KaZaA, one the dominant file-sharing program in the P2P community, is apparently doing all it can to try and make money from the millions who still use the program to share music, movies, and more illegally with one another.

Those that are afraid of getting busted by copyright holders can now download “as much music as your computer can handle” from KaZaA itself for $19.98 p/mo. The price also includes unlimited ringtone downloads (yeah).

Kazaa is also planning to release a major new addition to the service in the hopes that it will “shake up the online media industry,” currently dominated by Apple’s iTunes. Kazaa hopes to build brand loyalty and differentiate themselves from other digital music services like iTunes, Napster, Amazon and Rhapsody.

For an additional fee the new service will allow Kazaa members the ability to upload and share video content direct with other members of the Kazaa community via a player due to be released soon. This is a feature that may actually make it worth the probable $30-$40 subscription fee for those looking for the selection of P2P, but without any of the inherent legal risks.

“With the invention of HD and the popularity of current social networking came a realization that the public could now interact with all forms of media in a social network environment for the purpose of business or pleasure,” reads a KaZaA press release. “We have been working to enhance the platform in order to deliver the most complete package on the market. Satisfied customers have always been our backbone and we have dedicated this functionality to them. Value for money is what we represent and with the recession people are closely monitoring their expenditure, of course we will continue working on the progression of our product with several free additions in the company pipeline.”

Moreover, it’s an odd sight to see KaZaA working overtime to turn itself into a legitimate online media distribution entity. If the entertainment industry had allowed it to do this 8 or 9 years ago it could’ve been a contender, but now I think it’s far too late in the game.

Stay tuned.

jared@zeropaid.com

We’ve been following the Jammie Thomas case for some time now and, interestingly enough, our latest coverage discussed how the legalities of MediaSentry was being questioned. During the Jammie Thomas case, there was a motion filed that suggested that the judge only looked at the state laws of the defendants location. The motion to suppress the evidence was originally denied, seemingly on the basis of geography (MediaSentry was operating outside of the state)

You’d think there would be some uncertainty about the legality of MediaSentry’s investigation techniques. Of course, the RIAA seems to think that the techniques are perfectly sound if you read this latest objection in the Tenenbaum case (PDF, source with built-in PDF viewer, hat tip: Ray Beckerman). Here’s the reference:

Finally, the District of Minnesota recently rejected an identical motion asserted by the same counsel in Capitol Records, Inc. v. Thomas-Rasset, Case No. 06-cv-1497-MJD-RLE (D. Minn.). In the Thomas-Rasset case, the court found that counsel’s arguments had no merit and denied it. See Capitol Records, Inc. v. Thomas-Rasset, Case No. 06-cv-1497-MJD-RLE, slip op. at 2-12 (D. Minn. June 11, 2009) (denying defendant’s motion to suppress evidence by MediaSentry because defendant failed to show MediaSentry violated any law in gathering evidence to be used in the case) (hereinafter Thomas-Rasset, attached hereto as Exhibit B). Specifically, the Thomas-Rasset court held that:

MediaSentry did not illegally obtain the evidence in question. MediaSentry acted for the legitimate purpose of discovery infringers and protecting its clients’ copyrights. Therefore, there was no ethical violation committed by Plaintiffs’ attorney’ involvement with MediaSentry’s investigation. . . . Because Defendant has failed to show that MediaSentry violated any law in gathering the evidence to be used in this case, Defendant’s motion to suppress is denied.

Id. For all of these reasons and those explained below and in the Thomas-Rasset decision, Defendant’s Motion to Suppress should be denied.

Perhaps that ellipses is a little convenient given that the reason, according to the more recent motion filed by Thomas’ legal counsel, said that the only real reason that the motion was rejected was because of geographical law problems (the judge merely looked at laws in one state, not the state MediaSentry operated in), not necessarily because the practises were completely legal anywhere. Naturally, this is the legal counsel for the RIAA and it would probably be unwise on the part of the lawyers to expose this vulnerability in their own motion.

Still, who knows how many inconsistencies US law experts can find throughout this case? It’ll be interesting to see how the judge responds to this regardless.

Have a tip? Want to contact the author? You can do so by sending a PM via the forums or via e-mail at drew@zeropaid.com.

A few days ago, we noted that Jammie Thomas and her lawyers vowed to appeal the $1.92 million damage award saying that the award was unconstitutional. Court documents (PDF, source with built-in PDF viewer, hat tip Ray Beckerman) recently released certainly backs up what the lawyers had said they’d do now.

While the documents border on being considered a lengthy read, it’s certainly well worth it as one can very easily see the amount of research that actually went in to this motion. There are several pages that point out what we have suggested in a previous posting – that there is quite a discrepancy between how much one pays for a single track on iTunes (we suggested it was 99 cents per track as this has been the classic price-point for a single song, but the documents say $1.29) and the actual award ($80,000 per track)

So, starting from the beginning of the filing, the motion argues, unsurprisingly, that the award amount for damages is unconstitutional. How this argument was brought about, and is repeated throughout the entire document, is what makes this argument fascinating. It’s not entirely the large number, $1.92 million, that is seen as grossly excessive, but the damage of cost versus damages. In this case, on a per song basis with the knowledge of what a single track costs on iTunes – $1.29 – the damages ratio is 1:62,015.

If $1.92 Million was bad PR, imagine the kind of PR the RIAA would get if they sued for $134.24 Million.

The filing further argues that if each song was compared to an album for sale, the ratio is a whopping 1:5,333.

The document explains, “such a judgment is inconsistent with the Due Process Clause of the United
States Constitution.”

In a later part of the document, Thomas’ lawyers cite another case that pin-points why the ratio is extremely important in determining the constitutionality of the award:

Campbell, 538 U.S. at 418. Although the Supreme Court has declined to state a bright-line rule about the maximum permissible ratio, it has repeatedly held that “few awards exceeding a single-digit ratio between punitive and compensatory damages, to a significant degree, will satisfy due process.”

So, at most, the damage award would be 1:9, or $1.29:$11.61 on a per track basis.

To put the whole concept of the currently awarded damages into another perspective, there’s this particular passage later on in the court documents that highlight further why $1.92 million, or $80,000 per track, is grossly excessive:

Had the recording companies sued on all the songs they claim to have found on Mrs. Thomas’s computer, the verdict would have been $136,240,000. This does not show that they are “being reasonable” by seeking only $1.92M; it shows, rather, that $80,000 per song is a grossly excessive and therefore unconstitutional civil penalty.

“Mrs. Thomas did no physical harm; any harm that occurred was purely economic,” the document further argued, “to the tune of $1.29 for each of the 24 songs or $15 for each of the 24 albums at issue. See also Wechsberg v. United States, 54 Fed. Cl. 158, 167 (Fed. Cl. 2002) (requiring plaintiffs to offer evidence of actual injuries if these are used to justify an award of statutory damages higher than the minimum). Her conduct did not evince any indifference or reckless disregard for the health of safety of others since, again, any harm she did was purely economic. And the targets of her conduct are the largest recording companies in the United States and are hardly financially vulnerable relative to those plaintiffs — maimed children, for example — who we think of as most deserving of punitive damages.”

Not only was there arguments against such a high award, Thomas’ lawyers argued that the discrepancy between the initial $222,000 and the newer $1.92 Million is cause for concern. The document says, “BMW of North America, Inc. v. Gore, 646 So. 2d 619, 626 (1994) (per curiam) (describing disparity between $4M punitive-damages verdict by one Alabama jury and $0 punitive-damages verdict by different jury in case on same facts). “The real problem, it seems, is the stark unpredictability of punitive awards.” Exxon Shipping Co. v. Baker, 128 S. Ct. 2605, 2625 (2008). In this case, this unpredictability is stark indeed: two different juries returned punitive awards that differ by almost an order of magnitude.”

Another note-worthy point being made can be found in this excerpt:

Importantly, the legitimate interests in relation to which a civil penalty must be reasonable are those related to punishing and deterring a defendant for her conduct and the injury that she caused to the plaintiffs. It is unconstitutional to impose a civil penalty on a defendant for either the conduct of others or her own conduct that harmed those who are not plaintiffs. See Philip Morris USA v. Williams, 549 U.S. 346, 353–54 (2007). The plaintiffs in this case repeatedly argued that, in selecting what damages were appropriate, the jury should consider not only the harm to the recording companies, but also to artists creating music (who the recording companies’ representatives repeatedly testified are independent third parties, not employees) and to consumers of music.

What makes this point particularly interesting is the fact that the copyright industry in the United States have stressed for years that the lawsuit campaign is merely an education campaign. An underlying point through legal threats read by tens of thousands is that you could be hauled to court and forced to pay millions in damages if you don’t pay the settlement. That, legally speaking, if this argument goes over well in court, could be the industry’s own undoing. Another way of putting this is, is one user liable for the actions of another user in a given network or should that second person be liable for their own actions? This question has an interesting resemblance to the safe harbour clause in the DMCA that an ISP is not liable for the users of their own network. In this case, say you upload a copyrighted work to three individuals and leave that swarm. Should you be liable for the actions of those users after you leave that given swarm? The industry certainly seems to want compensation not just for the actions of a given user, but for every user involved in uploading a given work. Trying to get a total award out of just one person is certainly an interesting legal question.

So what is being requested includes the following:

Defendant Jammie Thomas respectfully requests that this Court (1) alter or amend the judgment under Rule 59(e) to remove the award of statutory damages; (2) order remittitur of the statutory-damages award to the statutory minimum; or (3) order a new trial on all issues under Rule 59(a).

Another interesting point being brought up is that Media Sentry had illegally obtained evidence against Thomas. The motion to suppress the evidence was denied because the court only looked at Minnesota law. Since Media Sentry was operating outside of that state, the original motion to suppress the evidence was denied. So where was Media Sentry operating? Turns out, they were operating in New Jersey. Since that is a known fact now with regards to this case, Thomas’ lawyers looked at applicable private investigators acts and determined that the activity conducted by Media Sentry was illegal. This was said at the time:

Neither MediaSentry nor Plaintiffs have disclosed the location of MediaSentry’s activities in February 2005. Media reports in 2005 indicate that MediaSentry most likely conducted its activities from either New Jersey or Maryland. Both New Jersey and Maryland have private investigator and wiretap statutes that MediaSentry would have violated if it conducted its activities from these states. See N.J. Stat. §§ 45:19, 2A:156A-2; Md. Code, Business Occupations & Professions § 13-801; Md. Code, Courts & Judicial Proceedings § 10-402.

This court document certainly has a lot of food for thought on the legalities of file-sharing. It also shows that even though the DMCA exists to supposedly make the legal issues of file-sharing as clear as black and white, there’s still a huge grey area – namely around awards in part, thanks to the fact that there hasn’t been any other file-sharing case that has gone this far that’s related to an individual user.

Currently, the RIAA already wants Thomas to destroy all copies of copyrighted works and hinted at wanting more than the $1.92 Million awarded in court. One can easily see that this particular legal case is far from over even though it’s been carrying on since 2007.

Have a tip? Want to contact the author? You can do so by sending a PM via the forums or via e-mail at drew@zeropaid.com.

The Jammie Thomas case has been going on since 2007. Back then, she was originally fined $222,000 for sharing 24 songs. It looked like it would be all over back then, but that was when a new twist in the case happened – Judge Davis threw out the case citing a manifest error in law by instructing the jury that merely making songs available via a shared point is copyright infringement. The RIAA appealed the decision to throw out the case, but the judge denied that appeal – paving the way for the re-trial. Unfortunately, right before the re-trial, it started to look like it would be very possible that she wouldn’t get legal counsel, but she did get new legal council before the case would continue.

Things started to look like it would go her way, but in June, she lost the re-trial and was fined $1.92 million. Serious questions were raised by many over whether or not that fine is unconstitutional as there seems to be a huge discrepancy between the fine itself and actual damage it caused. It is true that one can go to iTunes and pay $24 for the same number of songs. Many argue that the fine is grossly excessive. Not only this, but Richard Marx, an artist whose music appeared in the lawsuit, said that Jammie Thomas “got a raw deal”.

The RIAA (Recording Industry Association of America) has said that they are willing to settle the case, but there’s new details that have emerged that says that the Jammie Thomas case will continue it’s long, now close to 3 year saga. CNet is reporting that Jammie Thomas is appealing the ruling of the re-trial. There’s citation of what many legal experts have figured about the case, that the appeal is based on the argument that the fine is excessive and unconstitutional.

“She’s not interested in settling,” attorney Joe Sibley said in a brief phone interview with CNet. “She wants to take the issue up on appeal on the constitutionality of the damages. That’s one of the main arguments–that the damages are disproportionate to any actual harm.”

The RIAA seems to be trying to dump any and every bit of blame onto Thomas though.

“The defendant can, of course, exercise her legal rights,” said Jonathan Lamy, an RIAA spokesman. “But what’s increasingly clear, now more than ever, is that she is the one responsible for needlessly prolonging this case and refusing to accept any responsibility for the illegal activity that two juries decisively found her liable for. From day one, we’ve been fair and reasonable in exercising our rights and attempting to resolve this case.”

Further in the report, there was comments by Thomas’ lawyers that the RIAA did contact her to settle the case, but wouldn’t offer any dollar values. During the trial where she was originally fine $222,000, apparently the RIAA offered to settle the case for $25,000.

It’s unclear on what other grounds Thomas is appealing the case, but one thing is certain, the case will be continuing and addressing the constitutionality of the latest fine. It will be interesting to see where this goes from here.

Have a tip? Want to contact the author? You can do so by sending a PM via the forums or via e-mail at drew@zeropaid.com.

Early on this month, lawyers working on Jammie Thomas’ defence argued that the evidence gathered by Media Sentry should be barred from the case because the evidence was gathered illegally. From our previous report discussing the motion:

“MediaSentry collected the evidence against Jammie Thomas in violation of the
Minnesota Private Detective Act and the federal Pen Register and Trap and Trace Devices Act and Electronic Communications Privacy Act of 1986,” reads the motion. “These violations were crimes under Minnesota law and federal law.”

The case could set a very interesting precedent because it could confirm or deny the legitimacy of the legal threats the copyright industry had issued in years past. Tens of thousands of US residents have received legal threats saying that if they don’t pay a few thousand dollars, then the copyright industry would take them to court where they would face jail time and hundreds of thousands of dollars per infringement. All the way up to this point, no case has reached a verdict in the United States.

Already, Jammie Thomas lost her case back in 2007 where she was fined $222,000 for sharing 24 songs on the FastTrack network. Then, in a surprising turn of events, Judge Davis threw out the case because of an error on his part. The main reason for the case being thrown out was because he instructed the jurors that merely placing copyrighted works in a shared point constitutes copyright infringement. Realizing this error, he threw the case out saying that steps to allow distribution does not, in and of itself, constitute copyright infringement. In short, it was a “manifest error in law”. The record labels were not happy about the turn of events. They consequently appealed the mistrial ruling saying that the judge had correctly instructed the jurors in this case and that the trial was legitimate. Unfortunately for the major record labels, the judge denied that appeal, allowing for the new trial that will take place tomorrow.

Have a tip? Want to contact the author? You can do so by sending a PM via the forums or via e-mail at drew@zeropaid.com.

There are many eyes on the Jammie Thomas trial. Yesterday, we reported that the EFF has submitted an amicus brief (PDF – Hosted by Wired) on the case saying that the “making available” theory was bogus and that copyright law requires actual distribution – a shared point is not distribution.

Wired’s ‘Threat Level’ has also been covering the trials and reported on the MPAA’s (Motion Picture Association of America) amicus brief. From the Brief:

2. MPAA urges the Court not to impose any requirement of actual distribution because the Copyright Act imposes no such requirement. Section 106(3) of the Act, 17 U.S.C. § 106(3), provides copyright owners with a broad right of distribution, not simply “actual distribution;” and the act of making copyrighted works available over a P2P network or otherwise is included within that broad right. For several reasons, MPAA believes the only proper reading of Section 106(3) is that it encompasses, and always has encompassed, the act of making available.

II. (…) Article 6(1) of WTC, entitled “Rights of Distribution,” provides that copyright owners “shall enjoy the exclusive right of authorizing the making available to the public of the original and copies of their works through sale or other transfer of ownership.” See also WPPT Art. 12(1) & Art. 14. The concept of “making available,” although it has particular relevance to the digital age, was not new to international copyright treaties, having first appeared nearly a century earlier in the Berne Convention’s definition of a “published work.” See. Dr. Mihaly Fiscor, The Law of Copyright and the Internet: The 1996 WIPO Treaties, Their Interpretation and Implementation 166-67 (2002).

A violation of the making available right does not require proof that copies were actually transferred to particular individuals. The essence of the right is that the copyright owner determines the manner and means for offering his or her work to the public. See WIPO, Guide to the Copyright and Related Rights Treaties Administered by WIPO at 208 (2003)

From Threat Levels report:

“It is often very difficult, and in some cases, impossible, to provide such direct proof when confronting modern forms of copyright infringement, whether over P2P networks or otherwise; understandably, copyright infringers typically do not keep records of infringement,” van Uitert wrote on behalf of the movie studios, a position shared with the Recording Industry Association of America, which sued Thomas, the single mother of two.

So, in short, the MPAA argues that, because WIPO said so, there shouldn’t be proof required to convict someone of copyright infringement over a file-sharing network for reasons that the burden of proof is too difficult. So why is the MPAA trying to resort to arguing that proof is not required? Ernesto of TorrentFreak suggests that there is now evidence that the investigation methods by the copyright industry have been proven to be faulty through study – the study that shows that it’s possible for printers to be sued for downloading movies.

It is also interesting to note that the core arguments made by the MPAA say that it’s “international obligations”, not necessarily the Copyright Act that suggests that proof is not required. It’s revealed that the “international obligations” is mainly WIPO, and organization that has been long seen as the US copyright industries international copyright enforcement arm. Knowing this important fact alone makes the amicus brief of the MPAA even more absurd because, by extension, the MPAA is saying that we don’t need proof because we said so and our word overrides the copyright act when we want it to.

Is it some form of obligation? Maybe. In the mean time, the United States also has a history of flaunting these so-called “international obligations” when it doesn’t suit their interest. For instance, the Fairness in Music Licensing Act of 1998 in the United States that the Irish Music Right Organization (IMRO) did not like because royalties were not being paid to Irish music rights holders (this is also known as the “bars and grills” exception). While a settlement was agreed on, the law has remained the same (reference)

So while the MPAA is arguing that there should be no burden of proof because of “international obligations”, the international obligations have a history of simply going along with US interest organizations in the first place. Because of the “bars and grills” exception, it’s a wonder that the US has to listen to some “international obligations” and not others. Since these “international obligations” are either flimsy at best or simply the word of the major American copyright industry (which the MPAA is a part of in the first place), their premise of international obligations seems to fail flat on its face. Then again, few would be surprised about the suggestion that corporate America owns the United States in the first place.

See also: Ray Beckerman

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In some circles, she’s guilty. In other circles, she’s innocent. The one thing both sides might agree on is that the the Jammie Thomas trial is a landmark trial in US file-sharing history. Earlier today, we reported that 10 law professors suggest that the ‘making available’ theory is not copyright infringement.

At issue is whether or not putting a supposed copyrighted song into a shared directory is copyright infringement. The idea of attempted copyright infringement isn’t new considering the INDUCE act brought up this kind of question back in 2004 which, according to Wikipedia, “targets “whoever intentionally induces any violation” of copyright” While the legislation is dead, the idea of ‘attempted copyright infringement’ lives on to this day, making it’s appearance in court during the Jammie Thomas trial through what is known as the ‘making available theory’.

As mentioned, 10 law professors have already told the courts the following:

The plain language of the statutory text, as confirmed by other courts and leading commentators, compels but one conclusion: that merely making a work available to the public, whether over the internet or otherwise, by itself does not constitute a distribution. More precisely, because a defendant ‘distributes’ in violation of § 106(3) only when she actually transfers to the public the possession or ownership of copies or phonorecords of a work, no distribution is effected merely by making a work available for distribution on a peer-to-peer network.

Now, the EFF has filed its own amicus brief. In a press release, the EFF says that it is demanding a retrial because of potential consequences of the current ruling.

“The Copyright Act simply does not allow suing someone for attempted copyright infringement,” said EFF Staff Attorney Corynne McSherry. “If the RIAA wants to continue with its mass litigation campaign, it’s going to have to invest the time and resources to actually prove those cases — if it can — by showing that infringement actually occurred.”

“The RIAA’s specious ‘making available’ argument threatens to brand people as thieves when the evidence isn’t really there,” said EFF Senior Intellectual Property Attorney Michael Kwun. “We’re pleased the judge is taking a second look at this critical question.”

Currently, the judge in the trial is re-considering the judgement put on Jammie Thomas where the guilty verdict landed Thomas in a $222,000 fine.

Here’s a highlight of the amicus brief from the EFF:

Ms. Thomas, like more than 20,000 other individuals, was sued by Plaintiffs for copyright infringement based on her use of peer-to-peer (“P2P”) file sharing software. The jury was instructed that:
The act of making copyrighted sound recordings available for electronic distribution on a peer-to-peer network, without license from the copyright owners, violates the copyright owners’ exclusive right of distribution, regardless of whether actual distribution has been shown.

This instruction was erroneous as a matter of law. The plain language of the Copyright Act and applicable precedents mandate that an infringement of the distribution right requires the unauthorized, actual dissemination of copies of a copyrighted work—a completed act of transfer. To permit a finding of distribution liability based on anything less would be to transform section 106(3) into an unbounded form of civil attempt liability, even where no copies had ever been distributed and thus no harm had ever been inflicted on the copyright owner.

More than just Ms. Thomas’ liability is at stake. Acceptance of the “making available” theory could disrupt copyright law in a variety of other contexts. As will be discussed further below, several Plaintiffs sued a national radio broadcaster, XM Radio, based on a variant of the “making available” theory that they advance here. See Atlantic Recording Corp. v. XM Satellite Radio, No. 1:06-cv-03733-DAB (S.D.N.Y. filed May 16, 2006). Copyright owners have also pressed this theory against Google, contending that the Internet search engine runs afoul of an expansive “making available” conception of the distribution right. See Perfect 10, Inc. v. Amazon.com, Inc., 508 F.3d 1146 (9th Cir. 2007). And the Recording Industry Association of America has sent thousands of DMCA notices to colleges and universities based solely on evidence that students have made songs available for possible download by others. See Ted Bridis, AP: Music Companies Targeting Colleges, S.F. CHRONICLE (Feb. 21, 2007). As a result of these notices, students can suffer a range of consequences, including fines and permanent loss of access to their school networks.

Whether or not this will change the outcome of this particular trial is up to debate, but the important thing is some of the precedents that this case is setting – particularly in light of other judgments that strike down the idea of the making available theory.

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For a quick recap, the lawsuit against the RIAA is for alleged racketeering. The activities the RIAA is being accused of include hiring an unlicensed investigator and forcing people to settle whether guilty or not based on flimsy evidence. While there is some doubt on whether or not this lawsuit would survive on the part of some, it seems as though there are those willing to fight the RIAA anyway.

Now, the RIAA has responded (PDF – hosted by Wired) to the case calling the lawsuit scandalous and hyperbolic:

Plaintiff has filed a massive complaint that is anything but the short and plain statement envisioned by Rule 8 and ordered by this Court. The document is now 108 pages with 353 paragraphs. It not only does not limit the causes of action at issue, but rather it adds several new claims. Nor does it clarify what facts support which claims or what claims are asserted against which Defendants. Instead, one of the ways in which the Second Amended Complaint appears to try to remedy the deficiencies of the First Amended Complaint is by adding significant verbiage that has little to do with the current Plaintiff and that relates to matters, even if true, caused this Plaintiff no harm. And, although short on specific allegations relevant to the claims that it attempts to plead, the document is long on rhetoric, hyperbole, and scandalous allegations that appear calculated not to state viable causes of action but rather to garner maximum press coverage, which it has done.

The document further states:

Plaintiff wants to take broad discovery, apparently including fact-finding regarding hundreds of cases outside of hers, from all Defendants regarding all of the purported claims simultaneously. Defendants, on the other hand, seek an approach that would allow the Court to narrow the case by carving out a large number of the claims that should be amenable to a prompt resolution with limited or no discovery.

Clearly, the RIAA isn’t happy about being sued, though it’s doubtful that this would be a surprise to anyone.

David Kravets on Wired’s Threat Level notes, “Whether the judge will allow the RIAA to argue their latest filing is unclear. Judge Brown had said she did not want to hear a renewed motion to dismiss from the RIAA.”

Hat tip: Threat Level

According to a new MPAA press release, 2006 was a great time to be in the movie biz, domestically, and in particular, internationally, thereby heaping a ton of skepticism upon all of their claims that illegal P2P and file-sharing services will be the death knell of their industry.

Compared to $8.99 billion USD in 2005, the U.S. box office raked in some $9.49 billion in revenues in 2006 for an increase of some 5.5%. The new results show an end to a nearly 3 year-long decline in ticket sales, the number sold of which increased to 1.45 billion. To note, the record for domestic box office revenue was 2004’s $9.54 billion USD.

Global box office sales reached an all-time high of nearly $25.8 billion USD, and increase of nearly 11% from the $23 .3 billion they earned in 2005.

“Last year film audiences around the world demonstrated through strong ticket sales that they love going to the movies,” said Dan Glickman, Chairman and CEO of the MPAA. “Technologies are emerging at a fast pace challenging our industry – filmmakers and exhibitors alike – to work harder and smarter to keep moviegoers coming back for more and I think we are well on our way.”

Yet, is this really the case? Is what he’s saying true?

I’d argue that like any other service it’s a combination of CONTENT and PRICE that determines a customer’s desire to make a purchase. If you put out lousy content and then try to charge your audience $10 bucks a ticket then don’t be amazed if the audience doesn’t show up to fill your theaters. Instead of keeping an eye on what kinds of movies they’re producing, they instead try to blame the evils of P2P and illegal file-sharing for their own failures and shortcomings.

People go to the movies to see a GOOD MOVIE period. I mean it’s not some secret locked away in a Freemason’s safe somewhere that people will buy a movie ticket to see a quality movie. If you have to wonder why ticket sales are down all the while you’re plastering “Legally Blonde 2″ billboards all over town then I think you’re probably in the wrong line of work.

So what movies that have been released over the last couple of years that can give us a hint as to what has occurred in terms of quality of content and box office drawing power?

In looking at the movie titles that were released in each of the last 3 years, as shown below, you can see just why 2004 was a record breaking year in box office sales. Shrek 2, Harry Potter and The Prisoner of Azkaban, Spider-Man 2, The Incredibles, The Passion of the Christ, and Meet the Fockers lured tons of people into theaters because they were movies that the audience felt were actually WORTH SEEING.

2005 was of year of dubious releases that weren’t very good. Sure people showed up for Star Wars III and Batman Begins, myself included but, the rest were duds that were just as overpriced as the $7 dollar tub of popcorn they try to sell you on your way in.

2006 wasn’t anything spectacular either, and I would go so far as to say that ticket sales pretty much road the coattails on the success of one movie alone – the Pirates of the Caribbean sequel “Dead Man’s Chest.

So what about all of the MPAA’s claims that illegal P2P and file-sharing services like BitTorrent are slowly killing their industry? I guess these new figures can finally put that argument to rest.

It’s eerily reminiscent of a study done back in June of 2005 by Felix Oberholzer-Gee and Koleman Strumpf called “The Effect of File Sharing on Record Sales – An Empirical Analysis” that effectively argued that contrary to the claims of the recording industry illegal music downloads have had no noticeable effects on music sales.

The study notes:

Using detailed records of transfers of digital music files, we find that file sharing has had no statistically significant effect on purchases of the average album in our sample. Even our most negative point estimate implies that a one-standard-deviation increase in file sharing reduces an album’s weekly sales by a mere 368 copies, an effect that is too small to be statistically distinguishable from zero.

Furthermore, it reports that 803 million CDs were sold in 2002, which was a decrease of about 80 million from 2001. The RIAA continues to places the blame for any decrease in album sales on the rampant use of P2P and illegal file-sharing services but, the study argues that this could have been responsible for no more than a 6 million album total decline in 2002, leaving no explanation for the remaining 74 million CDs that went unsold.

The point here is that just as the RIAA fails to take in account the quality and the value of the content they are producing and expecting consumers to purchase, so too is the MPAA guilty of the same trappings.

Instead of them both blaming the John Q. BitTorrent user for any decline in revenue, I wish each of them would look in the mirror for a change and try remembering that their successes and failures will be determined by the quality of the content they create and the price they charge you and I for it. Delivery models aside, it comes down to the product and its price.

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SOULXTC: “walkin’ the streets of P2P”

“Among the Bennett Media original productions to be featured in HD on Zudeo include Bikini Destinations, The Wild Side, The Extremists, Xotic Xtreme and Snowology. Bennett Media content will be available on Azureus later this year.”

No word yet on the costs of the content. The shows are pretty much the same ones that were licensed to Guba.com for distribution “on a pay-per-view, download-to-own and ad-supported basis” late last year, so that might be an indicator for what Azureus could do with them.

Obviously paying for a show like Bikini Destinations might not be that compelling to the average Azureus user. After all, there is lots of this stuff available for free on your average porn tracker sites like Mariposahd.tv.