RIAA: The Big Internet Bully

MP3 downloading is a widespread Internet phenomenon. It is highly popular.

The Recording Industry Association of America (RIAA) is presently conducting the most disastrous, most stupid strategy that they could ever devise to stop this activity.

The position of the RIAA and its attorneys is that this is stealing copyrighted material. The downloading public shares no such opinion. In fact, their attitude toward the RIAA is that of hostility.

Who is right? The answer is that the customer is always right.

But the sad fact about this is that the RIAA has decided to disregard this time-honored tradition. It is actually hostile to its buying public. I am on the side of the downloaders.

Downloading is not stealing. There may be people who get their music for free, but the amount that the RIAA fears is nowhere near the actual amount that they claim.

Historically, the entertainment industry has long been jealously guarding its products. It has fought technology for well over 70 years – almost since its inception. This mentality, attitude and strategy have survived ever since. The RIAA is but the latest continuation.

Let’s go into the past to review the stupidity of the entertainment industry and examine a few cases of its behavior.

When radio was invented and stations searched for content to broadcast, the entertainment industry fought this technology back in the 1920s/1930s. Just imagine that! They fought radio play of their artists’ music!

Just how did they think that people would know of any new music or any new artists if they didn’t hear it on the radio? The entertainment industry expected the public to attend expensive live concerts of the said artists, or expected the public to buy LP recordings. They ignored the possibility that offering music on the radio might create a new market where none had existed before.

That turned out to be the case when music was finally allowed to play on radio stations. The radio industry paid royalties to play copyrighted music per airplay. The public got to hear popular music for free over the air, and if they liked it, they bought the records. A new market was created that has been lucrative ever since.

Yet the reaction of the entertainment industry is to fight new technology at every turn and ignore new potential markets to market their products. The entertainment industry seems to persistently forget that the public doesn’t seem to need music, films or books to survive in life. They need food and water. Therefore, the arts are entirely a discretionary purchase as far as economics goes. The RIAA seems to have ignored this fact too.

Flash forward a few decades to the invention of the reel-to-reel tape recorder, which could copy music heard over the radio. The entertainment industry fought this technology too.

It fought the 8-track tape and the cassette tape and the related recorders that were produced by manufacturers.

And let’s not forget that entertainment industry also fought the VHS and VCR videotape technologies as well. The entertainment industry lost the case against VHS and VCR in the U.S. Supreme Court, who allowed the public to record what they watched on TV.

CD technology and digital audiotape were also vigorously fought by the RIAA.

The Internet and the related MP3 format are but the latest battleground for the entertainment industry to resist the advance of new technology. True to historical form, they are deploying a battery of briefcase-toting lawyers to make their case.

They needn’t have bothered, had they heeded the lesson of IBM.

The lesson is that a company cannot force and increase its market share by suing their competition out of existence. This is especially true when the product is one that while the public might want, it doesn’t need to buy.

IBM was incensed at losing half their market share to clone computer makers who used the same off-the-shelf parts and components to make their products cheaper than and of comparable quality to that of IBM’s.

IBM set out to invent new technology that was proprietary and they employed lawyers to sue anybody unauthorized (who didn’t license the technology) to reproduce their technology. The public revolted at proprietary technology, yet this still doesn’t seem to stop some companies from suing this failed strategy. Today, Microchannel and the OS operating system are not the dominant forms of computer technology, and IBM no longer is the leading maker of PCs today. Those never caught on. Lawyers can never increase your market share.

People do not prefer the incompatible, proprietary systems because they cannot upgrade their PC systems properly. People have a natural hatred for monopolies and they prefer choice to having been forced to buy something available without an element of choice.

This is a lesson that the RIAA has been tremendously slow to see.

There has been a two-pronged attack upon the MP3-downloading practice by the RIAA.

At first, the RIAA went after the Internet companies that had central servers that held illegal copies in MP3 format that users downloaded for free. The RIAA was somewhat successful in that it succeeded in shutting down Napster in this form.

Today, Napster is pay-for-music service, and the entertainment industry is getting paid for its copyrighted music.

However, the Internet quickly reacted. File-sharing programs became the choice of downloaders. These programs have no central servers of a company to sue. Every user of a file-sharing program has his or her own computer as a separate server. Now the act of suing becomes tougher because over 11,000,000 users have to be individually sued.

The RIAA decided to go after individual users, after long hesitating to do so because of a potential backlash from the public.

Emboldened by their success in the courts by shutting down Napster and others, they decided to go after individual consumers anyway. The result at present is mixed and the reaction of the Internet-suing public has been predictably hostile.

The main reason the RIAA decided to attack the downloading phenomenon was that they had lost over 30% of their record sales, and they pronounced the phenomenon of downloading guilty for this market performance.

The RIAA is wrong. They have no proof of this. What really happened is that during 2001 and thereafter, the economy declined. When the economy falls, consumers cut back on discretionary purchases. Music products and restaurant patronage are two of the first to be reduced as discretionary purchases.

The RIAA doesn’t understand this phenomenon. The restaurant industry does. That is why it’s traditional in most sit-down restaurants that you don’t pay for your meal until you have finished eating it. If the food isn’t good or the service is terrible, you will never return there. Not only does the RIAA understand that their products are discretionary in their purchase potential, they don’t care. Their attitude reflects this mentality.

When the RIA started to go after individuals, the reaction of the public was hostile. The RIAA was seen as a big bully picking on a defenseless person. The RIAA had an army of high-priced lawyers to beat up on single, individual downloaders.

It was seen as a totally unfair fight. The consumers who were caught with downloaded, copyrighted material faced fines of $11,000 per song. This penalty was commented upon Senator Norm Coleman as being excessive. Senator Coleman, (R-Minnesota) headed a committee that looked into this issue.

I know of few people who were on the side of the RIAA, yet they not only didn’t care, they act arrogantly and proclaimed that there was even more to come.

They are paying the price.

I went into one of many chat rooms where downloading music was the subject. Scanning through over 1,000 posts, I found only 3 posts where the poster thought that it was stealing to download copyrighted music. The vast majority of computers were totally hostile to the RIAA.

A sample of the viewpoints offered is related below.

The public here thought that paying $15 or more for a CD that had only one hit song by the artist was exorbitant.

A few posters also mentioned the music industry stealing the original works of black rhythm and blues musicians from the 1940s and never paying them a dime for their work. So they thought that the RIAA’s actions were hypocritical.

Most thought that the most that somebody should pay for a CD was $5-$10, and no more than $1 for a single song.

Others commented that there was no way that somebody should have to pay full price for a CD if the “filler” songs weren’t heard first, and that downloading the song should be an option to tell whether it was worthy to buy.

Others complained that many songs simply were rare or just unavailable commercially to buy. Downloading a rare form was a way to get it. Here is another niche market that the music industry could exploit.

Basically, all these comments prove that nobody cheers for the bully, and the RIAA has failed to appreciate this fact and its consequences.

And here is another fallacy that the RIAA believes. It thinks that if they were successful in prevented unauthorized copying of copyrighted material, then those who did download such material would become instant buyers.

They are wrong. There are some consumers that the RIAA never had, or will have because they won’t pay for music that they didn’t otherwise want that was available. If you don’t have a market, preventing one way of getting music is NOT the way to create instant buyers. They’ll just do without.

In fact, a study from a UNC-Chapel Hill professor showed, using actual data from a file-sharing program database, showed that the downloads were not popular music that would have been bought otherwise by these users.

I’ll go further than that. People download music for different reasons. One reason is that the price is too high for them. They will not buy until the price goes down enough for them to purchase. Music aficionados as these will do without rather than pay what the RIAA wants them to pay. Suing them into bankruptcy is not a way to endear a buyer to your heart.

Others can’t find music because a live version or odd, rare cuts were never recorded.

Yet many others download music that they already bought in a format such as an 8-track, cassette or record format that they already paid for. The MP3 format is merely a different one that these users don’t believe that they have to pay twice for.

Copying music for which one had already has paid for in a different format and getting a copy in a form such as MP3 is allowed under the “fair use doctrine” that is entirely legal. It is highly likely that most copies downloaded are because of this.

CDs can be copied by a process known as “ripping” a CD. The wave file is converted into the MP3 format which translates the song into a file that is 1/11^th the original size.

But apparently, somebody has been cruising the chat boards to see what the public thinks of the RIAA and apparently they now know.

WalMart and others are offering copyrighted music for about $1 per song. Even the price of a CD has come down significantly.

The MP3 controversy has subsided somewhat. I no longer see many news articles about the RIAA and its lawsuits of individuals.

But something has apparently happened since the price of pre-recorded music CDs have come down a lot, and copyrighted music is being offered at pretty much the price that the chat-room posters were demanding.

In this day of deflationary pressures, discretionary purchases are most at risk. It look as if the RIAA finally has been listening because it appears that they are content with half a loaf instead of full loaf – especially when that’s all you can expect.

The RIAA has ignored a huge potential market where users could download a mix of various songs at say, 50 cents apiece, mix and match whatever the user wants, and then download any CD art and then make their own custom CD.

How hard or costly could it be to maintain a database of high-quality MP3s on one server and have about 10,000 songs available? It would cost virtually nothing for the music companies to maintain. Production costs for CDs would be nonexistent because they don’t have to produce them. The consumer would buy his own blank CDs and record what he downloaded and paid for.

Instead of looking to embrace new technology, capitalize on a new potential market and exploit maximum profit potential, the RIAA chose to fight new technology and cause all the bad faith and ill will it received from the public.

As far as I am concerned, the RIAA can go to Hell until they formally and publicly renounce their policy of going after individuals. They chose the wrong path in a battle against new technology that they can never win.