Riaa Lawsuits Against 261 File Traders

The RIAA has kicked off its new revenue generating suing practice in style, filing lawsuits against 261 file traders.

The music label mob has methodically reached this point. After filing over a thousand subpoenas, the RIAA (Recording Industry Association of America) is now going after the worst of the bunch with good old fashioned lawsuits. The file traders could pay up to $150,000 per illegal song swap, if they are found guilty.

It's no secret that the music labels blame file traders for a decline in sales. They don't point to their own failings such as a lack of subscriptions services, high CD prices or threats against their consumers as the problem. No, this is a righteous bunch doing what is required to protect their intellectual property.

"Nobody likes playing the heavy and having to resort to litigation," RIAA president Cary Sherman said in a statement. "But when your product is being regularly stolen, there comes a time when you have to take appropriate action."

This is quite a change of heart from when the labels "played the heavy" in the 1990s by price-fixing or so the FTC said. But the music industry big-whigs would rather not talk about that little fiasco. Instead, they would like to talk about the lost revenue. That is, after all, why they've launched this new lawsuit arm of their business.

Along with announcing the lawsuits, the RIAA also put out new data for the last six months of sales. You'll find some interesting tidbits in these numbers.

Overall, CD sales did decline at the start of 2003. Compared to the first six months of 2002, retail unit shipments fell 9.8 percent to 245.2 million and revenue dropped 9.1 percent to a paltry $4.25 billion. Don't shed too many tears just yet though.

Over the same period, CD single sales surged by 162.4 percent in units and 173.5 percent in revenue. This raises an interesting question.

Most file traders go after songs one at a time. They pick and choose the tunes they like. Could it be the case that consumers don't see a good value in buying an entire CD for $16.99 when all they want is a couple of songs? The hike in single sales backs up this trend.

The recent success of Apple's iTunes service would also seem to confirm this. Users of iTunes can buy one song at a time for 99 cents. Apple conveniently put out a statement today, saying it has sold 10 million songs since its service started just four months ago.

If the music labels had gotten their act together long ago and provided a decent online store or cut prices on their CDs, they might not find themselves in this predicament today.

That would make too much sense. Instead, the RIAA hopes to sue thousands of users and recoup its losses one teenager or grandmother at a time. That's good business.

Given the RIAA's bold stance here, we've taken the liberty of finding the perfect way for music executives to celebrate their hubris. Their balls are obviously too big to fit in their pants, so why not put them where it counts. ®

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