The following is an edited transcript from an online chat with Cary Sherman, president of the Recording Industry Association of America. The session allowed reporters from college newspapers the opportunity to ask Sherman questions regarding the RIAA's recent lawsuits against many college students.
Before answering any questions, let me try making some introductory remarks. First, let me thank you for inviting me to participate in this online chat. I think it's essential that the higher education community have a complete understanding of what we're about on the online piracy issue and why we're taking the actions we are. Ever since mp3s became a popular format, we've all wanted a really vibrant online music experience. I'm really pleased that the online music services available today provide just that great quality, great selection, reliability, security, and compensation to the artists, songwriters and others who brought that music to life. Whether it's iTunes, or Rhapsody or Napster 2.0 or Musicmatch or MusicNow or buymusic.com, or as of yesterday, WalMart, all of these services are offering great new ways for fans to access the music they want, and to gain exposure to new artists and new music with recommendation engines, liner notes that dig deep into the music, and other great features. Launching these services requires a serious investment. Very few companies would invest the dollars and effort necessary if they're competing with stolen copies of the same music they're trying to sell. That's why we have been trying to do something about the piracy problem online.
For music fans to get the online experience that the Internet can deliver, there needs to be an environment in which legitimate businesses can flourish. That means bringing piracy under sufficient control that it doesn't hurt the prospects for legal e-commerce. we've devoted a lot of energy to educating the public that uploading and downloading copyrighted music online without authorization is illegal, and hurts the people who make the music. But illegal downloading kept growing, and legitimate sales kept declining. We lost about a third of our sales in just 3 years. Record stores were closing by the thousands (and stores near college campuses were especially hard hit). Thousands of label employees lost their jobs. Artist signings plummeted. And songwriter royalties were half of what they had been. We felt we could not stand by and watch while an entire industry the most vibrant music industry in the world was being downloaded to death. And that's why we launched lawsuits against the individuals who were distributing hundreds and even thousands of copyrighted music files to millions of anonymous strangers.
Let's begin with the big question that's on everyone's mind. Your organization made significant news yesterday. Why has the RIAA chosen to pursue users of college and university computer networks as part of its anti-piracy efforts? And why now?
Obviously, college students are a big part of the problem, and therefore it was only a question of time before university users would be named as defendants. That's what happened yesterday. And we hope that it will send a message to students across the country that this activity is illegal and that engaging it can have consequences.
Is there a specific fine in these suits?
The copyright law provides for "statutory damages" ranging from $750 per work to up to $150,000. Those are damages that can be assessed by a court and paid to the copyright owners whose works were infringed. It's up to a court to set the amount.
Why are college students "obviously" part of the problem?
Think about it -- how many people that you know on your campus aren't trading music files on P2P networks? College campuses have been a very attractive place for file-sharing because of free and unlimited bandwidth. Statistics posted by universities about the usage of their networks confI'ms that 60-70% and more is being consumed by file-sharing. And record stores near college campuses have been complaining loudly about the impact of illegal downloading on their businesses.
With these most recent "John Doe" lawsuits, ISPs -- including universites -- will theoretically be compelled to reveal the identities behind the IP addresses, as is the case with your subpoena to the University of Michigan. Do you expect any resistance from either ISPs or universties to this approach? Do you think that this is the sort of scenario that will result in a legal challenge to the Digital Millennium Copyright Act?
The DMCA is not involved in this process. This is just an ordinary lawsuit which is filed against an unknown defendant. The courts have handled this process for years and there have rarely been disputes about how to do it.
Where can we get the actual list of specific IP numbers being submitted to these schools? Or are those public yet?
The actual IP numbers are identified in the complaints filed in court. These are a matter of public record.
How far do the copyright laws for music file-sharing date back?
File-sharing is just a current technology to which copyright law applies. Copyright law has been around since the earliest days of the Republic. That uploading and downloading copyrighted files without authorization is illegal is a decision based on plain old-fashioned copyright law.
Are specific schools in specific areas of the country being targeted? If so, which schools and why?
We're not targeting specific schools. We're filing cases in different jurisdictions around the country in a way that maximizes the efficiency of the litigation process. The individuals targetted in this round happen to be in the jurisdictions where we are filing at this time. We will continue to broaden the number of jurisdictions in the future.
Bad publicity is arising from the lawsuits. Do you expect a backlash?
Surprisingly, most of the public (and even college students) have been sympathetic and supportive. 56% of the public say they are "supportive and understanding" of the lawsuits. Among students, it's 50%. But remember, we're not doing this because it's popular. We're doing it because to do nothing is to allow the continuing devastation of the music industry and all the people who devote their lives and careers to making music.
What kind of penalties do college students face for downloading music?
College students face the same kind of damages as any other infringer (except of course for any specific sanctions that the student's university may impose).
Are there any distinguishing characteristics of the people you chose to sue, or were they randomly selected?
They are chosen based on the egregiousness of their infringing activity. The greater the number of copyrighted music files offered for others to copy, the greater the likelihood that you will be a target of litigation.
Are you pursuing litigation that relates specifically to file-sharing?
Yes, these litigations relate exclusively to illegal file-sharing on P2P networks like KaZaa, Grokster, Blubster, LimeWire etc.
In what ways have you and your colleagues been able to measure the impact of file-sharing on music sales (and what are the latest figures)? Specifically, how have you isolated costs of piracy from those associated with economic slowdown?
There have been some very thoughtful academic studies that have concluded that file-sharing is having a substantial and adverse impact on music sales. For example, Professor Stan Liebowitz at the University of Texas has written extensively on this subject, and he has analyzed other possible explanatory factors. But I also think common sense plays a role. How many of your friends are buying as many CDs today as they were a couple of years ago, and if they're buying less, why is that? Certainly not because music is any less important to them. In fact, music consumption has never been greater. People are just paying for less of it.
At Notre Dame, our Office of Information Technologies receives multiple "take down" notices each week. Do the lawsuits where college students are defendants mark an end to these take down notices and an indication that a lawsuit will be filed against all violators? And how does the RIAA determine whether to issue a take down notice or file a lawsuit?
The "takedown" process is separate from these litigations. We routinely send take-down notices when our crawler finds infringing activity. But the more egregious infringers are more likely to be targeted for litigation.
How many files were they sharing?
In this round, the average number of files being "shared" by the defendants was 837. Since that's an average, obviously some were in the low hundreds and some were in the thousands.
Has the RIAA lost any of the lawsuits it has filed so far? How much have copyright holders collected from these suits?
We have settled over 400 cases so far. We haven't lost any cases, but none has yet gone to trial.
How does the RIAA hope to deal with so-called "next generation" file-sharing networks, such as Freenet, which use encrypted transmissions and guarantee near-complete anonymity
People who rely on promises of anonymity from P2P providers are likely to get just what they pay for. These people are in business to make money, not to protect you. In fact, many of the lawsuits we have filed have been against users who thought they were on anonymous P2P networks.
If music consumption is greater, isn't that a plus for the creative community?
Not if people don't get paid for their work. Songwriters, for example, don't tour; they don't endorse products; they don't sell t-shirts. They make their living exclusively from royalties. If people just take their music without paying for it, they don't have a career in music.
If the RIAA does not yet know who the people in violation are, how specifically do the violators themselves find out that they are the ones who have been targeted?
They will probably receive a notice from their university (or commercial ISP) that their identity has been subpoenaed in a litigation. We have encouraged all ISPs and universities to notify the defendants that their identity is being sought.
What are the terms of the settlements? Are violaters paying fines? What are the typical terms of a settlement?
Up until now, the average settlement has been about $3000 -- but we take each case on an individual basis. This is not a revenue-generating exercise. We're trying to send a message that the activity is illegal and can have consequences.
Will the people named in the lawsuits have received a "takedown" notice first?
Not necessarily.
Are any specific types of music that have lost more sales over others due to file-sharing?
If you look at publicly available charts on what's being downloaded, it is heavily skewed to the hits. The Billboard 200 and the most-downloaded songs are very similar. In 2000, the top 10 albums sold 60 million units. In 2001, the top 10-sold 40 million units. In 2002, it was down to 34 million. You get the idea. But all genres of music are being hurt.
Will you consider further legal action (other lawsuits) after these are settled?
This is an ongoing program. It won't end with the settlement of these cases. we've been delighted by the increasing success of the legitimate online services, and enforcement against illegal downloading can help migrate consumers to the legal marketplace. And that's good for lots of reasons by the way. P2P systems have been the source of viruses, spyware, and inadvertent disclosures of private information by unknowing users. And you don't always get what you want, or expect. The legal services are going to be more and more appealing to consumers as the warts of the P2P systems become more obvious.
Since you first began filing suits several months ago, have you seen a decrease in file-sharing? If so, has there been a corresponding increase in CD sales? Or are most users simply turning to legal file-sharing networks?
We've seen a marked decline in illegal file-sharing, a marked increase in business at the legitimate online music services, and a spike in CD sales as well. Frankly, the program has been more successful than most people would have predicted. But most important, we have precipitated a national conversation about the impact of illegal downloading, which wasn't occurring before. People didn't think twice about what they were doing. Now they are far more likely to at least think about the impact of their actions. That's a major step forward.
I want to thank all of you not only for participating, but also for your interest in this subject. Getting the word out about the impact of illegal file-sharing is what this is all about. So many college students are concerned about the aggregate impact of development in Brazil, or sulfur from power plants, because they recognize that the actions of one person contribute to a global problem with adverse global consequences. It's no different with respect to illegal file-sharing. Thanks for listening.
Be the first to comment on this article!