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Posts Tagged ‘Recording Industry’

Bankruptcy in The Air After RIAA Verdict

Monday, August 10th, 2009

Most people in the tech world have been buzzing over the massive judgement levied against a student for illegally downloading and sharing 30 copyrighted songs online. The student, Joel Tenenbaum of Boston University, was ordered to pay the RIAA $675,000 for the copyright infringements last week by a jury. Citing his obvious lack of funds as a university student, Tenenbaum is stating that he will have to file for bankruptcy if the judgement stands. Fortunately, however, he is deciding to pursue this by appealing to a higher court.

Copyright laws with regards to music, games, and movies have always been tricky. The problem is that on the one hand, there is no denying the fact that what Joel and so many others have done deprives the artists of rightfully earned money. He downloaded the music without paying for it and then proceeded to distribute the music to other people who didn’t pay for it. Clearly the artists did suffer financial damages due to copyright infringement. However, on the other hand, what Mr. Tenenbaum did wasn’t particularly costly to the recording industry. Let’s suppose that each song cost about $1.00 to buy new. Now, let’s also suppose that 20 people downloaded each song. At 20 people x 30 songs x $1.00 per song, you would have real damages in the ballpark of $600. Sure these are all assumptions, but unless you hand 1000s of people downloading the songs, the actual damages awarded were probably around 1000x that of the “real” (or a better word might be “perceived”) fiscal loss.

That’s where the problem comes in. Copyright laws, so far, have had a real problem striking the balance between defending the artists and producers, while at the same time imposing reasonable damages. I’m all for protecting the artists right to fiscal compensation for their work, but let’s make the system work like everything else. Current US law states that the fines permissible range from $750 (debatably reasonable) to $150,000 (holy ****) per act of copyright infringement. Just for comparison, if I walk into a store and steal a bunch of candy bars, do I have to pay the shopkeeper $500,000? Of course not. I might have to pay him a few thousand for the hassle and court costs, but certainly nothing that outrageous.

I believe file-sharing damages should be treated as though you “gave” each one of these individuals a copy of the song. So, if you make a song publicly available and 1,000 people download it, the artist should be eligible to recuperate 1,000 times the average MSRP of the song, which is typically around $1.00. So in my little example, the artist could get $1,000 plus court costs plus some nominal fees in damages. Similarly, if I gave a tune to three of my friends by letting them get the MP3 off my phone, the total suable damages would only be three dollars. This, I feel, represents a fair balance – punishing those who really do cost the artists money, while at the same time, not making it so that every instance of sharing basically bankrupts you. To put it another way, there’s malicious sharing that seriously cuts into the artists revenue and then there’s the somewhat common scenario of “hey man, I just got this cool song on my phone – if you like it, I’ll send it to you”. The first should be punished – the second, not so much.

In conclusion, let’s all work together to make the penalties more commensurate with the crime. That way we can weed out the file sharers that really hurt the industry by sharing 1000s of songs, while at the same time not bankrupting students like poor Joel Tenenbaum who’s total “cost” to the industry probably never exceeded $1,000.

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