RIAA Told To Hand Over Data On Cost Per Download

from the constitutionality-questions dept

Earlier this year, a court agreed to examine whether or not the fines the RIAA is asking for in its lawsuits against people accused of file sharing is constitutional (that whole “cruel and unusual” bit). The RIAA, in response, has fought hard to keep from revealing any information about how much a download really costs, but a judge isn’t having any of that and has ordered the RIAA in the UMG v. Lindor case to turn over the data.

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Comments on “RIAA Told To Hand Over Data On Cost Per Download”

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Hulser says:

A penny charged is a penny lost?

What a shame that a judge making a common sense decision is news. If you (UMG) are claiming a certain amount in damages, doesn’t it just make sense that you’d have to justify the amount rather than pull a number out of…uh…thin air. Discounting the issue of whether it’s actually a penny-for-penny loss, what better way to determine how much you have “lost” per track than to disclose how much you charge per track?

Anonymous Coward says:

As much as I disagree with the large amt of the original ruling, I don’t think basing it on how much the music sells for wholesale makes sense either. It would make sense if she was sued for downloading music but she wasn’t. She was sued for uploading music (sharing) music. The only fair way would be for the amt to be based on how many other people downloaded the music from her but the RIAA has not even been able to prove that anybody has downloaded her music.

Anonymous Coward says:

Re: Re:

“The only fair way would be for the amt to be based on how many other people downloaded the music from her but the RIAA has not even been able to prove that anybody has downloaded her music.”

Actually the only fair way would be based on how many people would have bought the music but did not because they downloaded it from her.

You could even extend that to say the only really fair way would be the above and then to subtract all those music fans that downloaded from her for free and then went out and bought related music/merchandise directly as a result of downloading which they would not have done otherwise.

But then let’s be honest that’s just impossible to gauge accurately.

Chronno S. Trigger says:

The reason

If I remember my business economics class correctly (and I think I do), there is absolutely no cost per download. The Internet connection, creation of the song, creation of the files, the servers are all considered fixed cost and do not count towards the cost per download. The fixed costs and per download cost goes towards the price but there is no number that can be set as the per download cost.

Anonymous Coward says:

statutory damages is the reason

This isn’t about the record folks proving their damages, its about showing that the statutory minimum of $750.00 per infringement is so far out of whack from the actual damages that the statute is unconstitutional as applied to these circumstances (essentially – it’s a little more involved than that, but I’ll let a constitutional law expert chime in if they so choose).

However, the statutory provision was put in place for the very reason that its difficult, if not impossible, for a copyright holder to prove with the requisite certainty the amount of their actual damages when their copyright is infringed. Because the statute wasn’t drafted when we had digital technology, this is another area where the law hasn’t kept up with the technology and probably needs to be changed.

Common Sense? says:

why is this so complicated?

I hate to make this sound too simplified, but wouldn’t the cost per download be equal to the market value of the song (~99 cents per song on iTunes) plus an added percentage for “damages” and legal fees, say 50%?

So if the RIAA could prove that “Pirateman69” shared the latest Britney Spears song on Kazaa, and it was downloaded 5,000 times, it should sue for $7500.

I am no lawyer, but common sense is common sense.

Anonymous Coward says:

Common Sense?

Here is some common sense.Take it all away from the studios and the RIAA. Change the law so the govt. actually enforces and punishes the people that are violating copyright law.

Of course, maybe they should start enforcing immigration law first. Or the gun laws we already have on the books.

Does our govt. do anything it is supposed to do?

matt says:

appeals - yay!

people obviously don’t realize how much this opens up the appeals process for every single case that RIAA has won and been awarded damages.

If its from 750 -> 99c, then they can be appealed/sued for all but treble damages being awarded. Expect some fuzzy math and further delays/go arounds before these numbers get realized, but even if its 10$ they are going to lose well, whats 10 out of 750? they would be required to give up 87 percent of the money they have made.

Oh, and it gets better. All those companies who have music contracts with the RIAA now will have a basis to take into consideration now that they will know how much the label is pocketing, and give people an insight into how much things truly cost apple, emi, etc.

Anonymous Coward says:

Trying to profit from piracy

It seems to me that UMG is using this strategy as a source of income, instead of just trying to recoup damages.

This is going to be my new job:

Step 1 – I leave a dollar bill out on my window sill. Of course, somebody will inevitably walk by and take the dollar. I catch up with that person, then take them to court and sue them for $750.

Step 2 – Repeat.

Step 3 – Profit.

ClosedEyesSeeing says:

Re: Trying to profit from piracy

Better model!

Step 1 – I leave a dollar bill out on my window sill. Of course, somebody will inevitably walk by and take the dollar. I catch up with that person, then take them to court and sue them for $750.

Step 2 – Repeat step 1 750 times (since I have 750 dollars now)

Step 3 – Retire. Rinse and/or repeat.

chris (profile) says:

Re: Trying to profit from piracy

Step 1 – I leave a dollar bill out on my window sill. Of course, somebody will inevitably walk by and take the dollar. I catch up with that person, then take them to court and sue them for $750.

no, you would have to sell the dollars, and watch for people to make lossy digital copies of the dollars, and then give those digital copies of dollars away for free.

the problem with all of this is that you still have your original dollar and can continue to use it as you see fit.

the problem for the labels disclosing their costs is that we all know it’s less than a dollar. my guess is that it’s something like 70 cents, meaning that apple makes ~30 cents to cover it’s costs. soon the public will see just how greedy the labels really are.

Shun says:

General Damages?

The courts are really turning the tables on the RIAA, in this case. They seem to be siding with the “prove you suffered these damages” crowd. Ironically, this has been the position of big business. When corporations get sued, they always tell a story like, “There shouldn’t be any general damages, because the plaintiff suffered no pain and suffering.”

Now, the RIAA is claiming “hardship” or “pain and suffering”. How else can they justify the huge damages awards? Statute? Punitive? The judge, in this case, is probably itching to overturn that statute on constitutional grounds.

Making the federal government the enforcer of last resort will not solve the problem. The feds are not interested in small fry like…Lindor. They only go after big targets, because that gets them the headlines, which they can present to Congress so that they get more funding for next year for bigger busts, etc.

Also, the feds cannot touch non-U.S. sources. The problem is that the MPAA/RIAA are trying to use the courts and the feds to protect their business model. They are a bunch of ox-cart makers. Someone should introduce them to a steam engine, preferably head first.

Joseph Beck says:

Read And Understand Before Posting

#8, 10, and 11, please go back and read comment #4.

The penalty is not for downloading one copy of the song. The penalty is for uploading the song – for letting other people have the song for free. For making it available on a p2p network so that other people can download it from her computer. Get it?

How many people took a copy of the song for free? How many people came to her computer and downloaded a copy to their computer? Nobody knows. You would think the record company would have to prove the amount of damages. They would have to prove that x number of people downloaded the song from her computer, multiplied by $1 per song, equals $x lost through illegally sharing the song.

However the law sometimes provides for statutory damages. Instead of having to prove the actual amount of damages, the record company can just claim the statutory damage amount, which for this offense has been set at $750+ per song.

TheDock22 says:

Re: Read And Understand Before Posting

The penalty is not for downloading one copy of the song. The penalty is for uploading the song – for letting other people have the song for free.

I agree, the $750 for allowing other people to download the song, times how many songs she had on her computer at the time doesn’t seem completely outrageous to me. Let’s say you cap off the song at $1 per DOWNLOAD of that song. Well you might makes out well, let’s say that song was only downloaded 200 times then you would owe $200. But let’s say a couple thousand people downloaded that song, then you are in a bit more trouble.

I do think the settlement amount is kind of ridiculous, especially with the non-tech savvy jury they had (jury of peers indeed). But, in the end, she could have done a lot worse. Plus there is nothing stopping her from suing everybody who downloaded to song from her (theft of electronic data) because her claim is she didn’t know the songs were available for other people to download. Ignorance to the law is no excuse as has been proven time and time again.

Anonymous Coward says:

Re: Re: Read And Understand Before Posting

You must have been stupid enough to use the p2p program
From the kazaa licence agreement

“4.4 My Shared Folder. By saving a file in My Shared Folder, you understand that it will be available for any other user of Kazaa and compatible programs. These users may find your files and subsequently download them from you. By doing so your Internet connection is being used.”

SailorRipley says:

Re: Re: Read And Understand Before Posting

Ignorance of the used technology is no excuse either…

I have played with p2p programs, it takes some time before 200, let a lone a couple of thousand, people have downloaded it (completely). That’s not even taking into account the fact that for most if not all songs, there will be plenty of other people offering the same song.

And just because somebody downloads a song, doesn’t mean they would all have bought it if it wasn’t available for free

DJMiner (user link) says:

What is new

The RIAA is trying to do it to everyone like the labels who make up the RIAA do it to the artist. If the fines they got went to the artist it would not be such a big deal for me. Just remember that the RIAA is the labels so don’t get mad at the RIAA take your anger out on the labels.
It looks like Apple can get a profit and pay the artist, labels and all at $.99 a track so that is the fair market value people will pay it and someone will sell it. Lets tack on 15% for the cost of taking it to court and cap damages at $1.14 a song.

Anonymous Coward says:

Downloaders should not be punished. they are not performing copyright infrigment.

however. the uploaders are, and if they have the permit or whatever to upload it, then no harm is being done.

if you upload copyrighted material and do not have the permission to distribute such material, you should be the one getting fined. not the person downloading it.

just my opinion on the matter

Bill says:

“Magistrate Judge Robert M. Levy has partially granted the defendant’s motion to compel discovery into the RIAA’s expenses-per-download, which the RIAA had opposed, giving the record companies two weeks to submit a further response…”

From the EFF article it appears to me that the RIAA isn’t being forced to “turn over the data”. In July, when Lindor requested hard data the RIAA lawyers objected but failed to clarify their objection. Since it appears that their objection is baseless, the judge is demanding a response to justify the objection. If the RIAA fails to offer a reasonable response, THEN the judge will demand the figures. Correct me if I’m wrong, but that’s all it look looks like to me.

Gregory says:

online piracy will inevitably fail

The sad legacy of p2p filesharing of stolen entertainment content will be internet tollgates at the ISp’s, top-heavy legislation and a drenching of advertising and law enforcement on what was first imagined to be a free and cool shared network. The law is not unclear and moral “justification” to steal is such Robin Hood bullshit. Obey the law or change it properly. A crime wave will always be met with government regulation and permanent resistance by law enforcement in any organized society. Read up on how France is kicking online pirates off their network for good. Thanks, freeloaders. Assholes.

Just Me says:

# 30

“online piracy will inevitably fail”
I totally disagree. Given the way in which this technology (and the internet) work I think now that it’s here and there are so many people using P2P I don think it’s going anywhere.

Law makers will continue to try and pass laws banning it (for now), and the industries will continue to try and recoup “damages” but short of shutting down the internet on the whole there isn’t any way to stop it.
With all of th massive home internet connections how hard do you think it would be for someone to write an app that uses some other protocol.
FTP has been around long before Kazaa or BitTorrent, but it servers the same purpose – to share digital content.
Now FTP may not be ideal for P2P hording, but at this point the floodgates are open and *nothing* will stop file sharing anymore.

…But, I could be wrong.

Gregory says:

online piracy will fail

“…But, I could be wrong.”

Alas, yes. I’m afraid you are. Although the network acts as a spider web and once inside, we grow harder to trace, the ISP’s all function at the pleasure and under the regulations set up by the feds, and the on ramps and off ramps are pathetically easy to monitor for copyrighted material. That’s how the French are able to manifest their plan. It just isn’t done as yet, until the French this week. If illegal activity keeps up on the net—and there is little indication that intelligence and morality is going to trump entitlement and greed anytime soon—the next step is one we’ve long feared. Every bit and byte we send and receive will be snooped because “probable cause” is slowly going over to the side of law enforcement. The courts have been extremely fair and extremely reluctant to do this. The RIAA spent millions and millions for years educating instead of enforcing. But rampant theft is driving this issue now.

The bigger issue here is petulant and gluttonous stupidity in the face of clearly defined and long enforced copyright regulation. Anyone who thinks we will avoid increasingly repressive and inevitably successful law enforcement in the face of a systematic and unprecedented looting of an entire media industry…..is deluding themselves.

Read up what the French are doing. It pisses me off but downloading is freeloading and for the freedoms we will certainly lose, you’ve no one to blame but yourself.

Just Me says:

"online piracy will fail"

I still don’t think so. The French are blocking P2P network specifically. You *cannot* tell from a packet whether or not the payload is “copyright infringing” – there is no flag in the header that will give this away – it’s just data.
What they *can* do is block certain protocols – i.e. BitTorrent. My point is that while they may block these protocols (and impair legitimate use of this technology and hamper innovation in the process)they cannot block ALL protocols.
People have and will adapt. A new client will be written that uses some other packet type to send the data and people will continue to share.

Gregory says:

“The French are blocking P2P network specifically. You *cannot* tell from a packet whether or not the payload is “copyright infringing” – there is no flag in the header that will give this away – it’s just data.”

No. I believe you have this wrong. They’ve described their intent is to use matching software and seek code matches against a copyright database. Google does something similar to this instantly in every search. The French don’t plan to block anything at all, and not p2p. They simply intend to seek matches from streaming data at the entry and exit points of every ISP. This is possible because the ISP’s must operate under government agency auspices to be licenced. When a match occurs, the file will go through but a warning will be sent. Three warnings and you are out. You lose your connection to the network.

Encrypted data won’t be scannable/matchable and so a rescindable license to send encryption is inevitably next. And on and on and on. My point is not whether the network can be policed or not, although clearly I believe it can. My point is that the wild west was tamed and this new frontier will be tamed, regrettably too, as long as latter day Jesse Jameses keep stealing everything they can get their hands on. A fully legal industry is being looted. My point is, civilized government has little choice, and we are rapidly losing the freedom and anonymity we love because truly moronic thieves who bray they are above the law won’t stop abusing it until their means is taken away.

Anonymo says:

Re: Re:

And what are they going to do with encrypted packets? Germans figured out they can’t decrypt Skype streams without asking for “Backdoor”.
Don’t kid yourself. People are smart. And if something is desirable and popular, there will be a way to get it.
Just to make my point, look at all the digital protection schemes developed and cracked in last 10 years. Name me one that withstood the collective effort. 😉

Keepn It Real says:

Re: Re:

I just have to say.. you got to be kiddn me

A fully legal industry is being looted.

this industry steals more from the artists than anyone could do on the p2p network. they are all about control and the money for the executives pockets. instead of realizing the endless possibilities they are fighting it and everyone they can reach. sad sad state

Gregory says:

True enough, Anonymo. People are smart and people have always stolen. We pay more for clothing now because of sewn in antitheft devices. Department stores have cameras, scanners, armed guards at all the doors and all of this scrutiny and cost comes back to the consumer. Someone will always break the system and the system will rise again. But that’s my point.

We had a chance to do this right. We could have just stopped buying music and delivered a message that we don’t want it at that price. Capitalist markets respond and there is ample precedent that the prices would have indeed, fallen to where purchasing began again. But we didn’t do that.

Instead, everybody hogged in on a “steal whatever you want” free for all when technology supported it and HILARIOUSLY referred to this as a “new market model to which the industry must adjust.”


The net result? The industry has no reason to come down in price, that’s one. No industry responds to theft that way. Law enforcement is ratcheted up, that’s two. And legislation will compel more and more complicated enforcement schemes until the network resembles an armed camp and the cost of security alone justifies the STILL high price for music. People are just as stupid as you think they are smart.

Hell, given the legal chance folks didn’t even support Prince and RadioHead and others. If supermarkets were being vandalized this way and the farmers weren’t getting paid, the feds would step in there, too. And that’s what’s happening. And eventually, for 98% of the music buying public, they’ll go back to paying because the punishments will continue up until it is not worth the risk as in any legal model and encrypted filesharing will become the provenance of only high tech foolhardy risk taking outlaws.

Just like any other crime. We asked for it. We’re gonna get it. And that’s the big shame, a shame properly placed on everyone who steals music and ruins the freedom of our network.

It’s not that complicated.

Gregory says:

“A fully legal industry is being looted. …..this industry steals more from the artists than anyone could do on the p2p network.”

You know that’s not true and that’s why were losing this to the court system. Bear in mind, Keepn, I hold some of these royalty rights and I’m down by 40-45K a year since 2002. Nobody buys anymore and so no royalties are due anymore. I’ve got a mortgage and a kid in college and copyright infringement is killing me. The funny thing is, the so-called “fans” are giving us a far worse fucking than the industry EVER did. Think about THAT for a moment.

YES, the industry cuts contracts that favor them. You can sign it or not, that’s the deal. boo hoo. ALL industry tries to do that. Don’t YOU try to do the best YOU can, too?

My point is that we all entered into those deals knowingly and willingly, just the same way you once bought the music, but now you claim you were being cheated all along and you try to justify stealing it now. These arguments have never stood up in a court because they are specious. The courts see legal binding contracts entered willingly. The courts see my product for sale being stolen instead. And they see your kind of self-deluding moralism to try to defend a criminal act that is very clearly defined by law. THAT’s what the courts see. THAT’s why the RIAA keeps moving ahead. Legal counts for a lot here. And there ARE no endless possibilities at the moment, sir. It’s YOU who are kidding yourself. FANS didn’t even pay RADIOHEAD when they COULD. WHO ARE YOU KIDDING??

At the end of the day, Keepn It Real, there is no reason not to pay for the music or books or movies you take. None. REAL music fans have always put their money where their mouth is. The rest of you are stealing it.

Matthew says:

Re: Re:

Ah, so you _are_ a shill.

When Napster first started, I was exposed to more music and content and I rushed out to buy the good stuff. That is the problem; to me, there is nothing good enough. I refuse to buy a CD that was one decent song on it. I refuse to pay a dollar a track. I don’t use any p2p stuff anymore either, but the DMCA has been abused so severely that I will never pay for music again. You can all go out and get real jobs.

Radiohead averaged $8/album from American audiences and that was more than most. How many people downloaded the tracks for free, will fall in love with it and buy the CD when it is available? They made over $5million and didn’t have to produce a thing but bandwidth — which is finite, but inexpensive comparatively. Don’t tell me there isn’t a market out there.

Ray Beckerman (user link) says:

The "actual damages" = the lost profits

The actual damages would be the lost profits. The lost profits would be the revenue (~70 cents) less the expenses for each downloaded song (guessing 30 cents), or 40 cents per song.

So $750 would be 1875 times the actual damages.

And $9250 (the amount awarded in the Jammie Thomas case) would be 23,125 times the actual damages.

FriendOfMusic says:

Where is the confusion?

For years now FANS have taken entertainment product they know perfectly well is for sale, and then create complicated excuses and justifications for not paying for it. It seems to me if you like it and the price seems okay, just buy it. If not, don’t buy it. Is there a credible argument that an American industry has no right to price their product as they see fit and just let the market decide? Where is the confusion? When did stealing become okay?

Is it just me?

Gregory says:

Back to Matthew

Matthew said: Don’t tell me there isn’t a market out there.

I don’t have to, there isn’t, the facts speak for themselves. Prince tried and was roundly shafted. He actually believed the “fans” would support him directly if he cut the industry out of the middle but instead they ransacked everything he offered online for sale for almost 7 years until he realized this new ethics-free climate we are in. Google his activities now. He’s back with the RIAA again. It’s one thing for technology to change the distribution model; quite another to facilitate larceny.

And you’ve badly misrepresented RADIOHEADS return on investment. That band and their management are trying to put a positive spin on a humbling disaster, so bad that they had to sign a conventional label agreement anyway to try to recoup their losses. Radiohead worked their ass off for well over 22 months and created a pretty damn good album and Radiohead was fucked by an average of 80% of all downloaders. Yes, the cream of the American market paid between $6-$8, that’s true. But for every legal download of IN RAINBOWS, there were 2 illegal p2p downloads. The illegals paid nothing, and only a little over a third of the legals paid ANYTHING at all. That’s over an 80% freeloader rate. According to TECH DIGEST and other industry sites, “Radiohead took home an average of $2.26 for a copy of the album.” After management and publicist fees, then the balance split off for taxes and then what’s left divided up among the five band members, one of the best bands in the world was paid for two years work at about the same rate as a person at the front desk who answers a phone. There IS no “market”, Matthew, and freeloaders are not “customers.” And only acts who have first benefited from industry publicity and million dollar support campaigns can earn anything by touring. You don’t appear to know this business at all.

The bigger point is this. Over the years an expensive infrastructure of recording facilities and touring equipment has been assembled, producers, A&R men, musicians, arrangers, conductors, public relations and marketing folks, sound engineers, lighting personnel, graphics, you name it. Very few bands ever earn back the money the industry invests in them and everybody has a right to be paid. The product is FOR SALE, Matthew.

Filesharing is a new form of brick to be thrown through a storefront window so it can be looted, and the best minds in business today cannot figure out a way to make content creation pay within a climate of theft. If you have a workable idea about this “market’ you indicate Matthew, let us hear it. Perhaps more to the point of Radiohead, they were only able to even try this after the industry invested millions in them for well over a decade making them wealthy, international superstars. And fans still embarrassed them. To many of us, what Radiohead tried to do after accepting the industry benefits for years and years reeks of hypocrisy and they surely got what they deserved.

FriendofMusic says:

It's all just so sad

No longer is there a return on investment in recorded music. The damage being done to musicians and their families and the new music that is no longer being funded is going to come back to haunt us. In history, this will be viewed as a period of ugly unlawfulness fueled by greed in response to a lawful business viewed by many as greedy. It’s a sad commentary about how far our morality has fallen. People used to have honor. Our culture once embraced ethics. Now we just steal because we can and we don’t care who we hurt. The whole thing just makes me heartsick.

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