• July 29, 2009
  • There’s a trial happening this week in a Rhode Island federal courtroom that would be comical if it wasn’t so sad.  The Recording Industry Association of America (RIAA) is suing a Boston University graduate student for copyright violations when he downloaded 30 songs from an illegal file-sharing site.

    No one disputes the ownership of the copyrights in this case but the case brought by the RIAA is a borderline psychotic episode in the formation and destruction of markets that happens in any economy.  The RIAA sees a simple copyright infringement but what’s really at stake is a business model that is on court mediated life-support.

    As most people who have not spent the last six months in Tibet know, the record industry’s business model of selling songs burned into CD’s has evaporated in the face of digital download from legal sites like iTunes and illegal sites too numerous to name.  The RIAA has chosen a legal route to protecting its intellectual property (IP) rather than innovating by embracing technology that would make it possible for customers to behave in a legal manner rather than as pirates.

    No amount of legal maneuvering will change the direction that the market is dragging the RIAA in.  Moreover, RIAA’s vindictive prosecution (What else can we call it?) of a penniless graduate student is most likely doing much to impoverish his parents.

    For what end?

    The marginal cost of producing a copy of a song in the digital era is, what?  Nil?  If so, can it really be said that even this illegal download harmed anyone?  I know the counter argument is that if everyone does it, all of a sudden there is no market, no incentive for artists to invest their time and talent in making music.  But I disagree.

    In “Free: The future of a Radical Price” Chris Anderson argues that producers of goods and services will increasingly adopt free as the base price to induce customers to purchase upgraded products and services.  Already in the music industry, some artists are giving away their songs to build customer lists that they can then market to.  The marketing takes many forms from selling tickets to play dates and events to soliciting ideas for new compositions.

    In the free approach, we see a network forming that consists of artists, consumers, venues, and possibly record labels though when the marginal cost of producing a copy of a song is nil it means the record companies have to figure out a new angle.

    That’s what the RIAA case is really about.  The RIAA is dead in the water, out of innovative ideas for engaging with its customers so now it is cannibalizing them and it is a disgusting sight.  Regardless of the outcome in court I hope the defense has the wits about them to sell the movie rights to this story.  Better still, if I was studying filmmaking right now I couldn’t find a better subject for a documentary.

    Published: 15 years ago