May 03, 2003

RIAA Stupicide

The RIAA is bound and determined to commit stupicide, not matter how difficult it may be for them to do so. First they sent the instant message spam and now, they are openly discussing software that can cause great problems by establishing the RIAA as judge, jury and executioner.

I've said before that the RIAA has a right to enforce their copywrites. The law provides for remedies for proven violations. If the RIAA chooses to take individuals to court, one by one, that's fine (not bright, but they've already proven that they're not bright).

But the law does not allow them to determine what is and what is not a copyright violation. The law does not allow the RIAA to arbitrarily engage in enforcement.

Yet arbitrary, selective enforcement without the protection of due process is exactly what the RIAA is proposing with these new software packages. The RIAA may see copyright violations, but they cannot impose punishments without going through the proper legal channels - just as I cannot legally write someone a ticket for speeding.

I also want to know what the RIAA is going to do to compensate people or corporations for improper (and illegal) sanctions. One of these programs is designed to lock up the target computer for several hours, unless it is rebooted with a correspondent loss of data.

Here's a scenario to think about:

A broker at a major Wall Street brokerage firm downloads a new peer-to-peer file sharing system before IT bans access to the site. The said broker then downloads a single .mp3 file and is subjected to the RIAA freeze program, which then searches the network computers and finds the companies CEO speaking to the employees in an .mp3 file. The freeze software then locks up every network computer bringing trading at the firm to a halt as they switch over to manual backup systems.

Think it can't happen? It can. The RIAA has admitted that their sanction software can't distinguish between legal and illegal .mp3s. When I worked for a large Wall Street brokerage the CEO would frequently send messages to the employees across the company network. All it would take was one breach and whole system would tank, as several viruses proved to us.

Will the RIAA reimburse the company for the loss of revenue from such a crash? Will the RIAA reimburse each affected client? I'm guessing not as to compensate a large corporation for one improper enforcement action could become almost enough to bankrupt the RIAA.

So to compensate, the RIAA would have to increase the royalties it collects on each and every CD sale. This in turn would raise the price of CDs at a time when the market is obviously demanding that the price drop. Piracy is a problem simply because the cost of a new CD is simply too high.

When we examine our basic microeconomics, when the price of a product goes up, demand goes down. CDs were already priced above the intersection of the two curves. Each price increase from here will actually reduce the amount of money flowing into the RIAA coffers as piracy increases.

I have already stopped buying new CDs because of the cost. $15.99 for a CD that has two, maybe three songs that I like is just way too much. If I really want the CD, I wait to find it in a pawnshop or at a used CD store. I don't really care for much of the new music out there so buying CDs this way really doesn't bother me.

I know several other people who buy their music the same way. Piracy isn't the true threat to the RIAA, it is people like me. It's been at least three, maybe as many as five, years since I bought a CD where any of the money I spent flowed to the RIAA.

The RIAA thinks that it is trying to develop a relationship with me. I have not once seen the RIAA do anything other than engage in threatening bluster. A relationship built on a threat is not a relationship, it is the equivalent of the protection schemes of the 1930's ("Give us money or something bad will happen to you.").

I also find it disturbing that the RIAA has found someone in Congress who is trying to introduce a bill to limit the liability of RIAA companies if they violate the law and people's rights in an improper attempt to enforce their copyrights. Just as the law proscribes sanctions for copyright violations, it also dictates penalties for hacking and destruction of information resources. It holds true even in cyberspace: two wrongs don't make a right.

The RIAA needs to get a grasp on reality. The problems of the music industry today come from poor business models that have been used since the introduction of the CD. DVDs with more information now sell for less than CDs. If I go to Wal-Mart, I can buy a new release DVD for about $15, maybe $20 if it is really, really highly anticipated. By contrast, a CD that was released a few years ago still costs about $15.

Someone needs to tell the music industry that they no longer have monopoly pricing power. A few years ago, I wanted to buy a piece of music. I bought the DVD instead of the CD because it was cheaper - and I got to see the concert along with getting the music.

If the RIAA wants to have a relationship with me, they had better start to understand the depth of my relationship with my wallet size portraits of Mr. Jackson.

Posted by Chris at May 3, 2003 09:05 PM | TrackBack | Linked by:
Industry Pundit linked with Re-Tooling the RIAA (Part 2)
Industry Pundit linked with Re-Tooling the RIAA (Part 2)

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