RIAA - Where's the money going?


RIAA - Where's the money going, by John Gorman: 29th September 2003

*full credit to writer, John Gorman

Mitch Bainwol is the new Chairman of the Record Industry Association of America (RIAA), the non-profit organization and lobby group, representing the top five music labels. He’s paid a million dollars a year plus munificent expenses to help major labels rid the country of unlawful music downloading renegades. He’s a staunch Republican dealmaker with unrestricted access to the President. To establish territory, insiders claim that Bainwol surreptitiously put current RIAA president Carey Sherman on a 60-day performance evaluation. He’s in Bainwol’s doghouse for offering amnesty to those willing to remove music from their P2P files.

Bainwol, whose favorite music is rumored to be German World War II marching songs, chortled over news of the first group of music downloading criminals sued under his watch. Among them is Brianna Lahara, a 12-year old African-American girl, who lives in a New York housing project. Her single mother, Sylvia Torres, scrimped and saved and obtained supplementary poverty level assistance so Brianna could receive a respectable education. The RIAA suit coincided with Brianna’s first day in the seventh grade at St. Gregory the Great Catholic School in Manhattan.

Torres reached an agreement to pay a $2,000 fine to settle the case, according to the RIAA. The organization refused to discuss how the settlement amount was reached. In the RIAA’s world $2,000 is spare change for a single mother living in Harlem. The RIAA claimed Brianna received a significant financial break since the actual penalty the they’re allowed to charge is $150,000 per downloaded song, according to the Digital Millennium Copyright Act (DMCA).

The DMCA, which was clandestinely passed by Congress and signed into law by then-President Bill Clinton in 1998, places stringent control on how trademarked, copyrighted, licensed and exclusively controlled material is distributed through the Internet. The bill interprets any Internet audio or video transmission as a perfect digital reproduction of the original recording. In reality, file-shared music on MP3 and distributed by peer-to-peer (P2P) programs isn’t even close to an exact copy. MP3 distributed audio’s fidelity is highly compressed.

The Washington-based P2P United, an industry trade association, is paying Brianna’s $2,000 fine. "We don't condone copyright infringement, but it's time for the RIAA's winged monkeys to fly back to the castle and leave the munchkins alone," said executive director Adam Eisgrau. P2P United represents six of the largest file-sharing Web sites, including Grokster, StreamCast and BearShare.

A decade ago when the Internet evolved into a mainstream medium, P2P creators offered labels propriety right leasing but couldn’t get appointments with label decision makers. They weren’t interested in hearing a pitch on a far-fetched music distribution system and were content with the gargantuan profits they were raking in by re-releasing their vinyl record catalogs to CD. It was found money since, with few exceptions, the label controlled artist catalogs and contract interpretation deprived many artists of royalties from the CD repackages. What the labels didn’t have primed was how they would generate revenue after the baby boomers replaced their vinyl with CDs. By disregarding P2Ps, the music industry fell behind the curve of technology.

Users of P2Ps for music sharing fall into two categories: Those who are music lovers and collectors discovering new music by downloading tracks from albums. These people buy the actual CD of music they like to hear full fidelity. The other group is downloaders who have no intention of buying music. That criterion hasn’t changed since music was first played on radio, which, initially, was also attacked by labels claiming that hearing free music would put them out of business. There are those who buy music and those who don’t. The percentage of music buyers before and after the introduction of P2P services has remained the same. Along with Internet radio, P2P music trading, in less than a decade, has replaced traditional radio as the prime source of new music exposure.

It gets better. When pressed on what the RIAA planned to do with the money received through settlements and lawsuits, they were forced to admit that not a single penny of money collected would be distributed to recording artists. Instead, the money will be used to cover expenses for its on-going anti-P2P campaign. Pity poor Metallica drummer and anti-P2P zealot Lars Ulrich. . The dumb bastard probably believed some of that collected money would be distributed to the artists that created the music. King Nothing.

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Media Man Australia interviews John Gorman - 9th July 2003

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