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RIAA Defends Spending $17M to Collect $391,000

RIAA Defends Spending $17M to Collect $391,000

Say that tax returns draw a conclusion of its sue-em-all strategy that is “inaccurate and highly misleading,” and that its primary intent – fostering a respect for the rights of artists and convincing people to acquire music legally – has been largely successful.

A few weeks ago it was revealed that the RIAA has been spending tens of millions of dollars annually to enforce its sue-em-all strategy of targeting individual file-sharers with fines recouping as little as 2% of its overall expenses.

If spending $21.6M to recoup $455,000 in 2006 wasn’t enough, it spent $24.5M to recoup $515,929 in 2007, and $17.5 to recoup $391,000 in 2008. So all in all, over the course of three years it managed to blow more than $63.6M to recoup almost $1.4M. And this is just the years for which Jon over at P2Pnet managed to dig up tax returns for. Heaven knows what they spend from 1999 to 2006 in the heydays of P2P.

After taking a drubbing in the public eye for spending so much money to arguably do so little (music sales are still in decline and P2P is still rampant), the RIAA is now defending what it spent.

Jonathan Lamy, senior vice president for communications for the RIAA, says the numbers are misleading, that the legal fees cover a wide variety of costs like Digital Millennium Copyright Act notices, royalty litigation, and lawsuits against illegal file-sharing websites. Some of the legal fees span more than one year, and any resulting victory is calculated later on.

“Attempting to draw some larger conclusion about the effectiveness of our anti-piracy efforts based just on that one line in our tax document is simply inaccurate and highly misleading,” he tells the ABA Journal.

“Our anti-piracy efforts are primarily designed to foster a respect for the rights of creators,” he adds. “The idea is to raise awareness so fans will buy their music from legitimate platforms. And on that count we think our efforts have made a real difference.”

Lamy makes some good arguments, and it’s surely not as cut and dry as some would think it is, but the expenditures are still astronomically high compared to what it recoups. That’s why critics have a point when they say the outrageously high fines the RIAA seeks in court has nothing to do with actual damages, but rather in trying to send a message to other file-sharers.

It’s not about “raising awareness,” the game plan is to obtain multimillion dollar judgments and hope it will scare others. The problem with this is that you end up with cases like Joel Tenenbaum where the judge slashes the fine from $675,000 to $67,500 for “far exceeding any plausible estimate of the harm suffered by the plaintiffs and the benefits he reaped.”

Though what the RIAA spends on legal fees may not paint a clear picture as to what it’s going towards, the fact that it’s recouping so little in order to “foster a respect” or “raise awareness” means the real strategy is not justice, but rather scare tactics.

Stay tuned.

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