Music industry watch

RIAA fails basic business case analysis

The RIAA trial proceedings in Virgin v. Thomas started yesterday and we're already getting all sorts of interesting information from this trial. This if the first case of the RIAA's "Sue the World" program to go to trial, and as its usually the case with trials all sorts of dirty laundry gets aired. Jennifer Pariser, (her last name is a slang term for a condom in Germany, quite fitting I think!) the council for Sony BMG says:

She then made perhaps the most startling comment of the day. Saying that the record labels have spent "millions" on the lawsuits, she then said that "we've lost money on this program."

I've suspected that this program wouldn't make them money ever since it started and its nice to get that confirmed now. What's even more amazing is this:

"We haven't stopped to calculate the amount of damages we've suffered due to downloading, but that's not what's at issue here," replied Pariser, who was reminded by Judge Michael Davis to answer the questions actually asked by Toder, not hypotheticals.

Toder then pressed the Sony executive on the question of how many people actually downloaded music from the defendant. "We don't know," she replied. "I can't identify any other entities aside from what SafeNet reported, but I know that many others did... that's the way the system works."

Wow! This program is costing them money, creating tons of ill will, yet they have no means to quantify that its working at all! When you conduct business in this manner there is only one way to go: Out of business. Anyone with an ounce of business intelligence would do a rough ROI analysis and immediately figure out that its amazingly stupid to have started this program in the first place. Of course they say that "Lawsuits are punitive, not business " -- I'd hate to tell you this, but if you're losing money, its business!

Of course this information comes from the same source that tells us that CD Ripping is stealing. You can't possibly go out of business one moment too soon!

Posted by Mayhem at October 3, 2007 02:43 PM