RIAA goes after the little guys

By Jefferson Graham, USA TODAY
When Karol Franks, a mother of two teens in Pasadena, Calif., heard Wednesday that the music industry was threatening to sue average folks who swap music online — like her kids — she posed a question that must have been on many minds: "How can there be a lawsuit when there are tens of thousands of people who use file-sharing programs?"
Because the Recording Industry Association of America, flush with recent court wins in its fight against digital piracy, can now move from suing the companies that facilitate the free swapping of music files to targeting some of the 57 million computers users who regularly swap. (Related item: Facts about file sharing.)

By the numbers

People who use file-sharing services in the USA: 57 million

Number of times Kazaa's software has been downloaded worldwide: 230 million

Users sharing files Wednesday afternoon on Kazaa: 4.2 million

Files being shared on Kazaa Wednesday afternoon: 900 million

Songs sold in two months at Apple Music Store: 5 million

percentage of ages 12 to 18 who say they'd download a new song they like: 35%

percentage of ages 12 to 18 who say they'd buy a new song they like: 10%

Source: The Yankee Group, RIAA, USA TODAY research






Going after home users is the industry's best chance to slow the growth of file-swapping services, which have boomed since Napster's demise in 2001.

And the record labels, suffering a drop of 20% in album sales since 2000 according to unreleased Nielsen SoundScan figures, feel they need to take action.

But for parents such as Franks, "these are kids who I believe are the majority of the thieves," she says. "To what extent would they be able to make financial amends if these minors can be held liable?"

In practical terms, not much. Four college students were sued in April, and settled shortly after for $12,000 to $17,500 each. But potential fines are a whopping $150,000 a song, which would make a person who shares as few as 10 songs online accountable for $1.5 million.

Attorney Whitney Broussard calls the copyright fines astronomical. "The penalty far outweighs the actual harm," he says. "When the reality of the size of these damages sinks in, when the parents of a 15-year-old downloader are sued for millions, people are going to be stunned."

Few expect that even legal action against users will end online piracy. But the industry hopes to at least give breathing room to some of the legal services starting to gain traction.

"It's very difficult to compete with free," says Bob Ohlweiler of MusicMatch, which has the largest subscriber base of any legitimate subscription service — 145,000 users for its listen-only MX Radio — and hopes to start selling song downloads by summer's end. "The injection of personal responsibility is a sensible approach. It's like a speeding ticket. Everybody doesn't get one, but a few people do, and a lot of people slow down."

Others see the offensive against fans as another wrongheaded move by an industry that could have handled the situation with vision years ago.

"Can you imagine Wal-Mart spending time to collect evidence, file lawsuits against its customers together and clog up the courts?" says Gale Daikoku, retail analyst with market research firm GartnerG2. She calls this kind of assault on a customer base "unprecedented." Theft in the $2.7 trillion retail industry is 2% of sales, she says, but stores like Macy's and Nordstrom "focus on making the customer experience better and having people return to the stores, not on chasing them away."

Not everyone buys into piracy as the sole cause of the industry's slump. "Digital copying, whether file sharing or CD burning, is definitely a factor, but it's not the only culprit," says Geoff Mayfield, Billboard's director of charts. "Music is not necessarily a recession-proof product. ... When you're not certain of your job status or how much money you have in the bank, it's easy to put off buying music, especially if you're not a kid."

But Andrew Lack, CEO of Sony Music, home to such artists as the Dixie Chicks, Bruce Springsteen and Bob Dylan, hails the move as just what the industry needs. "I liken this to Chapter 1 of the new book being written about digital music," he says. "The lawsuits are an additional mechanism to level the playing fields, and a measure of how much the game has changed."

Lack believes consumers will be induced by this action to seriously consider legal alternatives such as Apple's Music Store, which has sold 5 million songs in its first two months. "Legitimate music is readily available online and more services will be out there for consumers. That's the headline."

The recent introduction of the Apple Store wowed critics and users with its ease of use — all songs are 99 cents a track, with few of the restrictions found on other services. But the Apple Store is only available to Apple users, about 3% of the computer market.

"We're dancing as fast as we can," says Lack. "By the end of the year, Apple, Microsoft, Amazon and others will have services for Windows users as well."

Try telling that to Jorge Gonzalez, who runs zeropaid.com, a Web site that serves as a forum for online music fans and includes links to file-sharing software such as Kazaa and Morpheus, as well as newcomers named Blubster and Earth Station 5. He says that average users might be intimidated, but knowledgeable computer users will always be several steps ahead of the industry.

"There will be a large migration from Kazaa to other networks, where people feel more secure," Gonzalez says. "But will it stop file sharing? Hell no." He says several new services are being developed to hide users' identities: "Technology will always evolve around such obstacles."

Tom Rogers, 31, a frequent downloader from Brooklyn, says there's no way he's going to stop sharing online music. "There are those who think that peer-to-peer is equivalent to bank robbery, but I disagree. Most of my activity involves uploading and getting a satisfying feeling that I am sharing something beautiful with friends and a community of music lovers."

Should Rogers or others be targeted, "the law is pretty clear; there's no defense," says Palo Alto, Calif., lawyer Mark Radcliffe. "Most people won't have the resources to pay for attorney fees, and if they came to me, I'd say, 'Settle.' "

The RIAA says that, to start, it's going after traders who share large numbers of files. RIAA president Cary Sherman says that about 90% of all online music piracy is committed by 10% of users. "It demonstrates that if you can get to these 10%, you can have a dramatic impact on the peer-to-peer systems."

But worried parents may not be buying it. "Has a theater ever sued a kid for sneaking into a movie without paying?" Karol Franks says. "I think the music industry will spend a lot of money for little reward."

Contributing: Edna Gundersen, Christopher Theokas

 

here's my simplistic reasoning on this subject

i feel that going after anyone is dumb, pointless and really assbackwards. sharing is the way of the future. it is economical, easy and i honestly feel it promotes the music industry!

what they ought to do is think up another way to make it worth our while to actually buy their cd's! put some bonus shit in there that you cant download off of kazaa or anywhere. do something for us instead of just getting rich off of us. sheez! they oughta be happy we even bother to check all that shit out.

they need to make those cd prices reasonable, for godsake. kids who want this stuff dont have that kind of money. man, they charge $12 bucks and often, only one or two songs sometimes three tracks are worth listening to. it is very rare i buy a cd and all of it is good.

i say more power to sharing!

 

I figure if they log about 100 million new lawsuits in the courts they will get to me when I'm about 200. What do you have to live for at 200 anyway?

 

I stopped sharing after the last threat. Not worth the risk to me, and I've never felt completely comfortable with it anyway. Always that little pang of guilt.

 

Question

If you are on Kazaa and you are downloading files,songs, etc. but not sharing files, then you will not be targeted in the lawsuits? Only those that are sharing, rught?

 

Re: Question

Good question and the answer is?

Also, what about the computer dumbass who did not fix Kazaa so it does not automatically launch in the system tray... There's probably a lot of people that have Kazaa running in the background and don't realize it.

 

and don't forget people its against the law to tear those little tags off your matress too...

 

Re: Question

question: if one is not sharing and just taking, then that is messed up. i realize some people just want stuff, but you gotta share stuff too. they dont gotta, but man. that's just not right.

anyhoo...to each his own. i find it hard to believe those ones just take and no one cuts them off with their download. sharers are really generous! that is one reason i like the concept.

to me, these guys who want to sue will just spend a lot of money and will get nowhere in the long haul. there will be another one to replace the ones they put away. i think my original suggestion is sound. give us, the consumers, a good reason to buy those cd's (and dont give me that copyright infringement, dammit!) we are not re selling these, k? i will feel different if someone was doing it for commercial purposes. personal use, is ok, i think. if i like the tune i downloaded, i will buy that cd bec i will prolly want to hear more of the same.

that's just my 2 cents. so sue me.

the ones just taking and not sharing prolly should be sued, tho. i dont mean you, silkie. am just saying.