RIAA Spent $17.6 Million In Lawsuits… To Get $391,000 In Settlements?
from the business-as-usual dept
Last month we discussed the question of whether or not the RIAA’s legal strategy was a success or not. An RIAA supporter had claimed that it was clearly a success, since most of the people the RIAA sued chose to settle. We questioned that, pointing out that the bottom line of the major record labels was shrinking fast, and the rate of file sharing was increasing. At the same time, we pointed out that the record labels themselves had admitted that the lawsuits were “a money pit.” Ray Beckermann has done some digging and is pointing out just how big a money pit it really was. In looking through the RIAA’s financial statements, he notes over $17.6 million spent on big name law firms who were the key players in the lawsuit campaign. And all those settlements? In 2008, they brought in $391,000. The 2007 numbers were even worse. $21 million in legal fees, plus another $3.5 million for “investigative services” to bring in… $515,929 in settlement fees. 2006? $19 million in legal fees, $3.6 million in investigative services… $455,000 in settlements.
So if we’re doing some quick math, over a three year period, the RIAA spent over $64 million on this lawsuit campaign… which brought in about $1.4 million in settlement money. We’re talking about getting back about 2% of the money spent.
Wow. These lawsuits weren’t just a money pit. They were an economic disaster. And don’t buy the argument that this was the cost of “educating” people not to file share. If that were the case, then file sharing wouldn’t still keep increasing. There’s no way you can look at these numbers and not realize just how disastrous the RIAA’s legal campaign was. And yet the RIAA bosses are getting raises? Incredible. It’s been a dozen years since the RIAA had a very real opportunity to lead the recording industry into the digital era by adapting and embracing what the technology allowed. Instead, they’ve fought it the whole way, costing millions of dollars, and severely impacting the labels’ bottom lines. Can anyone explain why the labels are still supporting the current RIAA leadership when it appears that every step of the way they’ve made exactly the wrong decisions?