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!!!
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
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posted by Ray Beckerman @ 7/13/2010 11:26:00 AM
25 Comments:
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
By
Anonymous, at July 13, 2010 12:02:00 PM EDT
How much did they spend buying legislation through their Lobbying…
By
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.
By
Some where the numbers don’t add up. They are not disclosing accurate information in their reports. Who would investigate their books?
By
Dear Anonymous
1. You’ve got the forms; you tell me.
2. You’re supposed to give us a “handle” when you post anonymously.
By
Ray Beckerman, at July 13, 2010 1:36:00 PM EDT
Dear w&w
Me? Scold?
Inconceivable.
By
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.
By
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.
By
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.)
By
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.
By
For a fraction of that money they could have hired some cool innovative coders to develop fun ways to market, buy, and share music.
By
Well, now we know why they claim such huge losses due to “piracy”…
By
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
By
Heh, for $19M they could have paid some artists to make music.
By
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.
By
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.
By
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
By
What is eve better is that the Artists who made these songs have that 16M deducted as expenses, but see nothing of the 300k
By
$16M is a fraction of the marketing budget of most of RIAA’s members. RIAA is not a company, it is a organization. So there is no need to make revenues.
Similarly AMA, AHA spend lots of money in lobbying people. I dont see anyone laughing at them spending money.
RIAA is not trying to make money - it is trying to stop piracy. Unlike earlier, now everyone knows that is piracy. The number of pirated downloads have also significantly dropped.
So maybe you think it is funny - but I think the joke’s on you, and just demonstrates your lack of understanding of what they are doing!
By
That $16,000,000 in legal fees are not paid by the RIAA.
They are paid by the people who don’t use P2P, who go to the stores to buy the CDs and DVDs.
~Sarge
By
We know the RIAA spent more than $16,000,000 in legal fees. That’s not surprising. We don’t know how much of that was spent pursuing filesharers. So we have no idea how much it cost them to get that $391,000.
By
They’ve just been doing it wrong. They need to learn from these guys: http://ow.ly/2bgaB. Once this business model, I mean protection racket, I mean way of protecting copyright gets out and mainstreamed the RIAA should turn around.
By
M. Yass is onto something, but its not the whole picture. The RIAA isn’t only spending this money to intimidate, they are also trying to “buy” a precedent. They want a court to award heavy damages so they can point to that ruling and use it as a club to beat the litigation war drums once again… this time with legal precedent on their side. It’s the only reason they are still litigating with people like Tenenbaum and Thomas-Rasset, and why they will refuse to let the reduced awards stand without a serious fight.
By
Or they could have just agreed to licence music for a subscription service run by Napster back in 2000 and avoided this whole mess.
By
Please. I hate the RIAA as much as anyone, but this post is short sighted. It’s not about the money they squeeze out of defendants. It’s about scare tactics. It’s about making millions of people so terrified to pirate music they actually *gasp* buy it. Every album bought instead of pirated equals money. Put a number on that if you will.
Whether or not profits have actually been worth it is anyone’s guess, but that’s how the suits at the top think about it. That’s why they’re so ruthless.
By
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