RIAA ROI on litigation? -97%

Posted on Friday, July 16th 2010 at 11:33 a.m.

Via Slashdot , I came across some interesting statistics regarding the music industry’s attempts to stop music piracy through litigation.

In 1995 the mp3 codec was made public .  In 1999 Napster was released , and the era of peer-to-peer (P2P) file sharing began.

The recording industry quickly became alarmed at the potential of the service and initiated legal action against Napster.  Napster shuttered its doors initially in 2001, but by that point the genie was already out of the bottle.  Since then the RIAA has pursued an aggressive practice of suing other file sharing services as well as individual downloaders.

The blog Recording Industry vs. The People recently provided some figures on the net results of the last three years of campaigning:

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……….

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.

The net result?  From 2006 to 2009, the RIAA spent $64M to recover approximately $1.4M, or an ROI of -97%.

The only hope at this point is that recording artists continue to realize that they are better off marketing themselves than joining a major record label.  Eventually the major labels will run themselves into the ground and we can hopefully move to a new era where musicians can earn a living and music fans get exposed to a variety of music that hasn’t been chosen for them by A&R; reps and radio station program directors.

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