What’s the damage? $116.67 per user
p2pnet news view Freedom | P2P:- On hearing the outcome of the Joel Tenenbaum trial I was struck, as I’m sure many were, by the discrepancy between the award of $675,000 and any losses Sony may have actually suffered as a result of his admitted filesharing activities.
Indeed, if they could somehow squeeze that amount out of everyone who ever used a p2p network, this marvellous form of compensation would far exceed the GDP of the United States.
Personally I don’t think record companies should be compensated at all by filesharers: the deal that was struck with publishers when copyright laws were first enacted – the exclusive right to duplicate in exchange for keeping the creators alive – would not make sense today when duplication is immediate, free and mostly untraceable, and when creative types can market themselves directly to fans. And any sympathy that might have existed for their plight evaporated when they declared war on the populace.
It is in any case still far from clear that people sharing their artists’ music actually harms sales – research has indicated that the most ardent filesharers are also the biggest purchasers of recorded music, and that major label coffers may be shrinking for a variety of other reasons. A really good summary can be found here: http://www.rufuspollock.org/economics/p2p_summary.html
Be that as it may, copyright laws – anachronistic as they are – are still on the books, and Judge Gertner seems to have taken steps to prevent this jury from nullifying them. But she also made provision for a post-trial proceeding to review the damages award. This is important because they are every bit as unjust as they seem.
According to at least one professor of copyright law, civil damages such as Tenenbaum’s $675,000 and Jammie Thomas-Rasset’s even more incredible $1.9m are not allowed to be punitive. There is a provision in copyright law for deterrence (ie a larger amount than the actual damage incurred) but for criminal cases, not civil cases like these. Most importantly, they must reflect, as far as possible, only the actual damages incurred by that person, not through the actions of others or by filesharing as a whole.
Constitutionally speaking, Tenenbaum cannot be held responsible for the further sharing of those who downloaded from him, as the RIAA would like to suggest he should be.
I would like to help Judge Gertner’s review proceeding by suggesting an alternative means of calculating the damages caused by an individual. It’s horribly simple: divide the estimated total losses by the estimated total number of sharers.
I will leave it to the experts to hammer out the exact figures, but here is my back-of-an-envelope calculation:
In 2005 the RIAA were claiming annual losses to piracy of $1bn, of which they attributed $300m to people with suitcases of dodgy CDs(1), the rest presumably to filesharing. I can’t find a more up-to-date guesstimate, but let’s assume a similar figure on average throughout this first decade of p2p use, giving total losses of $7bn to date. My salt is well and truly pinched already, but let’s continue. No-one seems to know exactly how many filesharers there are worldwide, but the estimated figure of 60 million seems to have been doing the rounds for some years as these things tend to. The number seems to me rather low, but will serve to keep our damages on the generous side (to the labels).
So what’s the damage? A whopping $116.67 per user, on average. This is in full, not per track or anything arbitrary like that, and no nasty little ‘m’ after the amount. Just a bit over a hundred dollars.
This, then, would be the absolute maximum for which Joel Tenenbaum, Jammie Thomas-Rasset or anyone may be legally held to account for using a peer-to-peer network.
Even if we allowed the component of deterrence, case law indicates a multiplier of around five times the actual damages, so we’d be looking at less than $600, less than one thousandth of the awards actually made.
However you slice it, the award levels mandated by law ($750-$150,00 per infringement) are out of whack with the level of damage which could conceivably be done through p2p filesharing, and several orders of magnitude higher than any damage actually done, thought to be done, or imagined to be done.
I hope Judge Gertner will look very hard at the music industry’s supposedly p2p-attributable losses in her review of Sony’s award, but even if she uses the industry’s most spun figures she will still surely have to conclude that their copyright cash cow is morally, financially and constitutionally wrong.
(1) http://www.usatoday.com/tech/news/2006-05-03-music-piracy_x.htm?POE=TECISVA
Chris Ovenden – The Peer
[Ovenden is a self-confessed technology freak who says he always ends up writing about culture, or who is perhaps a culture nut continually drawn towards the hi-tech, he plays guitar, makes websites and teaches. Editorships of various on- and offline publications lurk in his past, "and possibly his future".]
First they ignore you, then they laugh at you, then they fight you, then you win ~ Mahatma Gandhi
July, 2009
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August 2nd, 2009 at 11:32 am
If this is the case, then why doesn’t the record industry wise up? $2 a month for all the tracks you want, if every filesharer would invest, would solve this ‘problem’.
(I say it with incredulity simply because I don’t think it’s a problem yet. It’s a change of marketplace that the archaic record companies still don’t understand; they leave it up to companies like Apple to do this for them)
August 2nd, 2009 at 2:43 pm
@Allan:
1. Suppose I paid $2/mo for “all the tracks I want” but not all the tracks I wanted were made available. Could I ask for my $2 back for every time I couldn’t get a particular song?
2. The problem is NOT having to pay for songs, or even that because of filesharing, corporations are losing money. The problem is that corporations should bloody well not EXIST if they’re going to treat people as chattel and customers as crooks. They do not deserve the $2 from me.
August 3rd, 2009 at 7:03 am
And how would you split the $2 a month? Radio play… i.e. the payola scheme. No way. Most of the artists I listen to don’t get radio play time.
Leave it up to the record labels? Not likely because then they would take $1.75 to take care of the rights and printing, CD’s, advertising and whatnot.
Flat rate has never been a solution for anything.
August 3rd, 2009 at 12:34 pm
“If this is the case, then why doesnât the record industry wise up? $2 a month for all the tracks you want, if every filesharer would invest, would solve this âproblemâ.”
First, it would never be as low as $2. More like $10 a month.
Second, that price would steadily go up. Not right away of course, but eventually. The music industry would claim “rising costs” or some other BS to justify asking for more.
Third, what happens when the movie industry wants its cut? And the TV networks. And the game companies. And the book publishers. And the porn industry…
Looking at this whole mess (lives ruined, technology under attack, draconian copyright laws being passed), I can’t help wondering when music went from something that the average person enjoyed listening to, to something that they *HAVE* to have, every hour of every day.