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Is the RIAA successful or not?

Posted By Barry Ritholtz On December 14, 2004 @ 8:13 am In Music,Web/Tech | Comments Disabled

How do you measure the success or failure of the RIAA? (I have a few ideas).

I personally see the RIAA as a massive landgrab. Primarily, they attempt to curry favorable treatment from legislators, and subvert traditional aspects of copyright law via infinite extensions. They win the passage of favorable laws against consumer fair use and technology development, all the while avoiding legitimate economic competition.

In some arenas, the RIAA has been extremely successful in "framing the issues" for debate. Think about Napster, P2P, etc. There was hardly any discussion on the refusal of the music labels to address the growing demand for internet based digital music; Instead, the industry chose to placate offline retailers. Their poor business judgment all but ensured the rise of P2P. We haven’t even broached radio consolidation, formulaic product, or the over-emphasis on mega hits over the long tail [1].

Yet in terms of this debate, one must concede the RIAA has successsfully defined the terms of arguement. For example, consider this December 14 WSJ article [2] by Ethan Smith the improvement in Warner music’s financial condition:

"Warner Music Group posted a narrower loss for the 10 months ended Sept. 30, but the company’s continuing red ink underscores the difficulties, such as rampant piracy, facing the global music business. "

The default belief system is that its "piracy," and not decades of a mediocre (and often flawed) business model — rather poorly executed at that — which is the root of all their problems. Recall that the same tactic was used about home taping — it was killing the music business in the 70s.

From a PR perspective, the RIAA has been extremely effective at framing the debate. "Piracy" seems to be the focus of all discussion. All other issues — price fixing, lack of comeptition, corruption,  cheating their own artists, etc., are mostly ignored.

The one area where the RIAA seems to do poorly, desptie all the noise they make about it, is in litigation. Consider the following from Christopher Null [3] of Mobile PC Mag [4]:

The RIAA Lost Every Lawsuit in 2004

Lots of stories get written when the Recording Industry Association of America sues people, but not much gets written about the aftermath of those suits.

There should be: In the last 12 months, the RIAA lost a landmark suit against Grokster (essentially legalizing peer-to-peer software), lost a suit to Verizon (holding that it did not have to provide names of its subscribers who the RIAA wanted to sue), and has yet to actually win against any of the thousands of individuals it has sued in court (some of the cases have been settled out of court, most are still pending). Suddenly, the RIAA isn’t looking so much as devastating as it does merely pathetic.

Still, while the RIAA is no longer the legal darling that successfully shut down Napster, it’s done an enormous amount of damage to the technology world (not to mention basic freedom) since it launched this crusade, and the group is far from finished. But here’s hoping some intelligent judges, tech-savvy lawmakers, and an activist public will continue to fight the power in 2005.   

-Christopher Null [3] via boing boing [5]

Truly incredible. But perhaps the best way to judge whether the RIAA is successful or not comes from their own site [6]:

The Recording Industry Association of America (RIAA) is the trade group that represents the U.S. recording industry. Its mission is to foster a business and legal climate that supports and promotes our members’ creative and financial vitality . . . In support of this mission, the RIAA works to protect intellectual property rights worldwide and the First Amendment rights of artists; conduct consumer industry and technical research; and monitor and review state and federal laws, regulations and policies.

So how successful is the RIAA?

By their own measures, they have achieved some of their goals — at least in the short term. They have moved industry friendly legislation forward. And as mentioned above, they have successfully framed the debate over P2P and other new technologies.

Over the longer haul, however, they have turned their industry into one universally disliked by its clients and artists, alienating a huge percentage of their consumers; They have missed many many business opportunities and focused on the wrong issues, overemphasizing the glam of P2P litigation, over the nitty gritty hard work of counterfeit enforcement. Lastly, they have failed to adapt to the rapid pace of technological changes.

If their goal is to "support their members’ financial vitality," than we will not fully know the answer to this question for some time to come. But I have a sneaking suspicion that, without a significant shift, the answer will be not very well.


The Long Tail [7]
Chris Anderson
Wired Magazine, October 2004


Warner Music Posts Narrower Loss [2]
THE WALL STREET JOURNAL, December 14, 2004; Page B6


Best Sign that the Legal System Just Might Work: The RIAA Lost Every Lawsuit in 2004 [3]
Mobile PC Mag, 10:40 AM – Monday, December 6 2004
Christopher Null


Recording Industry Association of America (RIAA) [8]
About Us


Article printed from The Big Picture: http://www.ritholtz.com/blog

URL to article: http://www.ritholtz.com/blog/2004/12/is-the-riaa-successful-or-not/

URLs in this post:

[1] long tail: http://www.wired.com/wired/archive/12.10/tail_pr.html

[2] WSJ article: http://online.wsj.com/article/1,,SB110295997209698620,00.html

[3] Christopher Null: http://www.mobilepcmag.com/#RIAA

[4] Mobile PC Mag: http://www.mobilepcmag.com/

[5] boing boing: http://www.boingboing.net/

[6] site: http://www.riaa.com/about/default.asp

[7] The Long Tail: http://www.wired.com/wired/archive/12.10/tail.html

[8] Recording Industry Association of America (RIAA) : http://www.riaa.com/about/default.

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