Every spring the RIAA and MPAA release their sales statistics. And every year, Hilary Rosen, ex-Chairman and Chief Executive Officer of the RIAA, blames any losses from the previous fiscal year on piracy. Although piracy is illegal, music, movies, and software have faced rampant illegal distribution in recent years, and the RIAA and MPAA have become strong advocates of anticonsumer and anti-fair use legislation.
The greatest fear for any 20-year-old college student is the sight of a young law firm clerk with a court order. Last week, on three college campuses, four students were presented with lawsuits claiming that software they created constituted "contributory infringement" and violated the Digital Millennium Copyright Act. The suits state that their software created a "Napster-like" network, permitting students on the local area network to share copyrighted music.
According to the Washington Post, while lawyers for the RIAA and MPAA have been feverishly churning out lawsuits against file sharing networks since the 2000 Napster case, these are the first time lawsuits filed against individuals.
The lawsuits also break the status quo established between the RIAA and most university network administrators. Previously, if a student was found to be hosting copyrighted material, the RIAA or the copyright holder would inform the administrator of the violation. It would then be the university's responsibility to have the student remove the content. This protected students from legal repercussions due to copyright violations.
According to the Detroit Free Press, the suit against Joseph Nievelt of Michigan Technological University claims his service made over 652,000 copyrighted songs available to network users. The RIAA has requested the maximum punitive damages, $150,000 per song. This comes to a total of $97.8 billion. The requested damages are nearly eight times the value of all music released in 2002, $12.3 billion according to the RIAA's 2002 Yearend Statistics.
The RIAA has used the precedent of the 2000 Napster case in each of lawsuits, claiming that each student created a "Napster-like' network. But analysis shows that this is simply not true. Napster lost its court battle because it acted as both a MP3 exclusive search-and-indexing service, and used Napster owned computers for file storage.
The RIAA also claims the moral high ground when discussing slumping music sales. According to analysis of RIAA statistics conducted by George Ziemann, of AzOz.com, while music sales have dropped nearly 12% from the five-year high in 1999, the average price per unit has increased almost 14%, from $15.00 to $17.09.
The AzOz.com blames falling sales not on piracy but on the drop in new release. In 1999, before the Napster and subsequent file-sharing hearings, the RIAA members listed 38,900 new releases. In 2001, that number had fallen to 27,000, a drop of 30%. Yet during that same period, sales only fell by 4.1%, all while the US was reeling from a poor economy, a stock market collapse in early 2000, and 9/11.
These are prime examples of how the music industry is helping to engineer the problem. The most drastic method has been price fixing. Music industry giants recently lost a $130 million lawsuit claiming that they took action between 1995 and 2000 to actually artificially inflate CD prices. After taking advantage of customers, they have the audacity to claim customers are taking advantage of them and artificially inflate their losses to prove it.
While the MPAA and RIAA are extremely vocal about the effects of music and movie piracy, the software industry is equally troubled by piracy. According to the Washington Post, the Business Software Alliance (BSA), an industry organization responsible for monitoring and controlling software piracy, reports that an estimated $10.97 billion is lost every year due to global piracy. This amount is more than double the losses alleged by the recording industry.
What is most troubling about these figures is the resulting loss of revenues in other fields. According to 2001 figures, the BSA found that piracy not only cost the companies money, but resulted in 180,000 layoffs; which equates to $5.6 billion in lost wages, and a $1.5 billion loss in federal taxes.
While the BSA is quick to sue corporations who violate copyright laws, very few suits have been brought against individuals and college students. Software publishers realize the benefits in some piracy. While the average college student could never afford $1,299 for Macromedia ColdFusion MX Server Professional, a student who pirates a copy is able to learn all the intricacies. With that knowledge, a person may be more likely to legally purchase the software in the future.
In fact, many software developers and company executives committed software piracy in college. They taught themselves how to program and became a valuable resource to the industry.
Microsoft recently proved this fact by creating a new licensing program for students. Several popular Microsoft titles, including Office XP and Visual Studio .NET, can now be purchased for around $100, provided you are a student or teacher. Other companies will be sure to follow suit in the near future.
While Microsoft's new licensing is friendlier to students, the new anti-piracy programs have received criticism from many in the software and privacy community. With the release of Office XP, Microsoft began adding an activation program to all major titles. This feature actually makes it impossible to install a title on multiple computers.
While hackers are able to break security features even before a retail release of a program, publishers have begun using an update system to disable illegal programs. Adobe, the makers of Photoshop and Acrobat, has begun using a single update to disable all illegal copies of their software on a computer. By checking the registry for known pirated CD keys the update is able to quickly and effectively disable all the programs at once.
Piracy is unquestionably illegal. It is theft that measures in the billions of dollars each year. It affects not only "rich greedy companies" but also individuals and governments with lost jobs and taxes. But, when organizations like the MPAA and RIAA inflate loss figures and practice price fixing, they undermine the legitimacy of their own cause in the eyes of consumers and the government.
