November 27, 2020

More RIAA Suits — Are They Working?

The RIAA has filed yet another round of lawsuits against individuals they accuse of illegally redistributing music on the Net. There is some evidence that the suits filed so far may be working – that they may be successfully deterring some people from redistributing music online. And if the suits are working, that’s good news.

The music business is in a real mess right now. Many consumers fail to comply with even the traditional core of copyright law. The evidence is now fairly convincing that this non-compliance is reducing revenue to the industry, and eventually to artists. The problem seems to be getting worse, as people get accustomed to non-compliance and as the spread of digital technology creates more opportunities to get music without paying.

There are basically three things that can happen next.

Voluntary Compliance:: Something happens to change public behavior, so that a large majority of people choose to pay for music, even though they have the technical capability to get it illegally for free.

Alternative Compensation: We give up on the current system and switch to something very different, such as a compulsory license scheme that supports artists via a tax on bandwidth or storage.

Permanent Non-compliance: Unable to achieve Voluntary Compliance, and unwilling to risk Alternative Compensation, we accept low compliance rates as a long-term fact. The music industry shrinks and less music is created.

(Note that I did not include an Infringement Becomes Impossible future, in which people want to infringe but are technologically prevented from doing so. That future just isn’t plausible.)

Voluntary Compliance is the best of these, if we can figure out how to achieve it at reasonable cost. Alternative Compensation is risky, since it (at least partially) decouples music creation from the market, and we can’t foresee its consequences clearly given our current state of knowledge. And Permanent Non-compliance is bad for everybody; it’s probably bad even for the infringers, who would have less music to not pay for.

If the RIAA’s lawsuits against individuals do deter infringement, that brings us marginally closer to Voluntary Compliance. And, to me at least, the very real costs and bad feelings that the suits have imposed so far seem a worthwhile price to pay, if they actually make Voluntary Compliance more likely.

Of course, the suits may ultimately fail to deter infringement, or they may not deter it enough to achieve Voluntary Compliance. Did I mention that I’ll be attending a workshop on alternative compensation tomorrow?

Comments

  1. Anonymous says:

    Voluntary Compliance would already be a reality if the RIAA offered music downloads online at a reasonable price years ago, before napster. But in their infinite stupidity/wisdom, they chose to ignore technology and we are all now paying the price.

  2. *cough*iTunes*cough* People can get music, online, legally. Lots do. Even if it is sligtly over priced, and sprinkled with DRM. I download music because its easier than buying stuff from Amazon. Theres no wait. As I listen to the majority of my music through my PC or iPod this works fine, and iTunes isn’t availible anywhere outside the US. What would truly make me happy is losslessly (or very high quality, open format) encoded music. I wan’t my music to be as portable as a CD, without the hassle of actually being a CD. And right now only MP3 can fullfill that. I get the ease of use, quality, and portability I wan’t for free. And even when I do buy CDs these days, the increasing number of copy protected discs making my own MP3s a hassle which I could do without. I had to download a copy of the latest Dido album because of the copy protection. I pirated music i “owned.” Once I buy music I should be able to use it anyway I want. As long as I dont give it to other people, what does it matter?

    It’s not the lack of on-line music download services that’s really the problem. All that’s needed is a way of easily liscensing the right to music. The RIAA shutdown a sight that was setup to donate money directly to artists. So that people which downloaded music illegally could give back what they had taken from the artists. The hypocrasy of the industry is whats to blame, and possibly if they did suffer worse from illegal music they would start to take note. They can’t sue all of us, it would take literally, millenia.

  3. There’s a pretty interesting implication here. “Voluntary Compliance” isn’t really “voluntary” except in the sense of income taxes being “voluntary”. That is, it’s not as if you do it because you volunteer. Rather, the threat of legal consequences is effective (I’m not saying that’s a bad thing, but rather it’s a more accurate functional description of what is happening).

    So we have that legal consequences work, to restrain information exchanges which are both desired and technically feasible. Hmmm …

  4. fuzzygorilla says:

    While I agree that permitting hundreds of people to use a single purchased copy of music, the issue is that there is no easy way to allow legitimate sharing of a single purchased copy of music. If I want to go to the library and borrow a 45/LP/CD/DVD, that is legal and easy (if sometimes inconvenient). If I want to let a friend borrow a copy of a 45/LP/CD/DVD that I am not listening to, that is legal and easy (if sometimes incovenient). If I want to donate an old 45/LP/CD/DVD that I don’t use any more to the library, so it can be loaned out until the library does not want it any more, at which point it sells it via a ‘used book’ sale, that is legal and easy. Now trying doing any of the similar things in the digital world and see how hard it is to find software to support such functionality (although My.MP3.com tried this on a large scale) and to avoid the RIAA storm troopers from jumping all over you. If I have digitized all my music and I am not using one of the audio files, why should I not be able to loan a single unused copy to a single individual?

    I also have not seen strong evidence that the loss of music business is not due to boycotts or lousy music selection or downturn in the economy or any of the many other factors that would change the business of the music industry. You say you are convinced – please provide some pointers to the papers that include the methodology and techniques used to reach this conclusion.

  5. Cypherpunk says:

    This is one of the best analyses of the issue that I’ve read from the online community. You squarely accept the fact that downloads hurt the music business, and that “permanent noncompliance” means less music for everyone. You also see the risks in alternative compensation systems. Ernest Miller at http://importance.typepad.com/ has written quite a bit about the terrible problems in most of these alternative compensation proposals. I wish he could be at that meeting you mentioned.

    Eventually we will get to a mixture of these scenarios. Some people will comply, some will cheat. Law and technology (and culture, too) influence the proportions. As Seth points out, it’s not all that voluntary if people are compliant because they’re afraid of getting caught sharing illegally. And contrary to the dogma that I think you still have not thrown off, technology can play a role as well in changing these percentages. Make it harder to cheat and you’ll have fewer cheats – simple economics. On the other hand, technology can push the other way, anonymous networks making cheating easier and safer.

    It’s a complicated situation and nobody knows how it will work out. But it’s going to be interesting to watch.

  6. Anonymous says:

    Here is a slightly different view on the issue of file sharing

    http://www.bubblegeneration.com/level2.cfm?resource=musicrisk1

  7. I would be very grateful if you consider the alternative possibility of voluntary compliance through establishing a new online marketplace that is better attuned to the nature of digital media.
    I describe this at http://mediagora.com.

    Sadly prior commitments prevented me from attending the conference today; I hope you and Dereka dn otehrs will blog it thoroughly

  8. The presumption that downloading music – and p2p as a class of software technology – is harmful to the business of creating and distributing music has been proved false time and again. See the various and sundry academic papers looking into this from Wharton and others. What it may harm is the current business model (and this is not certain, given that p2p is a rich source of marketing research data for the industry; and demonstrated impact of the industry’s dropping release rates and shrinking scope of variety in its offering.) Nonetheless, this is a business model which like its predecessors of the sheet music distributors and cinema orchestras, is doomed anyway.

    “Compliance” in this case simply means the coerced sustainment of a failing model in the face of new, agile competition it cannot understand and will not adapt to face. A state of non-compliance in the long term will give rise to new business models – and likely a more robust marketplace that benefits not only the consumer but the artists and those that would effectively intermediate in a positive manner, rather than the hordes of litigious and overreaching industry parasites which have no current role other than as monopolists of a particular distribution channel based on a rapidly obsolescing technology medium.

  9. Adam Thomas says:

    On, Permanent Non-compliance: …
    (A)The music industry shrinks
    (B)less music is created

    I take umbrage with your highly speculative assumption that A necessarily follows B, especially if you define ‘music industry’ as a field larger than simply major labels. Greater prevalence of music shared may broaden personal collections, spurn interest in artists formerly unknown and thus
    -increase the likelihood of ticket purchase for said performer at a live event
    -create a higher demand for said music to be included in a commercial movie
    -increase demand for merchandise associated with the artists (where the artists have been making the real money)

    These shifts in revenues would not kill the music industry, just current business models.

    Every time I see the RIAA wave the bloody shirt of the “mom & pop” record store owner (making their money off retail markups) I can’t help but shiver at the ludicrous nature of the insult – record companies are streamlining brick & mortar out of existence with iTunes & the like. Records stores say they can’t compete with free; it’s never mentioned that they can’t compete with a vastly larger selection available far more conveniently delivered more efficiently at what should be a much lower price.

    This is not a defense of permanent non-compliance; the most likely outcome will be sustained non-compliance until we reach a vast majority of voluntary compliance when song prices drop to a nominal level and act as a loss-leader for my aforementioned revenue streams. It’s already happening* to some degree with free music videos offered via WindowsMedia.

    (*One could also argue that this is a harbinger/iteration of the celestial jukebox ISP tax, with certain corporations buying the rights to musical performances to (1) gain subscribers/advertisers and (2) forestall costly lawsuits for their current subscribers.

  10. I like the 3 tiers your identify with regard to the next chapter of the Napsterisation legacy. A passing comment on voluntary compliance. A possible problem it seems stems from the paradox of the business music model in operation. On the one hand you have the assumption that this business model mirrors the norms and values of the market – in particular, that individuals instinctively seek to engage in rational, self-maximising behaviour. Before Napster, it was taken as read, that the Internet would not change this. Individuals can be said to have “voluntarily” conformed with the expectations of the market’s view of consumers. On the other, with the emergence of end-to-end and P2P – the orthodox narrative of the market would seem to be incapable of providing the requisite discipline in compelling consumers to embrace a counter-intuitive norm. In other words, we are no having to act “irrationally”- ignore the pursuit of rational self interest and embrace a communitarian ideal of the ethics embedded in the business model.

  11. Ed wrote: “Many consumers fail to comply with even the traditional core of copyright law.”

    –> I’m curious if you could expand on this. Until recently (1998), I didn’t think copying music and giving it to your friends was illegal. The current definition of “friends” on the Internet isn’t exactly the same as the common one in 1995 though.

  12. Mr. Felten wrote, in the first paragraph:

    “There is some evidence that the suits filed so far may be working — that they may be successfully deterring some people from redistributing music online. And if the suits are working, that’s good news.”

    Many artists *encourage* redistribution of some or all of their work, and deterring online music sharing is NOT good for these artists. I realize that the first sentence in the paragraph refers to illegal redistribution, and but I do think it is important that our language be as precise as possible.

    Thanks for all your great work!

  13. The copyright holders need to develop a way to compete with file sharing and reduce the desire to infringe. There is no way to acheive complete compliance since there will always be those that want the files for free, perhaps for personal economic reasons or perhaps due to a “stick it to the man” mentality.
    There are problems with file sharing that should be adressed as being the kinks in their armor. One doesn’t know if the file is complete when downloaded, or if it is what it claims to be or if it’s really a “trojan”–a harmful file or virus claiming to be another file. Additionally, it can be hard to find the file you want to download unless you’re looking for the top of the pops.
    An official download site wouldn’t have those kinks and could offer just about anything recorded. Perhaps it would be a pure pay site, ala iTunes or perhaps it could allow limited downloads to each user per time period. One way of justifying allowing free downloads would be to front-load three or more unrequested songs from the same genre as a promotional gimmick in the hopes that those albums are purchased.
    If pure pay sites are chosen, the pricing scheme will need to be adjusted. 99 cents per song is reasonable if you only want one song from an album or want to make a mix, but if you want a whole album, 99 cents per song quickly adds up to as much or more than you can buy the physical CD for at a discount retailler or re-sale store. Granted, iTunes sells many full albums for $9.99, but others are sold for the cummulative sum of the tracks. If full albums were available for download at less than $8, not only would the costs of physical distibution drop, but the copyright holders could also put out of business another thorn in their side, the used CD market.

  14. Blackmore’s Night

    I found Blackmore’s Night by searching a P2P network for Greensleeves in order to practice recognizing minor-third intervals for my Fundamentals of Music class. I liked Blackmore’s Night’s version of Greensleeves enough to look for more of their music …