Monday, May 12, 2008

Filesharing failures

Recent reports have again highlighted the ineffectiveness of the RIAA file sharing lawsuit strategy. While there has been a sudden increase in letters of demand being sent to universities across the United States, up to date statistical information further supports the suggestion that peer to peer file sharing continues unaffected. By examining these reports it is possible to reflect on the cost and embarrassment of pursing such as weak and ineffective strategy.

Reports at the end of April and beginning of May suggest that there has been a significant increase in the number of notices being sent by the RIAA to universities. Wired reported a 20 fold increase that focuses on universities in the Midwest, with Indiana University receiving 80 legal notices a day rather than the same number over a period of a month.

Ars Technica recently reported that since the commencement of the lawsuit campaign a total of 5,404 letters have been sent with 2,300 electing to settle the dispute prior to the commencement of legal action. In response to the reports regarding the recent increase the RIAA stated:

We are always making an effort to more effectively and efficiently detect infringing activity on the Internet, as we are continuously looking for ways to improve our ability to find and act on incidences of theft online. Having said that, there's been no change in our procedures.

Many have criticised the lawsuit strategy as failing to have the desired impact on file sharing activity, arguing that it creates: an unjustified burden on average citizens, marginalises much of the youth perpetuating disrespect for the industry, resulting in no additional income or long term benefits for artists, and threatens the neutrality of the internet by coopting internet service providers, amongst other concerns. Indeed the most recent statistical information suggests that this strategy is a complete failure.

The 2008 Digital Music Report from the IFPI suggested that any slight increases in sales of digital music were quickly offset by a further decline in CD purchases and a continued rise in file sharing activity. Independent reports confirm this.

A NPD survey published earlier this year reported that only 42% of music acquired in the US last year was from legitimate sources, declining from 48% in 2006. Furthermore while the number of users has remained stable at around 19% there has been an increase in the number of files shared and sharing among teenagers.

Highlighting further issues with the law suit strategy, the report also indicates that 38% of albums are acquired through friends burning or ripping a home-made CD with only 19% acquired from illegal downloads.

Another NPD Survey focusing on children aged 9 to 14 shows that 49% use iTunes, 26% use LimeWire, while 16% trade music via MySpace. Two thirds reported accessing the Internet without adult supervision with 59% downloading music without assistance. Russ Crupnick, vice president and entertainment industry analyst for The NPD Group stated:

The music industry hoped that litigation and education might encourage parents to keep better tabs on their kids’ digital music activities, but the truth is many kids continue to share music via P2P.

Conducted via email with 3,376 responses from a sample representing the US population of families with children aged 2 to 14, the survey did report some increase in legitimate music sales. Twenty-nine million consumers acquired digital music via pay-to-download sites, an increase of 5 million people in the past 12 months. Nonetheless, digital sales still fail to reflect the true music consumption habits of US citizens.

What is apparent, and indeed has been for some time, is that the lawsuit strategy is simply not working. Every party involved, with the exception of a few industry lawyers, incurs a negative impact without any tangible benefit: students and their families are financially disadvantaged, society is poorer for not having open access to culture, artists continue to struggle, record labels are incurring costs, and the internet and internet service providers are increasingly under strain.

When one considers the potential for voluntary collective licensing all of these negative implications are mitigated. The introduction of a licensing scheme would enable students and their families to direct their finances to their education rather than a private industry unwilling to adapt to a new environment. Society and artists would be better off with the incentive to create high quality works, unlimited access and the freedom to explore cultures from around the world. Removing the legal system from the equation would allow for these resources to be directed to addressing other issues, force the record labels to compete, relieve pressure on internet service providers and reduce the incentives to de-neutralise the network.

However it is not just RIAA that should be embarrassed about this strategy but the United States government and those endorsing this approach in other jurisdictions . With an emphatic illustration of the failure and associated costs, neither the RIAA nor the government have the foresight or courage to make the decisions that are essential for us all. The cost is to culture, free speech and democracy.

Further Reading
Digital Music News, Universities Report Climb In RIAA Letters... (2 May 2008) <> at 5 May 2008

Wired Blog, Universities Baffled By Massive Surge In RIAA Copyright Notices (30 April 2008) <> at 3 May 2008

TechDirt, RIAA Massively Ramps Up Warning Notices To College Students Over File Sharing (May 2008) <> at 3 May 2008

The Register, Freetards fill their boots - music survey (18 April 2008) <> at 26 April 2008

The NPD Group, Consumers Acquire More Music in 2007, But Spend Less (26 February 2008) <> at 27 February 2008

The NPD Group, Kids in the U.S. Continue to Download Music Illegally (30 January 2008)
< > at 12 May 2008

Slyck, P2P Downloading Still a Top Choice for Kids (30 January 2008) <> at 5 February 2008

ZeroPaid, STUDY: 26% of Kids Still Using Limewire (1 February 2008) <> at 4 February 2008

The Age, 95% of music downloads are illegal (25 January 2008) <> at 31 January 2008

Slyck, P2P Downloads Crush iTunes/Digital Sales 20:1 (24 January 2008) <> at 31 January 2008

Digital Music News, IFPI Global Sales Data Reaffirms Sluggish Story (23 January 2008) <> at 30 January 2008

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