From WSJ.com
After
years of suing thousands of people for allegedly stealing music via the
Internet, the recording industry is set to drop its legal assault as it
searches for more effective ways to combat online music piracy.
The decision represents an abrupt shift of strategy for the
industry, which has opened legal proceedings against about 35,000
people since 2003. Critics say the legal offensive ultimately did
little to stem the tide of illegally downloaded music. And it created a
public-relations disaster for the industry, whose lawsuits targeted,
among others, several single mothers, a dead person and a 13-year-old
girl.
Instead, the Recording Industry Association of
America said it plans to try an approach that relies on the cooperation
of Internet-service providers. The trade group said it has hashed out
preliminary agreements with major ISPs under which it will send an
email to the provider when it finds a provider's customers making music
available online for others to take.
Depending on the agreement, the ISP will either forward the note to
customers, or alert customers that they appear to be uploading music
illegally, and ask them to stop. If the customers continue the
file-sharing, they will get one or two more emails, perhaps accompanied
by slower service from the provider. Finally, the ISP may cut off their
access altogether.
The RIAA said it has agreements in principle with some ISPs, but
declined to say which ones. But ISPs, which are increasingly cutting
content deals of their own with entertainment companies, may have more
incentive to work with the music labels now than in previous years.
The new approach dispenses with one of the most contentious parts of
the lawsuit strategy, which involved filing lawsuits requiring ISPs to
disclose the identities of file sharers. Under the new strategy, the
RIAA would forward its emails to the ISPs without demanding to know the
customers' identity.
Though the industry group is reserving the right to sue people who
are particularly heavy file sharers, or who ignore repeated warnings,
it expects its lawsuits to decline to a trickle. The group stopped
filing mass lawsuits early this fall.
It isn't clear that the new strategy will work or how effective the
collaboration with the ISPs will be. "There isn't any silver-bullet
anti-piracy solution," said Eric Garland, president of BigChampagne
LLC, a piracy consulting company.
Mr. Garland said he likes the idea of a solution that works more
with consumers. In the years since the RIAA began its mass legal
action, "It has become abundantly clear that the carrot is far more
important than the stick." Indeed, many in the music industry felt the
lawsuits had outlived their usefulness.
"I'd give them credit for stopping what they've already been doing
because it's been so destructive," said Brian Toder, who represents a
Minnesota mother involved in a high-profile file-sharing case. But his
client isn't off the hook. The RIAA said it plans to continue with
outstanding lawsuits.
Over the summer, New York State Attorney General Andrew Cuomo began
brokering an agreement between the recording industry and the ISPs that
would address both sides' piracy concerns. "We wanted to end the
litigation," said Steven Cohen, Mr. Cuomo's chief of staff. "It's not
helpful."
As the RIAA worked to cut deals with individual ISPs, Mr. Cuomo's
office started working on a broader plan under which major ISPs would
agree to work to prevent illegal file-sharing.
The RIAA believes the new strategy will reach more people, which
itself is a deterrent. "Part of the issue with infringement is for
people to be aware that their actions are not anonymous," said Mitch
Bainwol, the group's chairman.
Mr. Bainwol said that while he thought the litigation had been
effective in some regards, new methods were now available to the
industry. "Over the course of five years, the marketplace has changed,"
he said in an interview. Litigation, he said, was successful in raising
the public's awareness that file-sharing is illegal, but now he wants
to try a strategy he thinks could prove more successful.
The RIAA says piracy would have been even worse without the
lawsuits. Citing data from consulting firm NPD Group Inc., the industry
says the percentage of Internet users who download music over the
Internet has remained fairly constant, hovering around 19% over the
past few years. However, the volume of music files shared over the
Internet has grown steadily.
Meanwhile, music sales continue to fall. In 2003, the industry sold
656 million albums. In 2007, the number fell to 500 million CDs and
digital albums, plus 844 million paid individual song downloads --
hardly enough to make up the decline in album sales.