RIAA’s Cary Sherman speaks
p2pnet.net News:- The Columbia Daily Spectator is the daily newspaper of Columbia University and Morningside Heights, and the second-oldest college daily paper in the country.
In its March 24 Urbanities column, Kathy Gilsinan has a fascinating discussion with RIAA president Cary Sherman, senior music industry truth and reality realigment specialist.
“Nobody wanted to play the heavy and bring lawsuits,” Sherman tells Gilsinan.
“But what choice did the industry have when illegal file sharing continued to increase geometrically notwithstanding years of educational outreach that this activity was not just illegal but was hurting the people that make the music that consumers love?”
What choice indeed?
Now read on >>>>>>>>>>>>>>>>>>>
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The Man Who “Convinced” You to Stop Downloading
By Kathy Gilsinan – Urbanities
The Recording Industry Association of America may represent hot artists, but the trade group itself has few fans among college students. Since Napster’s withdrawal from the illegal file-sharing world, a host of other file-sharing programs have found homes on hard drives everywhere, particularly on college campuses, and the RIAA has duly unleashed hundreds of lawsuits to combat the epidemic. Cary Sherman, the President of the RIAA, offers his perspective on the financial and moral nuances of the struggle against music piracy and discusses the future of the music industry.
Q. Why has it been so hard to target KaZaA itself rather than suing individual users? If Napster could be brought down, why has legal action since been directed against users rather than individual P2P providers?
A. The current crop of P2P systems used the Napster decision as a blueprint for how to get into business and avoid liability. They did that by creating a decentralized architecture so that instead of having a centralized index, they distribute the indexing function to different users at different times. … It means that instead of having a centralized database … they’ve basically distributed that function to users that aren’t even aware that their computers are being used for that purpose. The only reason to do that is to avoid liability under the Napster decision. One court actually agreed [that] because that system was architected this way that the P2P system could no longer control the infringement on its network.
Q. If users aren’t even aware that their computers are being used for illegal purposes, couldn’t one argue that they’re not liable for the infringement that results?
A. That argument would have been credible before we made public announcements that we would be targeting uploaders, and before we filed over a thousand lawsuits which have received unbelievable press coverage around the world. It’s just hard to believe that at this point there are people, especially in colleges, who are unaware that this activity is illegal.
Q. What about the moral implications of those lawsuits? There are obviously questions of morality involved in stealing music, but even if the lawsuits are having the intended affect, is it worth suing the occasional 16-year-old kid?
A. Nobody wanted to play the heavy and bring lawsuits. But what choice did the industry have when illegal file sharing continued to increase geometrically notwithstanding years of educational outreach that this activity was not just illegal but was hurting the people that make the music that consumers love? It was essential to do something to staunch the hemorrhaging and the lawsuits have achieved that purpose. … [There has been] a dramatic decline in the amount of illegal file sharing in the U.S., but that doesn’t make the problem any less severe, because there is still so much illegal activity. … [CD] sales actually increased starting last September which, oddly enough, coincided with the filing of our first round of lawsuits.
Q. In that case, how long will the lawsuits continue?
A. I think they’re going to continue for a long time, because once you stop enforcing, illegal behavior returns. That’s why traffic cops continue to give out traffic tickets…
Q. What do you make of the 1984 precedent ruling about Sony Betamax? The court ruled that “the sale of copying equipment … does not constitute contributory infringement if the product is widely used for legitimate, unobjectionable purposes, or, indeed, is merely capable of substantial non-infringing uses.” Granted, this was about VCR’s that could record copyrighted material off of TV’s, which now seems pretty standard practice. How’s this that much different?
A. A recent study … showed that 97 to 98 percent of the traffic on P2P systems is illegal. Far from substantial non-infringing uses, here–the non-infringing uses are minimal. If P2P systems really believe that they can build a business based on non-infringing uses, then they should use filtering technology … and build a business on what’s left. I suspect they won’t do that. [In the Betamax case] the Supreme Court was faced with either allowing or disallowing a technology. Now the choice is not nearly so binary. It’s a question of allowing non-infringing uses but prohibiting blatant infringements. … The Napster case basically held that the Sony case was completely consistent with holding P2P systems responsible for infringement, because they said that there were significant distinctions between what Napster was doing and what Sony was doing.
Q. Like what?
A. [It's a] complicated question because no court has ever had to rule on consumer behavior for personal use, … but when the Napster court confronted that issue they said there was no comparison between an individual making a copy and an individual distributing a copy for millions of other people to take around the world.
Q. But people seem to be mostly downloading songs for private use, and burning CD’s for private use. It’s not as if college kids are selling this stuff.
A. When people steal a CD from a record store, it usually is also for private use. Personal use is not an exemption from the law or morality.
Q. But if I taped a song off the radio for my personal use…?
A. [The Betamax] case is actually unfortunately not well understood. The court made very clear that it was limiting its decision to taping for purposes of timeshifting.
Q. In terms of legal online file-sharing, why has it taken so long for the technology to catch up with the illegal methods of file-sharing?
A. It’s really much easier to be illegal in the online space than legitimate. You don’t have to worry about protecting the content in any way, you don’t have to clear rights from artists or labels, you don’t have to build in accounting software that will ensure that royalties are paid to all the creators. You just build your business based on an open standard with no protection.
Q. How have CD prices been affected by the availability of digital media?
A. At least one company announced a substantial reduction in the price of CDs … and I think that a lot of companies are looking at pricing strategies as part of their overall response to the piracy problem. One thing that is a very common response is providing added value to the existing physical formats … selling a CD and DVD [together for the same price] … or [including] concert tickets [with the purchase].
Q. Considering the price reductions in CD’s, and the digital innovations aimed providing legal and convenient music sharing, would you say that piracy has been a positive force to improve the music market for consumers?
A. Piracy has been a market force certainly that the industry has had to deal with. And consumers are getting the benefit of that … but that’s hardly a justification for what has really been businesses built on theft of other people’s property.
Q. There’s theft, maybe, but it doesn’t seem to be doing too much damage. The Financial Times says that record companies are still putting away billions of dollars…
A. I wish that were true, but unfortunately its not. … The industry has lost 26% percent of its sales … [and] fired thousands of people in order to try and bring its costs better into line with its decreased revenues. … New artists are having a much tougher time getting signed; retail record stores have shuttered their doors by the thousands. … Sort of the best example is Musicland, a chain of a thousand record stores that was bought by Best Buy in 2000 for $682 million. They sold it last year for one dollar. That’s what’s going on in the music business. … If there are profits, they are tiny and barely enough to continue to invest in new music.
March 24th, 2004 at 11:04 pm
Hi; I am the author of this interview. If any representatives of p2p united wish to contact me about this, my email address is kmg2013@columbia.edu. Hopefully, we can continue to combat the RIAA together; I’d love to hear your thoughts on the latest wave of lawsuits.
Kathy Gilsinan
March 25th, 2004 at 6:40 pm
As usual, downloading is compared to stealing a CD, while the courts have continually said that downloading is not stealing but actually a form of “copyright infringement.” And old slimy Sherm’s examples of the dwindling profits in music distribution illustrate the changing market and the industry’s failure to adapt -In my humble cowardly opinion
March 25th, 2004 at 9:04 pm
SOOO, how much of these penalty dollars are being redistributed to the artists, writers, producers,….etc?
March 26th, 2004 at 4:07 pm
Here’s what I have yet to hear:
These ‘declining sales’ figures include which lablels?
Just the majors?
Are the small independent lables included in these numbers?
Is it just RIAA related labels?
Are they per market?
Here’s why I ask these questions:
I’ve been buying CDs over the past few years, but they are from small labels that are NOT associated with the RIAA. I’m also buying plenty of Japanese and Korean CDs and I live in the US.
Filesharing has allowed me to explore more and different types of music as well as artists that are not associated with the major labels who are represented by the RIAA. I have consitently found that I LIKE what I’m hearing from non-RIAA labels more than what I’m hearing from the RIAA camp.
From where I sit, it looks to me as if it is more about *control* of WHAT you and I hear than it is about filesharing itself.
Listening to, and BUYING music from, non-RIAA labels is a bigger threat to them that some 15-year old d/l’ing the latest teen idol.
Oh yeah, about the layoffs thing, welcome to *our* world. The RIAA and other music industry reps speak as if the music industry workers should be pitied more than the rest of us. They aren’t a protected class of citizen.
They’re control of content distribution is failing and it is the CORE of their business model. I guess they’ll just have to sweat paying bills like the rest of us.
March 26th, 2004 at 7:08 pm
Every industry has to take the downs with the ups. If the consumer is to blamed for a downturn in sales, the consumer must be thanked for your yeasr of propserity.
Once a sound or ray of light has been broadcast on a free network, it enters the public domain. You can’t control whose ear or eye is affected.
Your chance to make money is before the sound is broadcast on a free network. You have other chargable networks available to you. I suggest you use them.
March 27th, 2004 at 1:59 pm
Mr sherman refers to a study, but he gives NO source or link to the study, or who conducted the study, So he expects everyone to assume he is an honorable and honest man and would NEVER think of making up statistics to support his case.
March 27th, 2004 at 2:25 pm
Its so sad to see a large group such has the RIAA fail to evolve , They remind me of a small child , things just don’t go their way and they make life miserable for all.
Why should we the consumer (the people that put the food on the riaas plate in the first place )be punished for the RiAA’s failed to evolve with the times and tech. Their business model no longer works and that is our fault ? They seem to think so and plan on punishing us by legal action .Bootlegging has been a part of there business from day one , I have collected bootleg vinyl 78 and 33 rpm albums , Through the 70s and 80s we all bought blank tapes by the case . Then the industry came up with CDs , That worked for a bit because they were a BETTER PRODUCT. Times have changed and CDs in their present state are impractical (why would you want to carry around 10 cds when you can carry 100 albums on a hard drive).
Only the truly ignorant would continue on the path the RIAA has chosen .To alienate your consumers by fear is suicide .There are working models that they could follow . Lets take the “Greatfull Dead” their albums produced little revenue , but they managed to become one of the top paid acts in the 90s due to their relentless touring (them boys earned their millions ). They were smart enough to realize the one thing a recording, no matter how good ,cant compete with is the energy (and revenue) of a live performance . ………….Its kind of a no brainier when you think about it , The industry can no longer compete with a mere recording and needs to stop relying on that , give us something we cant download ………and a bonus to that would be more jobs has opposed to a drain on our legal system
Sincerly , Randygod, pirate from birth
March 30th, 2004 at 3:36 am
There is only one real reply to Cary Sherman’s words.
Don’t buy any CD’s or DVD’s as long as the RIAA and others are sueing the people who buy the crap they sell. I can see were there needs to be limits or what and how much is shared but sueing your customers is not the answer (mr.) Sherman.
July 12th, 2004 at 10:17 pm
Speaking of which, did you know that 58.47% of all statistics are invented on the spot?
(Let’s see you make head or tails of that!
[or simply put: Is this statistic legit? Yeah, that's my point])
March 29th, 2009 at 2:07 am
Just to chime in. The obvious problem with the last few comments by Cary is that they have no control to compare against the “piracy” treatment. Really there were no other factors? Like legal digital distribution (iTunes, amazon)? “Popular” mainstream artists supported by the record companies declining steeply in talent or audience? General decline of the physical format in favor of online distribution? Ms Gilsinan here asked some tough questions and stayed true to her hard-hitting journalistic style, and Sherman’s responses make the case against the RIAA as well as any outside commentary.