"An era can be said to end when its basic illusions are exhausted." - Arthur Miller

Monday, August 14, 2006

RIAA Going After Dead Defendants Heirs

Out of "kindness" the RIAA files a motion to give the heirs of Larry Scantlebury 60 days to grieve before they continue legal action against the now dead defendant for illegally downloading music. I guess they want to continue to make an example for him having the indencency to die before the RIAA could squeeze their bit from him.

Whether he actually committed a crime can't be proven as the RIAA has a tendency to be wrong when it goes after grandparents who don't own a computer, other dead defendants or little children. So the lawsuit, in an of itself, indicates nothing due to the RIAA's horrible track record.

Sadly a court of law will probably side on whatever the RIAA chooses to do. This despite the fact that the RIAA can't even prove actual harm was done by the defendant himself. Most of the "harm" they indicate is more wide scale in the sense of lost record sales, not what one individual might have done as I doubt one individual could have harmed an entire industry. If only where that easy, I think the RIAA would have ceased to exist a while back. On the other hand, you have Ken Lay of Enron. With his death, its assumed that his illegally gotten gains can be fully enjoyed by his heirs. Pretty much untouchable, even though actually harm can be proven as a direct result of this person's action. From a law perspective, two similar cases yet two difference courses.

Now many believe this action is necessary. Must make examples of the "bad" guys. We hear on the news all the time about the billions lost due to piracy both online and real world. For software the claim is $29 billion, music $4.5B, movie industry its $6.1 billion. Something must be done, right?

However, there is the problem with how the media reports these figures. Namely what is the motive behind the reports and where did the numbers come from? Those are just two of many questions that should be automatic for these kinds of statistics based surveys.

For all the above examples, the impacted industry paid for the surveys to be done. Therefore its in the best interest of the survey company to produce results their customer expects if they want to continue to get business. You don't get paid X dollars to the customer and report that their entire belief is incorrect. No, report they are not only dead on but its worse then they think. You don't tell your boss he is wrong if you don't have to, he figure out a way to give him what he wants.

Now the numbers. These are big numbers. Where do the dollar amounts come from? For example, the RIAA seem to consider the cost of a CD to be around $18-20. When was the last time people even paid that? If get them at Target, the cost is close to $12, iTunes its $10. What about single sales where the person wants only the one song? Is that taken into account? The same for movies. What is the cost of a DVD to them? $30, $20, $10? A ticket? Is it $5, $10, $15? Those kind of differences could change the final total by billions. What if the number of the initial cost is inflated? Does that mean the $6.1 billion lost is really more like $2billion? Still large but just doesn't quite the same grandeur and therefore the same impact does it.

How do the come up with the number of lost sales? No one even has a handle on how much piracy occurs. So do they assume a million copies that where not sold that would have been if not for piracy?? A billion copies? Or a 100 million less tickets sales? Where do they derive the numbers from? I suspect they pull them at random. Whatever will give the highest yet believable lost in sales for the PR and media machine. On top of that, those numbers assume that if piracy wasn't available, that people 100% of the time would have bought the object through legitimate channels. That means in their minds there is a one to one ratio of sales loss to piracy.

To illustrate, lets assumes 1000 people don't buy the Paris Hilton CD and instead download it illegally (who knows why, but work with me). To the RIAA that is $20 in CD cost times 1000 people not buying = $20,000 in lost sales. 100% of the pirates that would have bought the CD otherwise.

Now, lets pretend for these 1000 potential buyers, the RIAA just really scares them and they decide that illegal tactics are a no go. Will all 1000 go to the store and spend $20 for the CD? Highly unlikely. Lets be generous and say 10% are willing or 100 of the 1000, that means they really only would have only had $2000 in sales.

Of course who really pays $20 for CDs anymore? Since the people are savvy enough to download illegally they are savvy enough to go to Target or iTunes, so really those 100 real world buyers (rather then the RIAA's imaginary 1000 buyers) only would have spent $1000 dollars to buy Paris Hilton's CD. $1000 dollars in lost sales just doesn't read as sexy as $20000 in lost sales does it? Now multiple my hypothetical by about a million and you get an idea about how easy it is to come up with the hypothetical billions that the entertainment industry uses.

When it comes to statistics and reports, don't just take the numbers at face value. To evaluate the legitimacy of the number you first have to know where they came from and also what is the motive of the company compiling the report. These are questions the media should ask and doesn't. Probably out of practice as the media has become more regurgitator and less reporter and searchers for truth.

1 comment:

  1. very good read

    "Paris Hilton CD (who knows why, but work with me)"

    i think the figures for that are more like $1 at big dave's pawn shop x 10 :)

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