Recording Industry vs The People: Ha ha ha ha ha. RIAA paid its lawyers more than $16,000,000 in 2008 to recover only $391,000!!!

Tuesday, July 13, 2010

Ha ha ha ha ha. RIAA paid its lawyers more than $16,000,000 in 2008 to recover only $391,000!!!

Big hat tip to my friend Jon Newton at p2pnet.net for uncovering these documents.

The RIAA's "business plan" is even worse than I'd guessed it was.

The RIAA paid Holmes Roberts & Owen $9,364,901 in 2008, Jenner & Block more than $7,000,000, and Cravath Swain & Moore $1.25 million, to pursue its "copyright infringement" claims, in order to recover a mere $391,000. [ps there were many other law firms feeding at the trough too; these were just the ones listed among the top 5 independent contractors.]

Embarrassing.

If the average settlement were $3,900, that would mean 100 settlements for the entire year.

As bad as it was, I guess it was better than the numbers for 2007, in which more than $21 million was spent on legal fees, and $3.5 million on "investigative operations" ... presumably MediaSentry. And the amount recovered was $515,929.

And 2006 was similar: they spent more than $19,000,000 in legal fees and more than $3,600,000 in "investigative operations" expenses to recover $455,000.

So all in all, for a 3 year period, they spent around $64,000,000 in legal and investigative expenses to recover around $1,361,000.

Shrewd.

No wonder they get paid the big bucks

Commentary & discussion:

p2pnet.net
p2pnet.net
Slyck
Slashdot
Download Squad
Boing Boing
LeMonde (French)
Ars Technica
Business Insider
Tech Blog
reddit
Hacker News
Ferrett's Journal: Dinosaurs Must Die
opassande.se (Swedish)
bannination.com
ZeroPaid
digg
digg
winfuture (German)
OWNIlive (French)
metafilter
wearethemusicmakers
vnboards
phog..net
ComputerWorld
tribalwar
dailyswarm
TechDirt
Sitar Teli
gizmodo
drudge retort
bomb the music industry
dallas imports
maximumpc
sluniverse
torrentfreak
paste magazine
techmeme
betanews
tech eye
geek.com
NewLaunches.com
overclock.net
rage3d
linux today
trendalicious
whatreallyhappened.com
icerocket.com
ebusiness.info (French)
the present and future of post production business and technology
outerspace (Portugese)
habrahabr (Russian)
Hard Forum
Southern Maryland Online
GarrettWalker.com/Today
computeridee (Dutch)
gamevicio (Portugese)
The Big Lead
Lenta.ru (Russian)
AltDaily
HypeBot
Daily Online Examiner
Forte (Swedish?)
Jaakko Koivula blog (Finnish)
Tech News Today 31
Inside STL (top "Fail" of the day)
nezinau.lt (Lithuanian?)
switched
adslgr.com (Russian)
EfectoTequila (Spanish)
fyeahqueermusic
adslzone (Spanish)
metal insider
intern.de (German)
ABA Journal
ITProPortal
pcinpact (French)

Keywords: lawyer digital copyright law online internet law legal download upload peer to peer p2p file sharing filesharing music movies indie independent label freeculture creative commons pop/rock artists riaa independent mp3 cd favorite songs intellectual property portable music player

23 comments:

Anonymous said...: I took a quick look through this and was wondering if by using this document and cross referencing it with other publicly available documents would it be possible to find out who they contributed money to? Maybe we can get these guys voted out of office? Or at least bring this information to light?

Well, at least if they keep this up, then maybe they will go bankrupt?

Just a thought.

-Me; July 13, 2010 at 12:02:00 PM EDT
Anonymous said...: How much did they spend buying legislation through their Lobbying...; July 13, 2010 at 12:04:00 PM EDT
w&w said...: I share your shadenfreude. Of course, when I mentioned this dimension of the RIAA's campaign during the Tenenbaum trial last summer, you scolded me for giving the RIAA rhetorical ammo.; July 13, 2010 at 1:03:00 PM EDT
Anonymous said...: Some where the numbers don't add up. They are not disclosing accurate information in their reports. Who would investigate their books?; July 13, 2010 at 1:23:00 PM EDT
raybeckerman said...: Dear Anonymous

1. You've got the forms; you tell me.

2. You're supposed to give us a "handle" when you post anonymously.; July 13, 2010 at 1:36:00 PM EDT
raybeckerman said...: Dear w&w

Me? Scold?

Inconceivable.; July 13, 2010 at 1:50:00 PM EDT
Anonymous said...: You're missing the point, Ray. It's not about making money at all. We need to call this what it is: Litigation terrorism. The RIAA is trying to instill the fear of being sued in hopes that it will deter would-be downloaders. It's not at all about trying to recover damages.; July 13, 2010 at 1:53:00 PM EDT
raybeckerman said...: Dear M. Yass:

I guess you're right; after all they did bring an end to peer to peer file sharing on the internet.

(Oh wait... did someone just tell me that p2p filesharing has increased exponentially since the litigation campaign was commenced? If so, I guess that as a "deterrent" .... it didn't work so great.); July 13, 2010 at 2:15:00 PM EDT
tebee said...: This is the total amount they got in in settlements from all the threatening letters they sent out? It doesn't seem a very good rate of return, do we know how many they sent out in this period?

Even if you count the deterrent effect I don't think it's good value for money, and anyway I would suspect the number of new file-sharers attracted by the publicity is probably greater that the number who stop because they are scared of getting caught.; July 13, 2010 at 2:15:00 PM EDT
raybeckerman said...: Yeah, tebee. I was astonished there were so few.

I always figured they were getting nothing from the default judgments and nothing from the contested cases, but I assumed they were raking in ~2000 settlements a year. It turns out they were getting only ~150 settlements a year, if that much.

What a colossal waste of money.; July 13, 2010 at 3:05:00 PM EDT
raybeckerman said...: For a fraction of that money they could have hired some cool innovative coders to develop fun ways to market, buy, and share music.; July 13, 2010 at 3:07:00 PM EDT
red floyd said...: Well, now we know why they claim such huge losses due to "piracy"...; July 13, 2010 at 10:41:00 PM EDT
Anonymous said...: What is the standard payment agreement on these settlements? Monthly payments?

A sadder way to look at it -- using the 100 cases approximation, and assuming the process/settlement effectively bankrupts most victims -- is that it only costs $160,000 in legal fees to ruin someone's life.

Zapp; July 13, 2010 at 11:22:00 PM EDT
Anonymous said...: Heh, for $19M they could have paid some artists to make music.; July 14, 2010 at 12:28:00 AM EDT
Anonymous said...: Does the RIAA have a board of directors that could potentially sue their executive staff for what is appearing to be gross incompetence? After the first few years of bad press and negative sum returns, someone should have just said "this isn't worth it" and killed off this money pit.; July 14, 2010 at 12:28:00 AM EDT
Unknown said...: Over 16 million...wow...

I've always said that the "message" they were trying to convey was that of, "we're in control and we'll RUIN anyone that challenges that control..."

I'd have to agree on your points, though, Ray- I'm honestly surprised there's not been investor lawsuits over it.; July 14, 2010 at 12:31:00 AM EDT
Anonymous said...: If the RIAA's anti-music sharing campaign is an effort at deterrence (rather than an an attempt to recoup industry losses), then the numbers that will inform their decision about the efficacy of the campaign must be some measure of that deterrence (rather than return on litigation). But how do they measure deterrence? How is deterrence distinguishable from other factors that affect the industry's overall returns? It appears to be built into the system that nobody can show them their campaign isn't working.

-Berco; July 14, 2010 at 1:35:00 AM EDT
Anonymous said...: What is eve better is that the Artists who made these songs have that 16M deducted as expenses, but see nothing of the 300k; July 14, 2010 at 2:50:00 AM EDT
canlı maç izle said...: Heh, for $19M they could have paid some artists to make music. this is very comic; January 26, 2011 at 3:00:00 AM EST
canlı maç izle said...: I have same question "Some where the numbers don't add up. They are not disclosing accurate information in their reports. Who would investigate their books?"; June 3, 2011 at 7:30:00 PM EDT
Brian@attorneys letter said...: I think the amount paid to the Lawyers is really huge amount for solving the case by RIAA.The amount paid is more than for getting the dispute amount of money.They are trying to stop the sharing of the files in torrent site.But it can stop the software piracy.; October 1, 2011 at 6:42:00 AM EDT
latinos in rhode island said...: Ria paid too much amount for her work. May be it is default judgments and nothing from the contested cases. It is Good for her Hopefully, if she wins.; October 21, 2011 at 3:00:00 AM EDT
lig tv izle said...: Heh, for $19M they could have paid some artists to make music.; September 13, 2012 at 9:59:00 PM EDT

Post a Comment

JUDICIAL QUOTATIONS

"[T]he Court is concerned about the lack of facts establishing that Defendant was using that IP address at that particular time. Indeed, the [complaint] does not explain what link, if any, there is between Defendant and the IP address. It is possible that Plaintiff sued Defendant because he is the subscriber to IP address .... As recognized by many courts, just because an IP address is registered to an individual does not mean that he or she is guilty of infringement when that IP address is used to commit infringing activity." -Hon. Barry Ted Moskowitz, Chief Judge, S.D. California. January 29, 2013, AF Holdings v. Rogers
"The complaints assert that the defendants – identified only by IP address – were the individuals who downloaded the subject “work” and participated in the BitTorrent swarm. However, the assumption that the person who pays for Internet access at a given location is the same individual who allegedly downloaded a single sexually explicit film is tenuous, and one that has grown more so over time." - Hon. Gary R. Brown, Magistrate Judge, E.D.N.Y. May 1, 2012, K-Beech v. Does 1-37
"The concern of this Court is that in these lawsuits, potentially meritorious legal and factual defenses are not being litigated, and instead, the federal judiciary is being used as a hammer by a small group of plaintiffs to pound settlements out of unrepresented defendants."
-Hon. S. James Otero, Dist. Judge, Central Dist. California, March 2, 2007, Elektra v. O'Brien, 2007 ILRWeb (P&F) 1555
"The University has adequately demonstrated that it is not able to identify the alleged infringers with a reasonable degree of technical certainty...[C]ompliance with the subpoena as to the IP addresses represented by these Defendants would expose innocent parties to intrusive discovery....[T]he Court declines to authorize discovery and quashes the subpoena as to Does # 8, 9, and 14" -Hon. Nancy Gertner, Dist. Judge, Dist. Massachusetts, November 24, 2008, London-Sire Records v. Does 1-4
"[C]ounsel representing the record companies have an ethical obligation to fully understand that they are fighting people without lawyers... that the formalities of this are basically bankrupting people, and it's terribly critical that you stop it...." -Hon. Nancy Gertner, Dist. Judge, Dist. Massachusetts, June 17, 2008, London-Sire v. Does 1-4
"Rule 11(b)(3) requires that a representation in a pleading have evidentiary support and one wonders if the Plaintiffs are intentionally flouting that requirement in order to make their discovery efforts more convenient or to avoid paying the proper filing fees. In my view, the Court would be well within its power to direct the Plaintiffs to show cause why they have not violated Rule 11(b) with their allegations respecting joinder. [I]t is difficult to ignore the kind of gamesmanship that is going on here.....These plaintiffs have devised a clever scheme... to obtain court-authorized discovery prior to the service of complaints, but it troubles me that they do so with impunity and at the expense of the requirements of Rule 11(b)(3) because they have no good faith evidentiary basis to believe the cases should be joined." -Hon. Margaret J. Kravchuk, Magistrate Judge, District of Maine, January 25, 2008, Arista v. Does 1-27, 2008 WL 222283, modified Oct. 29, 2008
"[N]either the parties' submissions nor the Court's own research has revealed any case holding the mere owner of an internet account contributorily or vicariously liable for the infringing activities of third persons.....In addition to the weakness of the secondary copyright infringement claims against Ms. Foster, there is a question of the plaintiffs' motivations in pursuing them..... [T]here is an appearance that the plaintiffs initiated the secondary infringement claims to press Ms. Foster into settlement after they had ceased to believe she was a direct or "primary" infringer." -Hon. Lee R. West, District Judge, Western District of Oklahoma, February 6, 2007, Capitol v. Foster, 2007 WL 1028532
"[A]n overwhelming majority of cases brought by recording companies against individuals are resolved without so much as an appearance by the defendant, usually through default judgment or stipulated dismissal.....The Defendant Does cannot question the propriety of joinder if they do not set foot in the courthouse." -Hon. S. James Otero, Central District of California, August 29, 2007, SONY BMG v. Does 1-5, 2007 ILRWeb (P&F) 2535
"Plaintiffs are ordered to file any future cases of this nature against one defendant at a time, and may not join defendants for their convenience."
-Hon. Sam Sparks and Hon. Lee Yeakel, District Judges, Western District of Texas, November 17, 2004, Fonovisa v. Does 1-41, 2004 ILRWeb (P&F) 3053
"The Court is unaware of any other authority that authorizes the ex parte subpoena requested by plaintiffs."
-Hon. Walter D. Kelley, Jr., District Judge, Eastern District of Virginia, July 12, 2007, Interscope v. Does 1-7, 494 F. Supp. 2d 388, vacated on reconsideration 6/20/08
"Plaintiffs contend that unless the Court allows ex parte immediate discovery, they will be irreparably harmed. While the Court does not dispute that infringement of a copyright results in harm, it requires a Coleridgian "suspension of disbelief" to accept that the harm is irreparable, especially when monetary damages can cure any alleged violation. On the other hand, the harm related to disclosure of confidential information in a student or faculty member's Internet files can be equally harmful.....Moreover, ex parte proceedings should be the exception, not the rule."
-Hon. Lorenzo F. Garcia, Magistrate Judge, District of New Mexico, May 24, 2007, Capitol v. Does 1-16, 2007 WL 1893603
"'Statutory damages must still bear some relation to actual damages." Hon. Michael J. Davis, Dist. Judge, U.S.District Court, Dist. Minnesota, January 22, 2010, Capitol Records v. Thomas-Rasset
"[T]his court finds that defendants' use of the same ISP and P2P networks to allegedly commit copyright infringement is, without more, insufficient for permissive joinder under Rule 20. This court will sever not only the moving defendants from this action, but all other Doe defendants except Doe 2."
-Hon. W. Earl Britt, District Judge, Eastern District of North Carolina, February 27, 2008, LaFace v. Does 1-38, 2008 WL 544992
"[L]arge awards of statutory damages can raise due process concerns. Extending the reasoning of Gore and its progeny, a number of courts have recognized that an award of statutory damages may violate due process if the amount of the award is "out of all reasonable proportion" to the actual harm caused by a defendant's conduct.[T]hese cases are doubtlessly correct to note that a punitive and grossly excessive statutory damages award violates the Due Process Clause....."Hon. Marilyn Hall Patel, Dist. Judge, N.D. California, June 1, 2005, In re Napster, 2005 US DIST Lexis 11498, 2005 WL 1287611
"[P]laintiffs can cite to no case foreclosing the applicability of the due process clause to the aggregation of minimum statutory damages proscribed under the Copyright Act. On the other hand, Lindor cites to case law and to law review articles suggesting that, in a proper case, a court may extend its current due process jurisprudence prohibiting grossly excessive punitive jury awards to prohibit the award of statutory damages mandated under the Copyright Act if they are grossly in excess of the actual damages suffered....."-Hon. David G. Trager, Senior District Judge, Eastern Dist. New York, November 9, 2006, UMG v. Lindor, 2006 U.S. Dist. LEXIS 83486, 2006 WL 3335048
"'[S]tatutory damages should bear some relation to actual damages suffered'....(citations omitted) and 'cannot be divorced entirely from economic reality'". -Hon. Shira A. Scheindlin, Dist. Judge, Southern Dist. New York, August 19, 2008, Yurman v. Castaneda
"The Court would be remiss if it did not take this opportunity to implore Congress to amend the Copyright Act to address liability and damages in peer to peer network cases.... The defendant is an individual, a consumer. She is not a business. She sought no profit from her acts..... [T]he damages awarded in this case are wholly disproportionate to the damages suffered by Plaintiffs." -Hon. Michael J. Davis, District Judge, Dist. Minnesota, September 24, 2008, Capitol v. Thomas
"If there is an asymmetry in copyright, it is one that actually favors defendants. The successful assertion of a copyright confirms the plaintiff's possession of an exclusive, and sometimes very valuable, right, and thus gives it an incentive to spend heavily on litigation. In contrast, a successful defense against a copyright claim, when it throws the copyrighted work into the public domain, benefits all users of the public domain, not just the defendant; he obtains no exclusive right and so his incentive to spend on defense is reduced and he may be forced into an unfavorable settlement." US Court of Appeals, 7th Cir., July 9, 2008, Eagle Services Corp. v. H20 Industrial Services, Inc., 532 F.3d 620
"Customers who download music and movies for free would not necessarily spend money to acquire the same product.....RIAA’s request problematically assumes that every illegal download resulted in a lost sale."
-Hon. James P. Jones, Dist. Judge, Western Dist. Virginia, November 7, 2008, USA v. Dove