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RIAA Sues Limewire for $72 Trillion:
It may be the biggest example of why people don't trust alleged damages due to file-sharing in recent times. The Recording Industry Association of America (RIAA) is demanding $72 Trillion from the developers of Limewire. No, that is not a typo. The amount is $72 trillion.
One of the popular points being circulated about this is the value of the entire world economy. According to Wikipedia, the economy of the entire world is valued at $61.96 trillion (USD). I'll say this right off the bat. At this stage, it's much better to simply sue every one and every living thing on the planet at this point because they may have heard a song not authorized by the RIAA. I can only picture RIAA executives with their pinky fingers pointing to their evil grins when they asked for that sum of money. The report comes from NME which says:
In October 2010, Limewire was forced to shut down after a judge in the Federal District Court ruled that its main filesharing functions be disabled, but the RIAA is still actively pursuing its owners for damages. Given that the combined wealth of the entire planet is around $60 trillion (£38 trillion), the RIAA likely has no hope of securing this in damages, but believe this is what it is owed, reports Computerworld.com. In the suit, the RIAA says that given that the courts have identified over 11,000 songs as "infringed" material, and, as each song has probably been downloaded thousands of times, it should be compensated for each individual download. However, the presiding Judge in the case, Judge Wood, disagrees and has said that the music industry is entitled only to a "single statutory damage award from Defendants per work infringed" for several reasons, including one that suggests that any other decision could lead to "absurd results".
I think its pretty safe to say that just about no one is buying the number the RIAA presented here. Even if you are for suing every individual file-sharer on the planet, I bet you are scratching your head at how the RIAA came up with the value of $72 trillion. It makes zero sense to sue someone for more then the value of the entire planet. What's more is that this is the equivalent to suing every car manufacturer because the vehicles they produced and sold were involved in fatal crashes. It's not that the cars were defective in every instance, it's just that they produced the cars that were involved in the first place. That is why suing the creators of the file-sharing software also makes absolutely no sense in my mind. The only real message this is sending out to any innovators is that innovation - especially if or when it involves multimedia of any kind - is not welcome in America. If you create the next greatest thing, you better hope you do not live in America because the legacy corporations will hunt you down and make sure you spend the rest of your life in poverty because you had the audacity to invent something that may have upended their traditional business models. Either way, I think asking for $72 trillion in damages was completely stupid. Have a tip? Want to contact the author? You can do so by sending a PM via the forums or via e-mail at drew@zeropaid.com.
FCC Head Backs Internet Cable Usage-Based Billing:
If this is any indication of things to come, accessing the Internet could be a whole lot more expensive in the future. Julius Genachowski, Chairman for the FCC has come out in support of usage-based billing in the US for cable companies.
It's been a multi-year fight to maintaining network neutrality and keeping the ISPs in check to allow innovation to flourish online. Unfortunately, years of prosperity, American innovation and job creation on the Internet may be coming to an end thanks to a changing attitude at the FCC. MSNBC reports: "Usage-based pricing would help drive efficiency in the networks," FCC Chairman Julius Genachowski said on Tuesday, speaking at the cable industry's annual NCTA Show. Genachowski said usage-based pricing would also be fairer to users and would encourage competition. Of course, Slashdot pointed out the following:
He makes the claim that it would drive network efficiency. Currently most internet service providers charge a flat fee and price their packages based on the speed of the service, while wireless providers are reaping record profits by charging based on usage, similar to the way utilities charge for electricity. By switching to this model, the cable companies can increase their profitibility while at the same time blocking consumers from cutting the cord and getting their TV services online.
I think that this is a big reason why a lot of people were always against the idea of ISPs being owned by broadcasting corporations. If conglomerates were to exist, one of the fears it would lead to would be the prevention of the existence of third party businesses who create new business models more fit for the era of the Internet. For instance, if usage based billing were to exist right when YouTube first came on the scene as a big player in the Internet, consumers would consider YouTube to be far too expensive because watching those videos would rack up huge ISP bills. If ISPs exclude their own services from being counted towards a users metered Internet, then consumers would hardly have a choice which streaming service they would use in the first place. It's basically a choice between being charged a huge amount of money to access YouTube or pay a few dollars for the service provided by the ISP. What it is is straight up anti-competitiveness. There are numerous other ways usage-based billing would kill innovation online. For instance, new artists trying to get their music out for free. Some, such as myself, post their music on file-sharing networks. Others post their music on a variety of free music hosting websites such as SoundClick. If downloading that song costs $1.50 in bandwidth whereas buying the same song on an ISP service costs 99 cents, then the new artist doesn't stand a chance because it's more expensive for consumers to get that song for free and the artist winds up getting ripped off by the ISP in the process. It would also contribute to the killing of projects such as Folding@Home, an project that searches for the cure for diseases such as Alzheimer's and Cancer. If running this software ends up costing $20.00 per day thanks to the bandwidth it uses, then far fewer people would be willing to donate those extra cycles to curing disease. There's also the Open Source movement that this sort of thing would hurt. A number of Linux operating systems distribute ISOs which can be anywhere between hundreds of Megabytes to a couple of Gigabytes. If the bandwidth used to obtain these ISO files now becomes expensive, it could be a discouraging factor for those thinking of switching from, say, Windows to Linux. Small businesses who develop video games could also be harmed by usage-based billing. What users see now is just how much that small company is charging for that video game. If usage-based billing comes in to play, then that consumer has to think, "OK, the developer is charging this much money and the ISP surcharge for this is this amount of money... do I still want to buy this game?" I could go on and on with examples of what kind of damage usage-based billing could do. Bottom line is that it harms innovation, it harms small business, it harms competition, it harms the economy and it harms society. I, for one, hope that this is as far as the FCC ever gets in allowing usage-based billing. Have a tip? Want to contact the author? You can do so by sending a PM via the forums or via e-mail at drew@zeropaid.com.
Romanian Prime Minister on ACTA – ‘We will not ratify it’:
The hits to the Anti-Counterfeiting Trade Agreement (ACTA) keeps on coming. Today, we have learned that the Prime Minister of Romania has said that unless significant changes happen to ACTA, the country will refuse to ratify it.
ACTA has been dealt with a number of blows in recent weeks. A week ago, amid indications that the European Union will not vote favorably for the international agreement, ACTA officially headed to the European Court of Justice to determine, among other things, whether or not it violates fundamental rights in the continent. Last Friday, the agreement received another blow in the United States. 50 law professors examined the legalities of the agreement and said that, among other things, the USTR may not have legal authority to represent the US in the negotiations and that the President does not actually have the authority to merely sign the agreement to make it law. Little wonder why Michael Geist told ZeroPaid on Monday that "ACTA may ultimately be seen as a failed treaty exercise." This is not the end of the bad news for proponents of ACTA. The Romanian Prime Minister recently went on record citing privacy rights as a reason for not ratifying the agreement.
“We will not ratify it until the European Parliament brings modifications that ensure, as is right, the protection of intellectual property rights, but also that the right to private life is not breached. The moment when internet providers are allowed to go into my e-mail address, read my messages, this is something I do not wish for myself, and I do not wish on any Romanians,” said Ponta for the Antena3 Channel.
Michael Geist notes that since the European Parliament does not have the power to modify the agreement, that means Romania will never ratify the agreement. Earlier this year, Poland had second thoughts on ratifying ACTA which made observers feel that ratification of ACTA in Europe may be in doubt. Given the kind of threat ACTA poses to everyone, I personally hope that this is a trend that will continue until the agreement becomes nothing more than a piece of paper. Have a tip? Want to contact the author? You can do so by sending a PM via the forums or via e-mail at drew@zeropaid.com.
MPAA Lobbying for SOPA 2.0 by 2013?:
A report has surfaced saying that the MPAA is lobbying to have the sequel of SOPA in place by 2013. This comes as a result of comments made by Chris Dodd.
SOPA may have been the one bill that united the entire internet, sparked unprecedented outrage and aroused a whole new level of awareness for how the US government is trying to control the Internet. Never before did the Internet protested the way it had with major websites like WikiPedia, Reddit and, well, almost a who's who list of every major website that showed some form of opposition to the legislation. We here at ZeroPaid were a part of that decisive bit of history in protesting the legislation that would have forever altered and destabilized the Internet as we knew it. The opposition was so fierce, the US government was forced to shelve the controversial legislation. While there may have been a period where people were relieved that the Internet was saved, this period may be coming to a close. The Daily Dot is reporting that the MPAA is hoping to have a sort of SOPA 2.0 put together by 2013. From the report:
Dodd, the CEO of the Motion Picture Association of America—Hollywood’s lobbying arm, as well as a major proponent and lobbying agent for SOPA—was quoted Saturday referencing his eagerness to directly lobby Congress for a new copyright bill on the MPAA’s behalf. "I can't say anything to them about this for another seven months, but I think my colleagues understand how important this is," he said in an interview with Variety. Dodd has to wait until January to personally lobby members of Congress. For 30 years, until he assumed leadership of the MPAA in 2011, he was a U.S. Senator from Connecticut. Ethics regulations prohibit him from making deals with Washington until two years after his departure. The only other hint Dodd left about the next SOPA is that the MPAA will no longer try and equate Web piracy with physical theft, a notion widely mocked online. "We're going to have to be more subtle and consumer-oriented," he said. "We're on the wrong track if we describe this as thievery."
The source of this comes from an article on Variety which also comments:
He said Saturday that the industry will need to take a far more nuanced approach to promoting future antipiracy legislation. "We're going to have to be more subtle and consumer-oriented," he added. "We're on the wrong track if we describe this as thievery." Dodd retired early last year from three decades in the U.S. Senate, so he's precluded from lobbying his colleagues on industry issues on Capitol Hill until January. "I can't say anything to them about this for another seven months, but I think my colleagues understand how important this is," he said.
It's pretty easy to see how one can interpret this as an indication of not only that a new piece of legislation is coming, but also gives a vague timeline. I suspect a little too much was said here, but it is a good indication that few lessons may have been learned. I mean, its easy to argue that the DMCA in its original form when passed was not consumer oriented, but by today's standards, that is, frighteningly enough, fair on both sides by comparison. At this point, I have yet to see a three strikes policy or a censorship policy that is even remotely close to striking any sort of balance. It's always been a sort of "big legacy multinational corporations first, everyone else last" approach. The only thing that has stopped some of these sorts of policies were judicial or constitutional safeguards put in place for the purposes of preventing abusive laws. One thing I can pretty much guarantee in this though is that if SOPA 2.0 appears in 2013, f it simply fails to strike any sort of balance, and if it is just as dangerous as before, the Internet will stand up much like what happened in the previous iteration of SOPA that was so handily defeated by the people before. Have a tip? Want to contact the author? You can do so by sending a PM via the forums or via e-mail at drew@zeropaid.com.
Lawyer for Film Producer Threatens TechDirt with Legal Action:
A rather unusual story has surfaced recently. Apparently, a lawyer representing the producers of the motion picture, “Mary, Mother of Christ” is threatening legal action against the news site TechDirt. We took a look at what happened and couldn't really find anything that would reflect poorly on TechDirt.
The story starts an article that was published on TechDirt saying that the government is somehow receiving 10% royalties for a film that is to be produced. Shortly after, TechDirt received a legal threat saying that the article was defamatory and that the damages would run in to hundreds of millions. Apparently, there are two sources of contention that we verified by reading the letter included in the article. The first was the headline in which someone involved was called a "drug smuggler". Apparently, it was more accurate to say that the person in question was a "Mexican Drug Cartel Money Launderer" (which the article's headline now reads). The second main source of contention was the alleged accusation that drug money was involved with the film somewhere along the line. We looked at the article in question, trying to find where TechDirt said that. We really couldn't find any comment in the TechDirt article that said that. Unless the current version online now is vastly different from the original version (which, we have no evidence of outside of the change in the headline), then we are unsure where the accusation came from. If you read the articles though, the details of everything, it is, at least for me, an extremely confusing affair. As I'm reading these, I find myself thinking to myself, "OK, so someone wrote a script, but then got extorted out of it, then the government gets involved, it's discovered that there is an association with a Mexican drug cartel money launderer, then TechDirt comments on this, but that sparks an accusation of defamation from the film producers- wait, I'm confused." I have to be honest, I've read scholarly papers and complex legislation in the past and some of these weren't anywhere near as complicated as this. Of course, this does spark a question in my mind. If sending in the lawyers in something like this isn't the best first step, what is? So, hypothetically speaking, lets say a website said that Drew Wilson has stuffed a dozen sugar plum fairies in a bag and stuffed it in the attic. Of course, I know this is untrue, but this website is claiming that. The first step that comes to my mind is contacting the author of that story and saying that this is not the case and I don't have any sugar plum fairies in my possession to begin with. What if the author doesn't respond to the e-mail and refuses to change the article? Well, if nothing happens in a week, I would contact the editor and just politely explain what happened, and why I dispute the fact and why I want my side of the story on the site as well. What if the editor refuses to acknowledge me and the article is unchanged? the next step is to see if anyone else is republishing the article. Is it spreading like wildfire or is no one else really noticing? If no one else is really noticing, then I'd personally just drop the whole thing and move along. If people are making entire memes on it and it's on every major news outlet you can think of and it's really hurting my reputation, then I'd contact some of these sites to get my side of the story out there. Chances are, someone will be willing to listen somewhere along the line. Sure, one could refine this plan and make it better or go for a completely different approach that would work as well, but I think it's still leaps and bounds better then the plan of someone publishing incorrect comments about me and just immediately sending in the lawyers right off the bat. We're not aware of any indication that the lawyer in question is pressing ahead with legal charges at this stage or any update beyond the two articles. Still, I think it highlights what is so dangerous about being in the journalism business in the first place. There's pretty much no telling whether something you say is groundbreaking and important or randomly landing you in legal hot water somewhere along the line. Have a tip? Want to contact the author? You can do so by sending a PM via the forums or via e-mail at drew@zeropaid.com.
Facebook for Google+: Chrome Extension Adds Facebook Stream to Google+:
Extension for Google Chrome browser allows you to add your Facebook Stream to Google+, putting two of your news feeds for the popular social networking sites in one location.
Google+, recently redesigned to be "more functional" and "flexible," also has the help of a new Chrome extension called Facebook for Google+ that adds a user's Facebook stream to their Google+ profile. Instead of having to switch abck and forth between the two sites a users only has to visit one. In the past I've mentioned Gooce+, the Chrome extension that combines your Facebook, Linkedin, and Twitter feeds with your Google+ stream, and my personal favorite, Start Google+, the Chrome extension that combines just your Facebook and Twitter feeds with Google+. Facebook for Google+is even simpler, adding just your Facebook feed. Notice the new Facebook icon that appears on the left-hand side. You can like or comment on pics and status updates as though you were on the full Facebook.com, site. You can update your status (which you can delete if you decide to do so). So there you have it. With Facebook for Google+ you only have to visit one site and can spend the time you save on more important things like Twitter. Stay tuned. jared@zeropaid.com | @jaredmoya Download Facebook for Google+
Tenenbaum Verdict Stands as Supreme Court Refuses to Hear Case:
It's a verdict several years in the making. Now, the Supreme court may have put an end to one of two file-sharing cases to have ever made it through the court system without a settlement. Joel Tenenbaum appealed to the Supreme Court in a final move to try and reduce the fine, but the court has said "no".
In 2009, Joel Tenenbuamn was fined $675,000 for sharing 30 works. Last week, Tenenbaum appealed to the Supreme Court. Through the appeals process, the award was slashed to $67,500. Now the Supreme Courts has made a decision and that decision is to refuse to hear the case without comment, letting the fine stand where it's now at. Wired's Threat Level contains some extensive coverage of the case. Here's a snippet:
The Obama administration argued in support of the original award, and said the trial judge went too far when addressing the constitutionality of the Copyright Act’s damages provisions. The act allows damages of up to $150,000 a track. The appeals court agreed with the government, and said the judge should have considered reducing the jury’s verdict under what is known as “remittitur.” That is a little-used power beholden to judges, and they assert it without considering the constitutional basis of the original award. [...] If any of that sounds familiar, the same thing happened in the nation’s first jury trial against a file sharer, Jammie Thomas-Rasset. That case has morphed into a Groundhog Day of sorts for the same reason. After a third trial in that case, U.S. District Judge Michael Davis of Minnesota slashed a jury award from $1.5 million to $54,000 for sharing 24 songs on Kazaa.
So, it sounds to me that, at least as far as the US is concerned, the potential fine for each unauthorized song is $2,250. Since there is so much precedent for this now, I would imagine it would be difficult to really get anything other then that particular amount. What i think is disappointing is knowing that there was some compelling arguments to have the fine further reduced. One argument that comes to my mind was the fact that each song can be sold on iTunes for 99 cents. It's a little difficult to justify a fine of thousands of dollars with that in mind. I would further add that you could buy an entire music production studio for less then that. For example, Fruity Loops Studio (software I personally have used to produce music) is currently being sold for as high as under $950. That still leaves over $1,300 to pay for plugins and sample kits (and believe me, depending on how you choose to spend your money, you can really stretch the dollars and buy quite a bit of content for $1,300 (I mean, not going crazy and buying rather expensive content like EastWest for instance). You could easily plan your way through buying all the virtual software used to make that one song in the first place. Whats worse is that you can re-use that stuff to make a second song which would, of course, double the amount of money you could play with. I think this highlights just how extreme these fines are even though they were reduced from an even more absurd level. Of course, I can accept the argument that this now legally no longer matters in the US and it's definitely plausible that the record labels have moved away from litigation more these days anyway. Still, just because a court says that a song is worth an astronomical $2,250 doesn't mean that I will personally agree with it. (Hat Tip) Have a tip? Want to contact the author? You can do so by sending a PM via the forums or via e-mail at drew@zeropaid.com.
ZeroPaid Interviews Michael Geist:
One of the many things we are tracking here at ZeroPaid is the developments of the Canadian copyright reform legislation. So, we decided to talk to Michael Geist, one of the leading experts of copyright, the internet and digital rights in Canada.
If you've looked at things like Canadian copyright reform, you've very likely heard of Michael Geist. He's a very well known law professor from the University of Ottawa and posts regularly to his blog at michaelgeist.ca. For me, his blog is one of the sites I read on a regular basis to keep me informed of some of the things that are happening in Canada. Since Canadian copyright reform is one of a number of topics making headlines, we felt it was time to interview Geist on a variety of topics related to copyright. So, without further delay, the interview with a man that really needs no introduction: ZeroPaid (ZP): We've both been watching Candian copyright reform for quite some time now. One of the things I've noticed was that ever since the incident with Sam Bulte and the "pro-user zealot" comment was that it seemed to set up some sort of battle line that pitted Canadians against the government which was followed through in successive governments and successive copyright reform bills that was very one-sided in favor of major corporate interests. Based on what you've seen, would you say that this may have made Canadians cynical about the Canadian government and copyright reform? Michael Geist (MG): I think the situation is a bit more nuanced than the question implies. On the issue of digital locks, the answer is yes. I think many focused on digital locks as their key concern and have been left very frustrated by the government's unwillingness to even consider modest reforms to its approach. Having written multiple times to their MPs, they are left somewhat cynical with the process. However, the Canadian copyright reform proposals have improved over time, due largely to those same voices. Digital locks may have been lost, but with the expansion of fair dealing, notice-and-notice, UGC, new consumer exceptions, and statutory damages reforms, the bills have changed and they aren't totally one-sided. ZP: With all the iterations of copyright reform up to this point, do you have any general comments on what sort of trends you've noticed in the legislative process? Do you think that the fact that Canada had so many minority governments in a row may have altered the course in copyright reform? MG: See above. I think we've seen digital locks remain unchanged due to US pressure, notice-and-notice unchanged due to the influence of telcos, and many other provisions shift due to the increasing interest and engagement of the public on copyright. ZP: One of the trends I've noticed in your commentary in the more recent iterations of copyright reform was the comment that the bills are "flawed, but fixable". Would you say there are some elements in the legislation that has really been stuck in neutral and have there been things that have been fixed more recently? MG: The digital lock rules were the big flaw and they were not changed. The fact that the government stuck with some of the positive elements of the bill (noted above) and rejected calls for website blocking or increased subscriber information disclosures is a welcome development. ZP: There are Canadians that have reasons to be up in arms over the most recent version of copyright reform bill. Yet, I've been looking around the world and seen some pretty dramatic trends. There's been cases where ISPs are ordered to censor websites. There's been three strikes laws being put in place in countries like France and the UK. There's also the cases of Jammy Thomas and Joel Tenenbaum getting fined hundreds of thousands or even millions of dollars for the simple act of sharing a handful of songs. Compared to some of the things happening around the world right now, are Canadians getting a good deal with the current version of copyright even though there are flaws in it? MG: Again, it's nuanced. Other countries have done much better on digital locks. On many other issues, the Canadian bill is better than what is found elsewhere. ZP: Some people might be wondering, Canada has spent about 7 years trying to pass a main copyright reform bill. Do you think that this is it, that chances are very good and this is the one that will get passed? MG: Absolutely. It will be passed by the summer. ZP: Over the years, there's been quite a rise in international closed-door agreements such as ACTA and TPP that are currently in negotiations. Looking at the current copyright reform bill, are there provisions that make it easy to just implement these newer international agreements or are those provisions more directed at previous agreements like WIPO? If the agreements can't be implemented through the bill, how would ACTA or TPP be implemented into Canadian law (what's the general process for something like this)? How likely is Canada going to be implementing ACTA considering the fact that it seems likely to not be ratified in Europe? Also, Canada isn't really involved in the main negotiation process of TPP. If Canada is asked to implement provisions of the TPP, would it be different then, say, ACTA given Canada's status in the agreement? Finally, what can Canadians do if/when Canada is asked to implement agreements such as this if they object to them? MG: Lots of questions here. I do not think C-11 would allow Canada to ratify ACTA right now as there would need to be additional legislative changes. There is a bit of copyright fatigue right now, so I don't think another bill is imminent. That said, the current Industry Committee hearings on IP may be intended to lay the groundwork for future reforms. Moreover, with the opposition in Europe, Switzerland, and elsewhere, ACTA may ultimately be seen as a failed treaty exercise. As for TPP, it's harder to say. First, we're not even part of the negotiations and the US doesn't want us in. Second, the IP chapter is still under negotiation. One treaty you haven't mentioned with a more immediate impact is CETA. Those negotiations may conclude this year and could have significant IP implications. --- ZeroPaid would like to thank Michael Geist for taking the time out of his busy schedule to talk to us. We will certainly be looking more closely at CETA in the future. If you have a recommendation on who to interview next, feel free to suggest it in the comment section below or through the usual methods of contacting me. Have a tip? Want to contact the author? You can do so by sending a PM via the forums or via e-mail at drew@zeropaid.com.
Viddy: Simple Way to Capture, Beautify, Share Videos on Your iPhone:
Free IPhone app allows you to add visual effects, music, transitions, and even movie stars to your videos, and then share them with family and friends with a single click on Facebook, Twitter, YouTube, Tumblr, and more.
Viddy is a free iPhone app that offers users a simple way to capture, beautify, and share videos with family and friends on a number of social networking sites, including Facebook, Twitter, YouTube and Tumblr. I've already mentioned Socialcam, another free iPhone app for sharing videos, along with several articles covering top Camera apps for the iPhone, but Viddy is sure to please users with one-click video sharing. "Viddy is a simple way for anyone to capture, produce, and share beautiful videos with the world," say the app's developers. "Record a moment of your life, give it that cinematic look with our production packs, and share it with those who matter most." Take a picture. Add visual effects, music, transitions, and even movie stars. Adjust your pics using advanced options like focus, exposure, white balance, audio metering, timer, and more. Lastly, click the "Share" button to share your video with family, friends, or the whole world on Facebook, Twitter, YouTube, Tumblr, or other social networking sites. Stay tuned. jared@zeropaid.com | @jaredmoya Download Viddy (iTunes)
What Filesharing Studies Really Say – Conclusions and Links:
We've just finished out lengthy series on what file-sharing studies really have to say about file-sharing. The series has drawn quite a lot of attention, so, we felt the need to cap off this series with some final thoughts and a list of links to all the studies and more.
First, for those wanting a complete list with sources, here it is: (We would like to note that our sources of these studies very likely differs from the ones mentioned below) Part 1 - Litigation a Failure?: Study: Impact of Legal Threats on Online Music Sharing Activity: An Analysis of Music Industry Legal Actions Year: 2006 Journal: Journal of Law and Economics Source (PDF) Part 2 - P2P Has No Effect on Music Sales Study: Don’t blame the P2P file-sharers: the impact of free music downloads on the purchase of music CDs in Canada Year: 2010 Journal: Journal of Evolutionary Economics Source (Paywalled) Part 3 - RIAA Suppresses Innovation Study: How industry associations suppress threatening innovation: the case of the US recording industry Year: 2011 Journal: Technology Analysis & Strategic Management Source (Paywalled) Part 4 - MPAA Preserving its Oligopoly Study: Hollywood versus the Internet: the media and entertainment industries in a digital and networked economy Year: 2006 Journal: Journal of Economic Geography Source (Paywalled) Part 5 - Producers Lose Less Than $2 Per Album Study: Music file sharing and sales displacement in the iTunes era Year: 2010 Journal: The Wharton School, University of Pennsylvania Source (PDF) Part 6 - Lower Prices, Not Enforcement is Key Study: Unauthorized file-sharing and the pricing of digital content Year: 2004 Journal: Economic Letters Source (Paywalled) Part 7 - Piracy Increases Producers Profits Study: Turning Piracy into Profits: a Theoretical Investigation Year: 2010 Journal: Department of Economics of the University of Bologna Source (Paywalled) Part 8 - Supply of Music Has Not Shrank Because of Napster Study: Bye, Bye, Miss American Pie? The Supply of New Recorded Music since Napster Year: 2011 Journal: The Carlson School and Department of Economics University of Minnesota and NBER Source (PDF) Part 9 - 'Graduated Response' Laws Failed to Strike a Balance Study: Toward a Regulatory Model of Internet Intermediary Liability: File-Sharing and Copyright Enforcement Year: 2011 Journal: Northwestern Journal of International Law & Business Source (Paywalled) Part 10 - FileSharing's Growing Popularity Study: A View of the Data on P2P File-sharing Systems Year: 2008 Journal: Journal of the American Society for Information Science and Technology Source (Paywalled) Part 11 - Public Performance Profits Skyrocketing Study: Supply Responses to Digital Distribution: Recorded Music and Live Performances Year: 2005 Journal: Source (Free to view!) Part 12 - Media Industry Must Adapt Study: The Impact of Illegal Peer-to-Peer File Sharing on the Media Industry Year: 2010 Journal: California Management Review Source (PDF) Part 13 - Lower Prices Decreases Filesharing and Increases Sales Study: Estimating consumer preferences for online music services Year: 2010 Journal: Applied Economics Source (Paywalled) Part 14 - File-Sharing Litigation Never Worked in Asia Either Study: A Legal and Cultural Comparison of File-Sharing Disputes in Japan and the Republic of Korea and Implications for Future Cyber-Regulation Year: 2008 Journal: Colombian Journal of Asian Law Source (Paywalled) Part 15 - People Who Download Buy More Study: Measuring the Effect of File Sharing on Music Purchases Year: 2006 Journal: Journal of Law and Economics Source (PDF) Part 16 - Focus on Adaptation, Not Shuttering P2P Study: Peer-to-Peer File Sharing and the Market for Digital Information Goods Year: 2010 Journal: Journal of Economics & Management Strategy Source (PDF) Part 17 - Culture and Ethics of FileSharing Study: Ethical Decisions About Sharing Music Files in the P2P Environment Year: 2008 Journal: Journal of Business Ethics Source (Paywalled) Part 18 - Yet Another Study Recommending Adaptation Study: Investigating the User Behavior of Peer-to-Peer File Sharing Software Year: 2011 Journal: International Journal of Business and Management Source (Free to view!) Part 19 - Biggest Threat to the Recording Industry? The Recording Industry Study: The Music Market in the Age of Download Year: 2007 Journal: Fondazione Eni Enrico Mattei Source (PDF) We should also point out that the 20th study that was found in the initial sweep of searching for studies was already previously covered here on ZeroPaid. That study found that losses due to file-sharing are statistically indistinguishable from zero. You can find a copy of that study in full by following the links. We would also like to add a few more studies that was previously covered here on ZeroPaid. One study we covered in 2010 which file-sharers are big content spenders. Another study which corroborates with another study in our series said that former Mininova users flocked to other sites after it went legit. An additional study in 2010 said that artists revenues were up 66%. In 2009, a study found that artists earned more in a file-sharing world. So, the total here is 24 studies. Claims and Facts About File-Sharing Since this series was a response to a study used to promote SOPA, we decided to revisit out article to look back at some of our immediate responses to it in light of this large amount of data. Claim: One of the claims the Phoenix study that we picked up was that finding a legal framework to stop infringement online has proven to sell politically. Fact:: After our extensive review, we found that, even though there is fierce opposition towards laws such as SOPA and any form of graduated response, the problem isn't actually political. The problem is that there is no scientific basis for laws such as a "graduated response" or censorship of the Internet. After we examined the studies, there was a general theme that the best approach to dealing with file-sharing was not legal enforcement, but rather, a change in a business model that's adapted to today's digital reality. If you wanted to find debate where there was no real consensus, then it's exactly how the industry is suppose to adapt their business model to the digital environment. While many pointed to price point, some suggested trying to find other ways of selling music like what iTunes has done. In fact, one study suggested that enforcement does not bring back customers by itself, but rather, building a model that is actually palatable so the customers return to you more voluntarily. Even the most pro-enforcement study we came up with said that if you're going to actually do something like litigation, build a better business model as well, but simply resorting to legal tactics against file-sharers is not necessarily a good idea. Claim: Another claim the Phoenix study made was that (in the process of disagreeing that there is a difference between a physical stolen piece of property and an unauthorized download) there is no incentive for producers and artists to make music. In addition, because of the activities of file-sharing, there will be less creative works made available. Fact: Let's cut to the chase. Part 8 of our series explicitly debunked the claim that file-sharing causes the decrease in quantity of music. The authors of that study explicitly state that they found no evidence of any kind that linked any decline in the quantity of music and file-sharing. If there was any decline that happened during the existence of file-sharing, the decline was merely a continuing trend since before Napster. In addition, numerous studies point to the trend of an increase in profits for artists both before this series and during this series thanks to the sampling effect. In fact, the only evidence that file-sharing is even hurting artists at all points out that it's only the super rich and super famous top acts in the entire industry that may suffer any sort of loss at all (as seen in part 19 of our series). Again, as far as our series and the previous studies are concerned, not true at all. Claim: File-sharing displaces legitimate sales. The evidence points to that. Fact: This is a classic case of error by omission. What we found in our investigation was that there are numerous reasons why music sales were in decline in the early 2000's other than the existence of file-sharing. Explanations included an increase in other entertainment sectors, the unbundling of the music album and returning to the singles model (re: the comments of deadweight losses) and an increasing pressure of the consumers bottom line in the face of todays economic realities. So, judging by the evidence we've collected, the evidence does not point in the direction that file-sharing, in and of itself, displace sales, but rather, other factors would also play a role in displacement of sales. Claim: Since people can enjoy music that they downloaded, they are taking away from society and therefore placing a tax on society which means file-sharing must be stopped. Fact: This model, when compared to all of the models we've seen, is completely out to lunch. There's been plenty of calculations and economic models and non of them say anything like this. The closest we can recall in our series was Part 5 in our series which used the flawed theory of 1 download means one lost sale. While the models suggest that consumers do get something out of downloaded material, the losses still only account for less than $2 per album. Claim: The losses experienced by the entertainment industry is entirely the fault of file-sharing (one of the studies cited in the Phoenix study, not the model itself) Fact: There are way too many market variables to make such a claim. In fact, to put the entire blame of losses in the industry on file-sharing is completely unfounded. As we already discussed in our wrap-up, not only are there other explanations for any possible losses in the music industry, but there is also a well known and well-documented effect of an increase in music sales thanks to file-sharing. Claim: The debate should move forward on how to stop file-sharing and online copyright infringement and that we should "discount the argument that on-line theft of IP causes no harm and therefore no foul." Fact: Trying to legislate your way out of this in ways specifically designed to hamper file-sharing was resoundingly rejected in the studies we looked at. This is merely a business problem, not a legal problem. Even the litigation tactics was, for the most part, discounted as a failure. At best, litigation would only work if there was a viable legal alternative to file-sharing (something that has yet to emerge). In fact, one study specifically looked at the "graduated response" laws (Part 9) and found that, while in theory, it's a good idea, in practice, they are unfairly favoring the industry and that they lack any consumer protection at all (i.e. protection against false infringement claims). I think if you asked these researchers that looked at file-sharing before 2008, none of them would have said that we should be blocking websites and instituting a three strikes law. In fact, some would have said that there would be technological and innovative damage done in the process. Additional Observations In addition to the above, I think it's fair to say that, going from one study to another, you get that sense of "litigation fails", "industry should innovate", "focus on price", "innovate", "price", "price", "innovate", "innovate", "innovate" and then contrast it to what the industry is actually pushing (i.e. three strikes laws and massive censorship), you can almost get that sense that the reaction in the education community would be "now where did that come from?". You barely, if at all, even get a sense that this is where things should be headed when reading these studies. It's like these ideas were either completely out of the blue or as a result of ignoring sound science into these matters. Based on all the scientific reasoning, scientific predictions and models and a whole lot more that we got from this series, we shouldn't even be anywhere near the kinds of debates we are having now with respect to copyright enforcement (yes, not even close). Instead, we should, at minimum, be seriously considering things like an ISP levvy or creating a framework for legal file-sharing or trying to think of services that imitate the file-sharing structure to help artists and the industry make money. It's like we've shunned all science and economics and headed down the road of trying to constrain, restrict and, in some ways, shut down the Internet instead. It really puts into perspective just how shocking idea's like the "graduated response" or three strikes laws and censoring websites really are. Also, on a personal note, this study required a substantial amount of hard work. So, if you want to conduct your own research on the sort of magnitude on something like file-sharing, think to yourself if you've studied through research papers before. You will find things you don't understand in research papers and studies unless you focus exclusively in a field of your expertise (and even the, the chances are pretty good that you'll find something you won't immediately understand). I hate to discourage anyone, but this kind of thing is not for the faint of heart. Even I, someone who has read through numerous research papers and studies, was really pushing myself throughout this series. Having said that, if you can stomach a large quantity of heavy reading, I think you should be encouraged, if you are able and have access, to find your own research on the topic of file-sharing. Don't take my analysis, but rather, take the comments made by the papers themselves and try and do some note comparisons to verify the general ideas of what they are saying. That's the point of a scientific approach - testing everything to make sure they are accurate. In following the notions of science, we chose to use multiple studies instead of a select few. The reason for this is that we can have a sense of redundancy to make sure that what we were saying was reasonably accurate. If you can have five different ways of measuring a certain economic problem and come to a general consensus of a few basic facts, then you increase your chances of being accurate. Can you test something multiple times and come to the same or very similar conclusions about a question? I think that is a very scientific question and one we more or less used when approaching the issue of file-sharing in this series. Even if there were mistakes along the way on a specific study in this series, the consensus of facts can overcome such issues. In this series, I think we can establish some basic patterns of facts and I don't think our conclusions about file-sharing are (if they are off to begin with) that far off at all. Based on my reading of these studies and my years of experience, I think the industry should be focused on making profits, not problems. Have a tip? Want to contact the author? You can do so by sending a PM via the forums or via e-mail at drew@zeropaid.com.