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ONLY THEMSELVES TO BLAME:
THE RIAA'S LAST STAND

Professor Eugene Quinn
Syracuse University College of Law
JURIST Guest Columnist

Back in the days, not so long ago, when the LP ruled the music store, analog recordings of music did not get the recording industry all worked up into a lather. Each successive generation of an analog copy suffered from an increasingly pronounced degradation in sound quality, and all was right with the world.

Enter the digital revolution, where cassette tapes are no longer the copy mechanism of choice. With digital recording, when done properly, there is no degradation in sound quality past the first generation, no matter how many subsequent generations of copies are made. Moreover, with digital recording, the first generation copy will suffer from almost no perceivable degradation in quality when compared to the original. In this digital age, according to the recording industry, all is no longer right with the world, and if you let yourself get caught up in the hype you are likely to expect the lion and the sheep to be laying down under the tree any day now, with other apocalyptic horrors soon to follow.

The truth is that with the advent of new compression technologies, such as MPEG-1 Audio Layer 3, commonly referred to as "MP3," the Internet, which was previously of little use for the distribution of music, has increasingly become the place to turn for music. In the olden days of the Internet, it was just not possible to send music files electronically because a good quality recording could easily take up 60 MB of space. On a 28.8 KB modem who wanted to wait that long for a song? The emergence of MP3 technology, which can take that same 60 MB song and compress it to 5 MB or less, coupled together with high speed Internet access, today music aficionados can choose from a plethora of legitimately sold MP3s, which can be acquired through the numerous subscriptions services such as Apple痴 iTunes, and illegally copied music acquired through such nefarious sources such as Grokster and Kazaa.

The Recording Industry Association of America (RIAA) would have MP3 users believe that there is something inherently evil about the technology, and it must be avoided at all costs lest we see our society devolve into an anarchistic world. Hopefully by now everyone knows that MP3s are not evil. Who knows, perhaps the RIAA will someday figure that out as well. What we can and do all agree on, however, is that there is an alarming amount of copyright infringement occurring via transmission of copyrighted music over the Internet. It is the copyright infringement that is bad, not the technology. This may seem like a simple enough statement, but one that has eluded the RIAA for well forever. It would seem that the RIAA is getting so caught up with hatred over MP3s that they are forgetting that the goal of copyright owners in our capitalistic intellectual property regime is to make money, not war.

In an example of true market economics at work, Internet users and music lovers came to love MP3s, a truth that has spawned the creation of a long list of commercial subscription services aimed at legitimately selling MP3s. Meanwhile, as MP3 technology took hold, the RIAA was continually trying to kill the technology and once again tell the consumers what they should want to buy, rather than selling them what they demanded. First in the Rio case the RIAA tried to nip MP3 technology in the bud, and they failed. Next, they have been going after such services as the now infamous Napster. These high profile successes against file sharing bandits were abruptly ended in April of 2003, when Judge Wilson of the Federal District Court for the Central District of California ruled that Grokster was not liable for copyright infringements that took place using their software. After careful review of the decision of Judge Wilson, I will suggest that this does not represent a complete reversal of previous decisions, despite such protestations from the recording industry. The distinguishing facts present in the Grokster case all revolve around exactly how the Grokster file sharing technology actually works. Judge Wilson compares the technological workings of Grokster to those of Napster and concludes that Grokster is quite different. Essentially, the Grokster technology cannot be prevented, primarily because it allows for the decentralized swapping of music. There is certainly a difference of opinion on whether the Grokster ruling is correct, but in my opinion Judge Wilson's reasoning is quite compelling and will likely be upheld on appeal.

I dare say that the RIAA thinks, or at the very least is afraid, that Judge Wilson痴 Grokster decision will be upheld on appeal. I say this because as a result of this decision the RIAA decided to take the battle to the people. Yes, rather than give the public what they want for a reasonable price, the RIAA is now engaging in a scorched earth policy; they are suing individual file swappers. In other words they are suing and threatening to sue their customer base. It has seemed to me that the music industry has been hell-bent on killing itself for some time now, so I guess suing its own customers just seems to be the logical next step.

It will certainly be argued that the folks that the RIAA are now going after are not customers, which is exactly why they are being sued. There is a point to this, but it ignores a truth that any fan that has ever purchased a CD knows. CDs are generally priced in the $16 to $20 range, and each CD has one song worth listening to, while the others are all unwanted filler. At a price that ranges from $16 to $20 per wanted song, of course infringement is going to be an option. Simple economics says that if the price is too high demand will be lowered. The problem is in this case demand is not reduced, it is just transferred from legitimate copy to infringing copy. Therefore, thanks to a myopic hatred for MP3s and an aversion to new technologies, the recording industry has caused what we see today; namely rampant copyright infringement that cannot be expected to go away any time soon.

In an attempt to end all copyright piracy, something that will never happen, the recording industry is now turning up the heat in their fight against copyright infringement. On Thursday, June 26, 2003, full-page newspaper advertisements announced that individuals could soon face legal action, and that legal action has finally arrived. The RIAA subsequently obtained 871 subpoenas, is now suing 261 people, has pledged not to go after 鍍he little guy and is quite open about the fact that they are using these tactics to scare people into submission. There is some evidence that these scare tactics are working, but 261 people is just a drop in the bucket. I predict it will only be a matter of time before the file swappers figure out the math and calculate the likelihood that the RIAA will come knocking on their door.

Now, as if things could not get any worse for the RIAA, Universal Music Group recently announced an aggressive plan to significantly reduce the cost consumers pay for CDs by decreasing its wholesale prices and by instituting a $12.98 Manufacturer Suggested Retail Price on virtually all top line CDs. Moreover, software is already available that will allow for virtually anonymous file sharing. My sources tell me this software is still not really ready for the average user, but is getting better and better. Still further, wireless technology is becoming the rage, but as with any new developments in technology there are abuses capable. These wireless services essentially offer anonymous access portals through unmonitored "hot spots." Thus, this declaration of war on customers and potential customers seems ill advised.

All of this leads back to the question, why? Why did the RIAA and it members not see this new technology as presenting an opportunity? The simple answer seems to be the same answer that has always been the case for established companies facing new technologies. The music industry simply has too much invested in the old business model, which is based on packaging artists of questionable talent, promoting them, making one song popular and selling CDs that include mostly filler. Failure to embrace a new opportunity is nothing particularly new for the entertainment industry. After all, if they had their way back in the early 80s VCRs would have been illegal. If the Sony case had gone the other way and VCRs were outlawed, what would the landscape of the entertainment industry look like today?

The RIAA and its members have at every turn attempted to stop MP3s. They have had some loses, but they have had a lot of high profile successes. These 261 individuals who are being sued now will all but certainly go into the success column. After all, these folks are copyright infringers. I am not trying to excuse their actions or wave the battle flag of anti-copyright sentiment. To the contrary, intellectual property rights are critical to stimulating creativity and invention. But, when a copyright owner wants to hold too tightly to their right, then they deserve exactly what they get, which is nothing. In order to make money you need to give something up. Because the industry has been unwilling to give anything, the people have decided to take it, and now practically all lay users think that copyright and trading music is their right. The only explanation I can come up with is that somewhere along the way the RIAA and its members have missed the boat and have caused exactly what they were trying to prevent.


Eugene Quinn is currently a Visiting Professor of Law at Syracuse University College of Law, where he teaches and specializes in the areas of Intellectual Property, Business and Internet Law.

September 15, 2003

GUEST COLUMNIST

JURIST Guest Columnist Eugene Quinn is currently a Visiting Professor of Law at Syracuse University College of Law. Professor Quinn teaches and specializes in the areas of Intellectual Property, Business and Internet Law, and is a member of the patent bar and admitted to practice in New Hampshire.

Professor Quinn is the author of numerous articles on patent law, copyright law and the Internet. His latest article, titled An Unconstitutional Patent in Disguise, examines the constitutionality of the circumvention prevention measures of the DMCA. He holds an LL.M. in Intellectual Property from Franklin Pierce Law Center; a J.D. from Franklin Pierce Law Center; and a B.S.E.E. from Rutgers University. For his Internet home page, click here.