After flooding ISPs and universities with thousands of subpoenas targeting individual consumers, the Recording Industry Association of America (RIAA) has moved from threats to open warfare, filing 261 lawsuits against those whom it terms the most egregious file swappers — users caught sharing more than 1,000 files on free peer-to-peer networks, such as Kazaa.
The association claims this batch of lawsuits is just the first wave of many, and that thousands of additional suits will be filed in coming months.
Although the RIAA announced an amnesty offer late last week for people who have engaged in illegal file-sharing but are willing to cease and desist officially from such action, the offer is not available to those who already have been sued. Moreover, the Electronic Frontier Foundation on Friday released a statement warning consumers against blindly accepting the amnesty proposal.
The RIAA’s latest actions are not likely to endear it to many consumers, especially because the group’s past efforts to contain rampant music piracy have generated plenty of controversy. Earlier this year, several irate individuals set up a Web site, Boycott-RIAA.com, to protest the organization’s big-stick approach to the digital piracy problem.
In addition to raising users’ ire, the lawsuits are unlikely to squelch the tide of file-swapping, Frost & Sullivan analyst Jarad Carleton said.
“[Users] won’t stop sharing,” he told the E-Commerce Times. “They will just go to protected P2P clients, such as Freenet, where it is not possible to tell where a person downloaded a file.”
Still, not all users will be so stubborn in the face of legal action, according to industry analyst Rob Enderle. “Some will stop, some will be safe because of where they live or who they are, and some will find safer ways to do this,” he told the E-Commerce Times. Regardless, “it will reinforce the message that this is theft and comes with risk.”
He noted that subscriptions to legitimate services like iTunes and BuyMusic.com “are already on the upswing, largely due to the concerns surrounding this issue.”
Indeed, Enderle argued that although the RIAA’s methods may be somewhat crude, the ultimate outcome could be positive for the organization.
“It is never good to sue your customers, but it raises the risk of file-sharing and by doing so increases the relative value of CDs,” he said. “The end result should be an increase in revenue.”
Biting the Hand That Feeds
However, Frost & Sullivan’s Carleton contends the RIAA has made a tactical error in choosing to attack its own customers. He asserts that consumers should not bear the brunt of the blame for the sharp decline in CD sales in recent years. Instead, record labels’ lack of initiative online is at least part of the problem.
“I strongly feel that the music industry is focusing its efforts in thewrong direction right now,” Carleton said. “With the exception of [Apple’s] iTunes, which still is not a service that Windows users can take advantage of, the music industry hasn’t focused on developing online digital music sales. Right now they are determined to try and protect outrageous CD prices (with the exception of Universal).”
Indeed, although music labels have endorsed several online services, including Roxio’s Pressplay, AOL’s MusicNet and Listen.com’s Rhapsody, none but iTunes, which has sold 10 million songs since launching in April despite its Mac-only user base, has achieved anything resembling mass acceptance.
Carleton said the RIAA and its member labels should take several things into account when developing online music sales models.
“Digital pieces of music that are sold online have to have the same properties as a physical CD,” he said. “Users must have the ability to listen to the music on multiple devices (not necessarily on all devices at once, but they should be able to move the music from one device to another). Users must have the ability to make backup copies, and users must have the ability to give the digital file away to someone else when they no longer want it.”
So far, he noted, only one service has accomplished those goals while still including enough digital rights management (DRM) technology to satisfy music industry heavyweights. “iTunes essentially answers all of those key aspects — and that is why they are successful and the record industry-sponsored sites have not been successful.”
Miles To Go
Despite his praise of iTunes, Carleton said there isn’t a service that anybody from around the world can log on to and use to purchase music regardless of OS, which, according to Carleton, shows that the recording industry has not kept pace with technology.
“If they don’t wake up soon, they’ll suffer even more financial damage than they have already,” he said.
“I realize that music companies want to control distribution in each country or region,” he added, “but in an era when all they can say to the press is how P2P file traders are robbing them blind, perhaps it’s time for them to stop complaining and time to start doing something that will be effective, because it’s clear to me that suing is only going to drain their coffers even further.”