Our Chairman and CEO Mitch Bainwol explains why "Google has reason to rethink IP" as posted on The Daily Caller.
Sometimes copyright critics so reflexively fall over themselves to criticize that they laughably leave the facts behind. So it was with this bemusing blog post by Public Knowledge that claimed, in commenting about a recent “State of Net” panel about the role of Internet Service Providers (ISP) and copyright theft policies:
Yesterday, the MPAA and RIAA made a giant political misstep by refusing to participate in a debate about three strikes. In doing so, they exposed the public and a number of US policy makers to policy that would strip Internet subscribers of their constitutional due process rights….
Noticeably missing on the panel were the US associations that represent large content holders, like MPAA and RIAA, or even their DC coalition groups like Copyright Alliance or Arts+Labs. It’s not like their representatives were busy, many were in the audience listening. No, they are actively trying to keep a low public profile on three strikes arrangements in the US while they work on back-room deals.
Sounds damning right? Only problem is that the conference organizers had approached us and we suggested a representative from IFPI, Shira Perlmutter, our sister organization that represents the major music labels throughout the world. Because, well, the conference was about anti-theft policies and ISPs throughout the world. That hardly seems like “refusing to participate” or actively trying to keep a low profile” (never mind that the RIAA recently participated in a recent Broadband Breakfast panel on these very issues. You can watch a video of one of the organization’s senior executives “keeping a low profile” here.
Throw in the fact that the RIAA has not called for a “three strikes and you’re out” approach. What we have encouraged -- as a sensible alternative to litigation -- are graduated response policies that call generally for escalating sanctions against offenders caught repeatedly engaging in illegal file sharing, an approach already contemplated by existing law (DMCA) and the ISP terms of services already agreed to by the user.
We’re all for a healthy debate about the best way to protect the jobs of the millions of American workers who depend on intellectual property businesses to make their living, but we owe to those citizens to check our facts.
It’s not often that we can invoke the Federal Reserve Chairman to help make a point about music and copyrights, but a recent New York Times op-ed by Alan Blinder, former Vice Chairman of the Federal Reserve, raised an interesting and noteworthy parallel to one of the challenges we face.
In making the case for a second term for the now-confirmed Mr. Bernanke, Blinder argued:
This rapid improvement [in the economy] came faster than almost anyone expected. The plain truth is that,as bad as the recession was, it turned out to be less horrific than expected, and Ben Bernanke is one of the reasons. Unfortunately, “it could have been much worse” doesn’t buy you much in politics.
It’s an interesting point, and it reminded me of the definitional challenge we often confront – how best to explain that one’s efforts couldn’t really solve the problem, but that they made a serious impact on a problem that “could have been much worse”?
This question was again prompted by commentary from the Author’s Guild, which recently explained in its blog that it chose to settle its book publishing lawsuit against Google, in part, because the aggressive anti-piracy efforts of the music industry over the past decade “didn’t work.” But the question isn’t whether our antipiracy efforts “worked,” because everyone acknowledges that there is no magic bullet solution to piracy. The better question is “Did it help?” And the answer to that one is (to borrow a quote from Sarah Palin), “you betcha.”
Let me explain why.
First, let’s start with the obvious point that is sometimes lost in the public conversation: the most effective and most important anti-piracy strategy is a thriving legal marketplace. Every legal and educational strategy deployed is complementary. Innovative business models and technology partnerships are the priority of the music business. It all starts there. And the music business, to a greater extent than most other media and entertainment industries, has embraced its digital future and now derives some 40 percent of revenues from digital formats. On the question of efficacy of legal strategies, think about it – had the music industry sat idly by and refused to enforce its rights against the sites that profited from facilitating theft, would the legal music marketplace be better off? Would the interests of artists, songwriters, labels and others be better served if illegal sites like Audiogalaxy, Aimster, Bearshare, Kazaa, Grokster, Morpheus, and countless others were still thriving? Or if a fog of misunderstanding about the relevant copyright laws persisted amongst consumers and fans kept illegally downloading with little awareness that they were breaking the law or that there were great legal alternatives available?
Simply because a strategy did not “solve” a hemorrhaging crisis doesn’t mean it was not necessary or appropriate at the relevant moment, and ultimately helpful for the long term. Prior to the lawsuits, only 35 percent of people knew filesharing was illegal, but after the initiation of the end-user legal campaign, that number quickly rocketed to more than 70 percent. In 2003 and 2004, we saw double digit growth in the numbers of people using peer-to-peer to download music illegally. If awareness of the copyright laws and an appreciation of the consequences of getting caught for breaking the law had not had an effect, p2p growth rates would likely have continued unabated, and would have seriously undermined the potential for a legal digital marketplace.
Instead, according to the market research firm NPD, between 2006 and 2009, the percent of Internet users downloading music illegally declined from 19 to 14 percent, while the percentage engaging in legal music downloading grew from 16 to 20 percent. Where there was virtually no legal digital market in 2003, today the legal digital market approaches $3 billion annually.
Illegal file sharing rates have now stabilized. The share of users who download legally has surpassed the share of users who download illegally. The “lines” have crossed and that’s an important marker in the development of a legal marketplace. Because that’s what this is ultimately all about – helping provide the framework for a dynamic, exciting, content-rich marketplace that is rewarding for both fans as well as the music community. The good news – it’s here (http://www.riaa.com/toolsforparents.php?content_selector=legal_music_sites)
Absent determined action by the music industry, the problem could have been far worse – the music business’ efforts to innovate and license new models, educate fans about the laws and enforce rights made a difference. We’re realistic and by no means declaring victory. There continues to be job-and-culture-killing levels of illegal downloading that require a variety of approaches and the help of partners like Internet Service Providers (ISPs). But, clearly, the steps undertaken helped.
So, to our friends at the Author’s Guild: taking strong, aggressive legal action is important to protecting rights. Why else would you have taken the step of suing Google? And how else would you have scored the settlement that you believe will now both protect and reward authors?
And to former Federal Reserve Vice Chairman Alan Blinder – thanks for helping us make this point.
Jonathan Lamy, Senior Vice President, Communications, RIAA
We recently filed our response to the court’s remittitur in the Jammie Thomas-Rasset case in Minnesota. You can read our brief here, but here are some thoughts about the case and why we are at this juncture, along with some highlights from the brief:
We have done everything within our power to resolve this case on fair terms. The defendant is someone who knowingly distributed hundreds upon hundreds of unauthorized songs without any regard for those who created them, likely bent on the brazen assumption that she’d never get caught. During both trials she lied about her actions while under oath. Ironically, Ms. Thomas-Rasset claimed during the trials what an ordeal this has been. Meanwhile, every move she and her counsel have made has been with the intent to prolong this case while refusing every reasonable settlement offer. Unfortunately, despite two jury decisions against her and a federal court’s affirmation of her liability and irresponsible behavior, Ms. Thomas-Rasset even refused a settlement offer that was less than half of the judge's remitted amount and that would have been donated to a charity for struggling musicians. In fact, Ms. Thomas-Rasset has asserted that she never intends to pay a penny to settle the case. With the benefit of free counsel, she now seeks to gut the laws that she has repeatedly and blatantly violated.
American taxpayers should not have to bankroll a publicity campaign that the defendant and her counsel apparently seek. But if another trial is what is needed to close the book on this case once and for all, then we are left with no choice but to reject the Court's remittitur and proceed to a new trial on damages.
NOTABLE QUOTES FROM FILING:
“In its January 22, 2010 decision, the Court recognized the scope and gravity of the conduct engaged in by Defendant Jammie Thomas-Rasset by specifically noting that she willfully infringed Plaintiffs’ sound recordings, was aware that what she was doing was illegal, lied to the jury, and never accepted responsibility for her actions…”
“The seriousness of Thomas-Rasset’s conduct and its impact on Plaintiffs was not lost on the twenty-four individual members of the two juries who rendered verdicts in this matter. They easily (and quickly) found that Thomas-Rasset had willfully infringed Plaintiffs’ copyrights…”
“Plaintiffs have endeavored to pursue this case in a very reasonable manner. Thomas-Rasset could have settled this case for a very modest amount at its inception, but she instead chose to stonewall Plaintiffs and lie to two juries. Even as recently as last week, when she could still have settled this case for a reasonable sum, she again announced that she will not pay any amount to settle the case. Thomas-Rasset’s position is even more remarkable given that the Court’s recent order does not disturb the liability and willfulness findings of the second jury…”
“…Her conduct throughout this litigation has been patently unreasonable, and it demeans and devalues the hard-work and creativity of those responsible for the music that she felt entitled to steal and give away to countless others…”
“Unfortunately, Plaintiffs find it impossible to accept a remittitur that could be read to set a new standard for statutory damages – essentially capping those damages at three times the minimum statutory amount of $750 (or $2,250) for any ‘noncommercial individuals who illegally download and upload music.’ This far-reaching determination is contrary to the law and creates a statutory scheme that Congress did not intend or enact…”
“Neither the Copyright Act nor any case law distinguishes – as this Court did – between ‘commercial’ and ‘non-commercial’ infringers for statutory damages purposes. Moreover, neither the Copyright Act nor any case law contains any authority for capping damages at three times minimum damages in particular cases...”
“It is not for the courts to fashion a limit on damages for any particular type of infringer or any particular type of infringement. That job belongs exclusively to Congress…”
“When a court remits a jury award, it must have a basis for doing so and it must not substitute its judgment for that of the jury. Otherwise, the constitutional right to a jury trial would be, at best, illusory. Creating, as this Court did, a new and much smaller range of statutory damages and calling it ‘the maximum amount that a reasonable jury could award’ is no different than simply refusing to empanel a jury.”
Cara Duckworth, Vice President, Communications, RIAA
In sign of a memorable year to come in music, this week’s annual Grammy awards broadcast saw its highest TV audience ratings in six years. That’s right -- 25.8 million fans turned to their tube on Sunday to root for their favorite nominees, watch live performances and surprising song renditions, experience artist tributes and much more!
So just how many fans are 25.8 million fans? According to The New York Times, about 1/3 more fans than watched the Golden Globes (17 million), almost double the Emmys’ audience (13.5 million), and more fans than watched any NBC NFL Sunday night prime-time football game this season. And to keep the comparison in our own backyard, this year's Grammy ratings are 35% higher than the ’09 awards show. That’s 6.8 million more music fans year-over that were able to experience a connection to the musicians and music they love without having to leave home or spend any additional money. For music companies actively looking for opportunities to expand artist to fan interface, this year's improved Grammy viewership is a positive sign. Perhaps even a harbinger of good things to come for online sites like the MySpace Musics or Vevos of the web designed to fulfill fans’ appetite for their favorite acts and music whenever they want it.
What’s more is that we’re already seeing early reports citing the Grammy’s immediate impact on music sales. This week Billboard reported that digital music purchases at iTunes and Amazon bumped from about 8,000 units pre-show to almost 25,000 during/post. That’s three times the standard sales rate!
Any way you slice it, these factors leave us on a great note from Grammy’s “good, good night.” (All due credit to The Black Eyed Peas’ inspiring “I Gotta Feeling” live Grammy performance -- been in my mind ever since!)
Liz Kennedy, Deputy Director, Communications, RIAA
We recently came across this insightful op-ed in the Huffington Post entitled "The Generation That Killed Rock 'n Roll" by author/singer-songwriter Nathan Harden. The title is what initially caught our eye, but the author’s arguments and conclusion is what make it a compelling read. For example, take this excerpt:
Today, fewer artists are being offered record deals; and new artists are being set aside if they fail to achieve quick success. As a result, the music of an entire generation is being muffled. Many of today's would-be Dylans and Springsteens remain lost in obscurity. We will never hear their songs.
We encourage folks to check out the entire piece and consider what they're missing out on.