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ARSCLIST  December 2008

ARSCLIST December 2008

Subject:

RIAA to Abandon Mass Lawsuits

From:

Dave Nolan <[log in to unmask]>

Reply-To:

Association for Recorded Sound Discussion List <[log in to unmask]>

Date:

Fri, 19 Dec 2008 13:34:39 -0500

Content-Type:

text/plain

Parts/Attachments:

Parts/Attachments

text/plain (103 lines)

From the Wall Street Journal:

http://online.wsj.com/article/SB122966038836021137.html?
mod=rss_whats_news_technology

Music Industry to Abandon Mass Suits 

By SARAH MCBRIDE and ETHAN SMITH
After years of suing thousands of people for allegedly stealing music via 
the Internet, the recording industry is set to drop its legal assault as it 
searches for more effective ways to combat online music piracy.

The decision represents an abrupt shift of strategy for the industry, which 
has opened legal proceedings against about 35,000 people since 2003. 
Critics say the legal offensive ultimately did little to stem the tide of 
illegally downloaded music. And it created a public-relations disaster for 
the industry, whose lawsuits targeted, among others, several single 
mothers, a dead person and a 13-year-old girl.

 Instead, the Recording Industry Association of America said it plans to 
try an approach that relies on the cooperation of Internet-service 
providers. The trade group said it has hashed out preliminary agreements 
with major ISPs under which it will send an email to the provider when it 
finds a provider's customers making music available online for others to 
take.

Depending on the agreement, the ISP will either forward the note to 
customers, or alert customers that they appear to be uploading music 
illegally, and ask them to stop. If the customers continue the file-
sharing, they will get one or two more emails, perhaps accompanied by 
slower service from the provider. Finally, the ISP may cut off their access 
altogether.

The RIAA said it has agreements in principle with some ISPs, but declined 
to say which ones. But ISPs, which are increasingly cutting content deals 
of their own with entertainment companies, may have more incentive to work 
with the music labels now than in previous years.

The new approach dispenses with one of the most contentious parts of the 
lawsuit strategy, which involved filing lawsuits requiring ISPs to disclose 
the identities of file sharers. Under the new strategy, the RIAA would 
forward its emails to the ISPs without demanding to know the customers' 
identity.

Though the industry group is reserving the right to sue people who are 
particularly heavy file sharers, or who ignore repeated warnings, it 
expects its lawsuits to decline to a trickle. The group stopped filing mass 
lawsuits early this fall.

It isn't clear that the new strategy will work or how effective the 
collaboration with the ISPs will be. "There isn't any silver-bullet anti-
piracy solution," said Eric Garland, president of BigChampagne LLC, a 
piracy consulting company.

Mr. Garland said he likes the idea of a solution that works more with 
consumers. In the years since the RIAA began its mass legal action, "It has 
become abundantly clear that the carrot is far more important than the 
stick." Indeed, many in the music industry felt the lawsuits had outlived 
their usefulness.

"I'd give them credit for stopping what they've already been doing because 
it's been so destructive," said Brian Toder, who represents a Minnesota 
mother involved in a high-profile file-sharing case. But his client isn't 
off the hook. The RIAA said it plans to continue with outstanding lawsuits.

Over the summer, New York State Attorney General Andrew Cuomo began 
brokering an agreement between the recording industry and the ISPs that 
would address both sides' piracy concerns. "We wanted to end the 
litigation," said Steven Cohen, Mr. Cuomo's chief of staff. "It's not 
helpful."

As the RIAA worked to cut deals with individual ISPs, Mr. Cuomo's office 
started working on a broader plan under which major ISPs would agree to 
work to prevent illegal file-sharing.

The RIAA believes the new strategy will reach more people, which itself is 
a deterrent. "Part of the issue with infringement is for people to be aware 
that their actions are not anonymous," said Mitch Bainwol, the group's 
chairman.

Mr. Bainwol said that while he thought the litigation had been effective in 
some regards, new methods were now available to the industry. "Over the 
course of five years, the marketplace has changed," he said in an 
interview. Litigation, he said, was successful in raising the public's 
awareness that file-sharing is illegal, but now he wants to try a strategy 
he thinks could prove more successful.

The RIAA says piracy would have been even worse without the lawsuits. 
Citing data from consulting firm NPD Group Inc., the industry says the 
percentage of Internet users who download music over the Internet has 
remained fairly constant, hovering around 19% over the past few years. 
However, the volume of music files shared over the Internet has grown 
steadily.

Meanwhile, music sales continue to fall. In 2003, the industry sold 656 
million albums. In 2007, the number fell to 500 million CDs and digital 
albums, plus 844 million paid individual song downloads -- hardly enough to 
make up the decline in album sales.

—Amol Sharma contributed to this article.
Write to Sarah McBride at [log in to unmask] and Ethan Smith at 
[log in to unmask]

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