Music industry watch
RIAA making money off lawsuits? Doubtful.
For a second I thought I was proven wrong on my claim that the RIAA will never make money off suing their customers. But once I started reading "RIAA Profits Nearly $100 Million by Suing P2P Users" I clued in that the article was horribly misguided. The problem is that our pirate friends apparently do not understand the concept of profit and mistook all the RIAA receipts as profit:
Let’s say all 18,337 USA citizens sued have settled for $5,000 USD each, to avoid going to court and possibly losing their homes. That would give the RIAA massive profits of $91,685,000! The RIAA has profited nearly $100 million by suing individual who are too helpless to fight back, since their ’sue em’ all’ campaign began, years ago.
There are a number of problems with arriving at the $100M figure: 1) the assumed $5000 figure is higher than most cases. Most cases settle for $2k - $3k. 2) all 18,337 cases were actually settled. Then, the article completely ignores the cost of filing these suits. For starters, you need a lawyer (in this case a team of them) and legal assistants -- the lawyer alone will run you $300/hr and up. All the legal assistants don't come cheap either.
Then you need to file the suits and serve papers. Once the suit is served you need a lawyer to answer the irate defendants. Each step and turn costs money. Do you think there is anything left over after a $2000 settlement? Nope. Maybe a $10,000 settlement may eek out some money.
And now things get worse for the RIAA: Defendants are banding together and sharing costs of defending from these suits. If ten people band together, the cost of hiring a lawyer to actually defend in court (not settle!) is now (roughly) 1/10 of what is was before. And the RIAA would like people to settle, not actually fight these in court. For each case that goes to court, you bet that the RIAA takes a bath -- going to court is vastly more expensive that Cheney-style shot-gunning lawsuits with hopes of settling these suits.
The RIAA "sue the world" campaign goes from bad to worse. I wonder how much longer the RIAA wants to bleed money out of their a-holes before they wisen up? (Long time if history is any indication!)
Technorati Tags: riaa, file sharing
Posted by Mayhem at April 5, 2006 12:59 PM
