
Reviews:
·Shaw

Umm they have 62.6 million to throw away?

I don't get it, they're still raking in enough dough they can crap away 62.6 million dollars?

and thats when the music industry is apparently at its lowest?

they must really be milking the artists if they can afford this in todays music climate. how much were the pillaging at its height in the 90s?

I'm still not sure why musicians need the riaa?
Desdinova
Premium
join:2003-01-26
Gaithersburg, MD

Re: Umm they have 62.6 million to throw away?

"I'm still not sure why musicians need the riaa?"

The musician's don't. Their greedy middleman non-creative keepers do.
ashman454

join:2004-03-10
Manassas, VA

Sounds like

Sounds like the Artists, music labels and content owners should be suing the RIAA for fraud, misrepresentation, extortion, racketeering, as well as liabilities for the bad name it's given the entire music industry instead of the RIAA going after those consumers. RIAA claims massive loss by pirates but I think whatever that loss REALLY is, is nothing compared to the loss caused by RIAA in bad blood and BS for the music industry.

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