The RIAA: Mistakes of the Past, Opportunities for the Future

Abstract

The invention of digital files revolutionized the entertainment industry, drastically increasing the portability of music and movies and leading to new industries like video games. But this new invention, like many before it, was met with a type of laissez faire attitude as the regulatory organizations were unprepared for its implications. The United States and international organizations were slow to set out formal rules for this new wave of technology, which left companies and consumers fighting a sort of digital "is/ought" problem. The Recording Industry Association of America (RIAA) took the lead in the battle against the copyright infringement that this new technology spurred by "suing the technology", or more accurately, suing those who made it available. They had early legal success against Napster, but new services were designed to limit responsibility and deflect criticism. After all, the services themselves were not illegal, and many used them for legal file-sharing. As the RIAA lost some of their lawsuits against the post-Napster services, they moved from suing the technology to suing the providers- or the Internet Service Providers (ISPs) to be specific. This second phase of their plan was limited, as the ISPs were also large and powerful corporations. Instead, the RIAA sued them as a springboard for their third step, which was a campaign to sue the consumers directly. Much criticism developed from the RIAA's campaign to target the consumers, the same consumers they wanted to buy their product. Isolated stories of lawsuits against children, the disabled, and even deceased people shifted public opinion against the organization. Their strategy of mass litigation was labeled "spamigation" and some defendants filed and won countersuits against the RIAA. Others argued that if the record industry truly cared about curtailing illegal downloading they would put more effort into a competent legal alternative for downloading music. It finally took a company outside of the RIAA to offer this alternative, and the iTunes Music Store slowly picked up momentum to achieve the 70% market share in online music it has today. The RIAA does not seem to have a solid foundation in economics. They have tried to convince people that CDs are underpriced based on the Consumer Price Index, don't seem to understand the opportunity that an infinite good presents, and have tried to reframe the piracy debate to "we can't compete with free." They even sued a Russian company for more than the entire GDP of the country. Worst of all, the organization hasn't given a cent of the millions of dollars in winnings from their lawsuits to the artists they are acting on the behalf of. The music industry should try to work with developing technology like Peer-to-Peer services. They can do this by organizing a voluntary collective licensing scheme where users pay a small monthly fee to continue doing what they clearly are going to do anyway (i.e. use p2p . services). The money would then be divided between artists based on the popularity of their songs, allowing them to easily reach a wider audience. If they so choose the music industry can combine this plan with ad-sharing or a media tariff, but the core of their plan needs to include p2p technology. Once instituted, the RIAA would have much less people to file lawsuits against and would not be so loathed publicly. Adoption rates for p2p technology continue to rise, and the RIAA needs to embrace the new technology rather than trying to fight it.