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Old 03-20-2008, 04:49 AM   #1 (permalink)
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RIAA in trouble x2

First article
Quote:
Things will get very ugly over the next few months for the RIAA, if one disgruntled file sharing lawsuit victim gets her way.

Tanya Andersen, the single mother who filed a countersuit against the RIAA after the organization mistakenly sued her for sharing music online, attempted to hold it responsible for all sorts of heavy infractions ("RICO violations, fraud, invasion of privacy, abuse of process, electronic trespass, violation of the Computer Fraud and Abuse Act, negligent misrepresentation, the tort of 'outrage,' and deceptive business practices").

According to Mike Ratoza, a copyright lawyer with Bullivant, Houser and Bailey who teaches at the University of Oregon, Andersen is close to forcing the RIAA into the discovery phase of her countersuit, after having her original complaint dismissed on Feb. 19. Andersen's amended complaint, due March 14, will not be a layup, and there are no guarantees in litigation. But assuming her lawyer is able to craft the pleading to the judge's specifications, Andersen will have another chance to tilt at the RIAA windmill, with the case proceeding into the discovery phase. If that happens, the RIAA could be forced to release potentially incriminating details about its techniques for investigating alleged file sharers.

This information would likely be held under a confidential seal, but if lawsuits over mold, tobacco, and asbestos are any indication, the RIAA's secrets will likely leak out into the legal community at large, potentially culminating in a class-action lawsuit.

Once Tanya Andersen files her amended Complaint, which the RIAA is barred from contesting this time around, the organization could have to explain the following details by producing documents and allowing major-label anti-piracy executives to be deposed:

- How much the RIAA's lawyers make
- Why the average file sharing settlement fee is $4-5K
- How it decides which file sharers to sue, and which ones not to sue
- Where the settlement money goes (i.e. whether any of it makes it to the artists)

If it turns out that the RIAA is paying its investigators (such as MediaSentry) a percentage of the settlements that result from their investigations, it is in even more trouble. That's illegal in many states, according to Ratoza, including New York.

Things could get even worse for the RIAA. Andersen isn't likely to be granted class action certification for her suit, because federal courts (where copyright-related proceedings take place) are not friendly to class-action suits. But another RIAA lawsuit victim could use the information divulged in Andersen's case to countersue the RIAA for specific allegations (fraud and RICO violations) in a state court, where class action certification is more likely.

Even without a class action lawsuit, the RIAA nutshell is likely to split wide open after Andersen's case hits the discovery phase, causing problems in subsequent cases. Ratoza expects the discovery phase in Andersen's case to start in about 90 days, and said it will last 4-6 months. The judge isn't likely to rule until early next year, but the RIAA's secrets could leak out a lot sooner.
Their secrets might get out, which can open them to get sued, as well as potential illegal activity.


Second article
Quote:
February 27, 2008 -- Artist managers are girding for battle with their music overlords over when their clients are going to see some of the dough negotiated last year in copyright-infringement settlements with a host of Web sites.

Universal Music, Warner Music and EMI - either collectively or individually - settled claims with Napster, Kazaa and Bolt.com. Napster alone had to cough up $270 million.

The fourth major label, SonyBMG, was not part of the suit because Napster was owned by BMG parent company Bertelsmann.

All four struck separate deals with YouTube that included revenue participation.

A contingent of prominent artist managers claims that little to none of that money has trickled down to their clients. They are now considering legal action.

"Artist managers and lawyers have been wondering for months when their artists will see money from the copyright settlements and how it will be accounted for," said lawyer John Branca, who has represented Korn, Don Henley, and The Rolling Stones, among others.

"Some of them are even talking about filing lawsuits if they don't get paid soon."

Record label sources said corporate bosses are still deciding on how best to split the money. In determining the payout, they said not every artist is owed money and it must be calculated with regard to the level of copyright infringement for each artist.

What's more, these sources said that after the labels recouped their legal expenses, there wasn't much left to pass along to the artists.

But a source on the artists' side said that is an argument heard all too often in the music business.

Getting money out of the major labels is never easy, but given the industry's downward financial spiral it is exponentially more difficult now, the source said.

"The record labels are experts at transferring money around and putting the onus on artists managers to find it."

Irving Azoff, the legendary talent manager for The Eagles and Jewel, among others, echoed that sentiment.

"They will play hide and seek, but eventually will be forced to pay something," Azoff said. "The record companies have even tried to credit unrecouped accounts. It's never easy for an artist to get paid their fair share."

Reps for the three labels dispute the notion that they are withholding settlement money.

A spokeswoman for EMI said the label has started the process of "sharing proceeds from the Napster and Kazaa settlements with artists and writers whose work was infringed upon."

Warner Music's representative said the label "is sharing the Napster settlement with its recording artists and songwriters and at this stage nearly all settlement monies have been disbursed."

A Universal Music spokesman said the label's policy "is to share its portion of various settlements with its artists, regardless of whether their contracts require it."
This is the funnier one, the fact that the artists who they are defending, are not getting the money. Between the 2 of them, I am going to love to see what happens in the next few months!

Last edited by Xazy; 03-20-2008 at 12:21 PM..
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Old 03-20-2008, 08:20 AM   #2 (permalink)
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Interesting. And amusing. I've got several friends who will be VERY interested in this.....
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Old 03-20-2008, 08:31 AM   #3 (permalink)
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Phantastic! I can't wait until the RIAA's ability to attack supposed file sharers is suddenly and drastically reduced.
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Old 03-20-2008, 10:46 AM   #4 (permalink)
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your link to the 2nd article links to a tfp new thread window


fix it!
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Old 03-20-2008, 11:02 AM   #5 (permalink)
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Here's a link to the second article:
http://www.nypost.com/seven/02272008...ent__99428.htm
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Last edited by silent_jay; 03-20-2008 at 11:13 AM..
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Old 03-20-2008, 12:22 PM   #6 (permalink)
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Quote:
Originally Posted by Shauk
your link to the 2nd article links to a tfp new thread window


fix it!
Done, not sure how i messed up the cut and paste, but fixed.
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Old 03-20-2008, 01:25 PM   #7 (permalink)
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I'm on my way out the door for a bit, but have been aware of and following both of these cases. I will post my more in-depth thoughts on what exactly is going on here hopefully later this evening, but for now I just wanted to address this:

Quote:
Originally Posted by xazy
This is the funnier one, the fact that the artists who they are defending, are not getting the money
The RIAA doesn't defend artists. It defends labels, who claim to be acting in the artist's best interests.
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Old 03-21-2008, 02:28 AM   #8 (permalink)
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So it's no longer yesterday evening (clearly), but I did say that I'd offer my thoughts for any who care to hear them. Here we go.

First of all, since we're not in Tilted Music, I think a breakdown of the players in this little drama is necessary. First and foremost we have the RIAA.

The RIAA was formed back in the fifties, with the original stated goal of overseeing something called the RIAA eqaualization curve. The details of this get a bit technical, but the short version is that vinyl records record some frequencies better than others and a bunch of industry leaders got together to create a recording standard that helped address this; the RIAA was the body set up to govern that standard. One would think, then, that since the use of vinyl has declined drastically the RIAA would have outlived it's stated purpose, but as we all know that isn't the case. It almost did happen that way, but cassette recorders in the 80's gave the RIAA a new reason for being. Suddenly consumers had the power, in their homes, to create copies of the music they purchased. The big players in the recording industry (then collectively known as the "Big Six;" Sony, EMI, Polygram, Warner, BMG and Universal) were very upset at this new development, as those around for those days may recall. The argument they trotted out then and have ever since like a tired pony is that piracy takes away from their ability to promote and nurture new artists, leading to stagnation in the music scene. Anyone who can compare the music of the eighties to today's offerings, however, knows this is patently untrue.

And here we find two other players in our little act. The first is the labels. They make a big deal about representing the artist's best interests, but this is generally a lot of noise. In fact, it's been found that in something like 95% of the cases where the books have been audited, the labels haven't paid the artists all of the royalties owed. I think I've ranted and raved on this subject in the past, so suffice to say for now that the labels don't represent the artists; they represent the labels, and the artists have formed an uneasy partnership with them out of necessity.

So! Onto the two cases presented above. First there's the RIAA vs Ms. Anderson. The background here is that the RIAA sued a Ms. Tanya Anderson for filesharing and attempted to hold her liable for something like 1500 songs to the tune of $750 per song. Needless to say this adds up to a lot of dough, but it usually does. The RIAA's legal strategy is generally to file a suit for an exorbitant amount of money and then offer a much lower out-of-court settlement, The defendant, looking at paying $1m or more if they lose the case, usually takes the settlement. Ms. Anderson however, did not and further it became clear as the case developed that she had no interest in filesharing, nor the technical ability to do so. The RIAA dropped the case, but really by then it was too late. Tanya Anderson filed a countersuit and that pretty much brings us up to speed.

I for one have no sympathy for the RIAA on this. They've been running this campaign of intimidation for years now, and Ms. Anderson isn't the first to suspect that they've been using illegal methods to do it. It was more or less inevitable that they would be called to task on it sooner or later, particularly when a significant portion of their victims claim innocence of filesharing to this day. They've been relying on the fact that a $1.5-$2 million lawsuit is enough to cow most average citizens into taking the settlement of several thousand and thus avoiding the case ever going to trial. The larger implications of this are very difficult to predict until we know exactly what the RIAA has been up to and for how long, but it's certain not to turn out well for them.

The second case is interesting, because it highlights the problems that artists have when dealing with the Big Four. The problem is that in the artist/label relationship the label has traditionally held all the cards,but this is changing and quite swiftly at that. Something like 25% of all music sales last year were independent artists and that number is on the rise still.

So big changes in the music industry, highlighted by these two major cases. Labels either directly or through their pitbull of the RIAA are alienating consumers on one side of the equation and artists on the other; this is their way of dealing with the fact that they're pretty much redundant in today's music industry. Artists are able to produce independently and provide the results directly to consumers, meaning that the Big Four have become pretty much unnecessary. I don't pretend to know what's going to come next, but I have an idea that it's going to work out better for everyone than the current business model.
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Last edited by Martian; 03-21-2008 at 02:32 AM..
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Old 03-21-2008, 03:52 AM   #9 (permalink)
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Quote:
Originally Posted by Martian
The defendant, looking at paying $1m or more if they lose the case, usually takes the settlement. ... They've been relying on the fact that a $1.5-$2 million lawsuit is enough to cow most average citizens into taking the settlement of several thousand and thus avoiding the case ever going to trial.
Always sounded like extortion to me.

Quote:
Labels either directly or through their pitbull of the RIAA are alienating consumers on one side of the equation and artists on the other; this is their way of dealing with the fact that they're pretty much redundant in today's music industry. Artists are able to produce independently and provide the results directly to consumers, meaning that the Big Four have become pretty much unnecessary.
So they are banging two groups up the ass and only pretending to give one the benefit of the reach around? That is bad juju.

As for them becoming useless, yes. I have seen them becoming so for a long time. Until artists start releasing their music in lossless formats, I will still want the physical CD from the artists, though.

Hehe.
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Old 03-21-2008, 05:50 AM   #10 (permalink)
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Quote:
Originally Posted by Martian
So big changes in the music industry, highlighted by these two major cases. Labels either directly or through their pitbull of the RIAA are alienating consumers on one side of the equation and artists on the other; this is their way of dealing with the fact that they're pretty much redundant in today's music industry. Artists are able to produce independently and provide the results directly to consumers, meaning that the Big Four have become pretty much unnecessary. I don't pretend to know what's going to come next, but I have an idea that it's going to work out better for everyone than the current business model.
Yes, their claim that the artists are screwed and not making any money because no one is buying music.

Quote:
Nine Inch Nails Album Generates $1.6 Million in First Week
LINK
By Eliot Van Buskirk March 13, 2008 | 12:09:30 PMCategories: Digital Rights Management

Trying to find out how much money Radiohead made from the digital release of In Rainbows was like pulling teeth, but Trent Reznor has made no secret of how the Nine Inch Nails album Ghosts I-IV has sold. According to the band, 800,000 transactions generated $1.6 million in sales revenue in the first week of the album's availability, despite the fact that the 36-song version of the album is widely available on torrent sites.

Nine Inch Nails included free downloads in these figures, which are not being released to SoundScan in the traditional manner, according to Billboard.

Ghosts I-IV is currently the top-selling album on the Amazon MP3 store; again, Reznor paid approximately $38 to have it distributed there.
Quote:
Nine Inch Nails Free Download Experiment Nets Over $1.6 million

Band leader Trent Reznor now encourages user-generated videos for Ghosts I-IV album.
LINK
By K.C. Jones
InformationWeek
March 14, 2008 02:53 PM

Nine Inch Nails raked in over $1.6 million on their new album in the first week it was sold on the band's Web site, and now the band is trying another experiment.

Ghosts I-IV, released March 2, sold all 2,500 copies of its $300 Ultra-Deluxe Limited Edition on the first day. Sales of other packages, including partial album downloads, entire album downloads, hard copies of CDs, and a limited deluxe edition were also popular. In all, the band reported more than 780,000 downloads as of Wednesday. As part of an experiment in online music distribution, the band made the first nine tracks available for free and offered the entire 36-track album for $5.

"First of all, a sincere THANK YOU for the response to Ghosts," NIN front man Trent Reznor wrote in his blog Thursday. "We are all amazed at the reaction for what we assumed would be a quiet curiosity in the NIN catalogue. My faith in all of you has been restored"

Reznor encouraged fans to create videos to accompany tracks from the new album through YouTube. A panel of judges, including Reznor, will review the submissions and whittle them down to present those deemed the best during a virtual "film festival."

"This isn't a contest and you don't win elaborate prizes," Reznor explained. "It's meant to be an experiment in collaboration and a chance for us to interact beyond the typical one-way artist-to-fan relationship. We've discussed some interesting ways this could go, including multiple installments of the online 'film festivals,' to broadcast TV specials, to a one-time live performance of the entire Ghosts record with your visuals involved. It really depends on how this progresses and develops."

Fans interested in contributing can check out the official NIN YouTube channel and watch a video of Reznor explaining the plan. They can also watch the videos that have already been submitted (more than 30 in the first 24 hours) and view participation rules.
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Old 03-21-2008, 10:10 AM   #11 (permalink)
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Quote:
Originally Posted by Cynthetiq
Yes, their claim that the artists are screwed and not making any money because no one is buying music.
That's just it. The Big Four and the RIAA are making a stink about how album sales are down, which is true from the perpective of physical copies. But if we look at the music industry as a whole, including things like licensing, live performances and online distribution the music industry has never been doing better. Some people (myself included) are inclined to attribute this to filesharing, since it generates more interest in bands. iTunes isn't even the best possible market for this sort of thing but it's making money hand over fist right now, because Steve Jobs is one of the few people who have been able to get the Big Four to play ball. This whole head-in-the-sand approach they're taking isn't going to work and is ultimately more harmful to themselves than anyone else; if they were willing to roll with the punches so to speak and adapt to the new way of doing things they'd be fine. Whether or not they'll do this in the end remains to be see, but I certainly wouldn't be upset to see a larger number of independent labels taking their place.
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Old 03-21-2008, 11:58 AM   #12 (permalink)
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i laugh at both sides. consumers are idiots for illegally filesharing, and the labels are idiots for their stubborness in adapting new technology to their marketplace. i feel sorry for no one but the artists
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Old 03-21-2008, 12:30 PM   #13 (permalink)
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Quote:
Originally Posted by Derwood
i laugh at both sides. consumers are idiots for illegally filesharing, and the labels are idiots for their stubborness in adapting new technology to their marketplace. i feel sorry for no one but the artists
I'm not sure I understand this stance. For one, it seems that artists are actually benefitting from filesharing. If they can adapt to the new system (see Radiohead, Nine Inch Nails, etc) they have everything to gain from this. Further to that, it was filesharing that started the whole thing. If nobody had engaged in filesharing the labels wouldn't be under pressure like they are now and we'd still be using the same broken system that was in place before Napster reared it's head.

Filesharing is a medium. New media, when technology advances sufficiently to support them, demand to be used. Once computers and internet connections became fast enough to allow it, filesharing was an inevitability. It can't be litigated out of existence and it simply cannot be stopped. Further, there's no reason why it should be; filesharing networks are becoming the new radio stations, allowing bands to get exposure and build followings like they never could before. Look at the explosion of indie bands making good lately. Modest Mouse, Death Cab for Cutie, Arcade Fire, Bedouin Soundclash, the list goes on. Where a scant five years ago mentioning Pavement in a room full of people garnered nothing but blank stares, you are now almost certain to have at least a few people know what you're talking about. These bands are thriving and doing far better than they ever could have prior to the advent of a way to get their music out to the larger public efficiently.

I would argue that nobody deserves pity in this case, except perhaps the thousands of people who have been sued by the RIAA and forced to pay exorbitant amounts of money for crimes they may not have committed. The Big Four are reaping what they've sown, the consumers are doing what consumers always do and the artists have a chance at more success than was ever possible under the old system (discounting the top 5% or so, who as often as not achieved that status due to label practices rather than on their own merit anyway). The future of music may well be the punk DIY ethic taken to it's extreme, with bands forming small collectives and releasing their music online without any major label involvement whatsoever. At worst, I could easily see a large split in the power structure, with a large number of small labels producing music instead of a few very large ones. This is still better for everyone involved, since it promotes a healthy level of competition and gives the artist more choice in who they sign with, meaning they'll get a better deal than would otherwise be possible.

But, y'know, that's just my two cents and then some.
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Old 03-21-2008, 12:58 PM   #14 (permalink)
 
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i agree basically with martian, though my impatience with/about the dinosaur that is the riaa would have made me much less inclined to explain it as well.
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Old 03-24-2008, 06:44 AM   #15 (permalink)
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Quote:
Originally Posted by Martian
I'm not sure I understand this stance. For one, it seems that artists are actually benefitting from filesharing. If they can adapt to the new system (see Radiohead, Nine Inch Nails, etc) they have everything to gain from this. Further to that, it was filesharing that started the whole thing. If nobody had engaged in filesharing the labels wouldn't be under pressure like they are now and we'd still be using the same broken system that was in place before Napster reared it's head.

Filesharing is a medium. New media, when technology advances sufficiently to support them, demand to be used. Once computers and internet connections became fast enough to allow it, filesharing was an inevitability. It can't be litigated out of existence and it simply cannot be stopped. Further, there's no reason why it should be; filesharing networks are becoming the new radio stations, allowing bands to get exposure and build followings like they never could before. Look at the explosion of indie bands making good lately. Modest Mouse, Death Cab for Cutie, Arcade Fire, Bedouin Soundclash, the list goes on. Where a scant five years ago mentioning Pavement in a room full of people garnered nothing but blank stares, you are now almost certain to have at least a few people know what you're talking about. These bands are thriving and doing far better than they ever could have prior to the advent of a way to get their music out to the larger public efficiently.

I would argue that nobody deserves pity in this case, except perhaps the thousands of people who have been sued by the RIAA and forced to pay exorbitant amounts of money for crimes they may not have committed. The Big Four are reaping what they've sown, the consumers are doing what consumers always do and the artists have a chance at more success than was ever possible under the old system (discounting the top 5% or so, who as often as not achieved that status due to label practices rather than on their own merit anyway). The future of music may well be the punk DIY ethic taken to it's extreme, with bands forming small collectives and releasing their music online without any major label involvement whatsoever. At worst, I could easily see a large split in the power structure, with a large number of small labels producing music instead of a few very large ones. This is still better for everyone involved, since it promotes a healthy level of competition and gives the artist more choice in who they sign with, meaning they'll get a better deal than would otherwise be possible.

But, y'know, that's just my two cents and then some.
my point was only that people were knowingly engaging in an illegal activity. i wasn't judging filesharing one way or the other. people think that marijuana being illegal is ridiculous too, but you accept the risks of smoking/buying/selling it knowing it's illegal.
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