“Sue em all” Awesome

Techies frequently rag on the RIAA “sue em all” campaign, saying that it hasn’t worked and never will. They’re wrong.

As an example of someone saying Sue Em All is not working, this sober analysis by professional economists describes the situation this way:

A catch-all phrase covering letter writing,
bandwidth throttling and legal action against those who upload and
download files. Whilst understandable as a choice given the current
coordination problems, there is little evidence suggesting the costly
process of pushing down on the black market will indeed raise up the
demand for the licensed market for music. Furthermore, there exists the
real risk of a ‘Whack-A-Mole’ game – persistent reappearance of
unlicensed sources for music upon the closure of any source.

pricing P2P’s economic impact” (Will Paige, David Touve, Keith
McMahon; MCPS-PRS Alliance)

It’s true that individuals in private life are just as free to do filesharing as ever, and that the amount of filesharing isn’t going down. However, it’s not true that businesses can incorporate filesharing.

A business that builds on filesharing creates unacceptable risk for its investors. The investors are about return on investment, and they aren’t ok with giant settlements or big ongoing legal bills. Businesses who need music are usually forced by their investors to cut licensing deals, despite the brutal expense.

Google’s settlement of the lawsuit over the book-scanning program is a good example. They had a pretty damn good legal case if they wanted to fight it out, but they stood to gain more by making up. Fighting meant uncertainty over whether the final judgement would vaporize the entire publisher project in the end. Settling now meant putting bounds on the costs.

Standing on principle is not what businesses do. They exist to make money. Making money means controlling risk. Controlling risk means preventing ruinous legal judgements.

And users gravitate towards experiences supported by business, because business support allows for better usability.

Case in point, the Apple silo. Apple makes it very easy to get music onto the iPod by buying at the iTunes music store. If you’re an iPod user, you’re an iTunes user, and if you’re using that software then it’s often easier to buy licensed music from the iTunes store than to download from a filesharing network and import to iTunes.

Not that users *can’t* do filesharing — that would be a ridiculous claim — but that the usability of licensed commercial suppliers is greater.

And usability is a huge factor. People have a hard time operating computers. They have an easier time when businesses devote resources to helping them. When they have an easier time of one thing than another, they do more of the easy thing.

Again, it’s not that lawsuits against private filesharers have caused private filesharing to go away. For an individual engaging in filesharing the calculation is clearly on the side of doing it. Individuals who are rational actors *will do filesharing*.

It’s that the same calculation doesn’t produce the same result when it comes to support businesses.

I hear you say: what about My Favorite Software, which is still around? What about X-Factor-Gee-Whiz-2000? What you don’t know is that the proprietors of those companies almost certainly are having meetings with the labels. They are making the pilgrimage to Santa Monica to kiss the ring and seek absolution. If they’re still doing what they’ve always been doing, the reason is probably that they can’t get a favorable deal.

Open source software is an exception; without investors, it doesn’t need to control risk. Generic software which can be used for filesharing is the other exception. Nobody thinks it might lose a big court case.

As a result of all this, the record labels are busily cutting licensing deals. It’s simply not true that they have scared the customers away. Now, maybe the companies taking out those licenses are going to go out of business, leaving the labels dead in the water in the long run. But the jury is out on that. We won’t know for a few years whether licensees can survive and under what conditions.

What we do know is that the labels have created a customer base by suing it into existence.

8 thoughts on ““Sue em all” Awesome

  1. The RIAA consumer suits were/are badly handled.
    If RIAA had focused its resources on more palpable targets (as with its most successful and least objectionable pursuits), then the record industry would not have the issues it now faces.

    People are happy to pay for records and CDs and downloads. RIAA companies could use their marketing departments to make this happen.
    The RIAA sue-12-year-old approach is objectionable less because it is a travesty of copyright law than because it is a travesty of
    a business model.

  2. Not that users *can’t* do filesharing — that would be a ridiculous claim — but that the usability of licensed commercial suppliers is greater.

    I beg your pardon but that’s not what some researchers argue:

    A study of the accessibility of The Pirate Bay and the iTunes Store

    Downloading of music and videos from the Internet has become incredible popular. But can the systems for downloading these files be used by people with disabilities? This paper studies the accessibility of the popular file sharing system The Pirate Bay and the first successful online digital music store, the iTunes Store. The systems are evaluated from the perspective of five fictitious characters that are created with the interaction design tool, Personas. By using the systems in the same way that a user with low vision, blindness, dyslexia, colorblindness, deafness or motor impairments would use them, the strengths and weaknesses in the accessibility of each system is found. The study shows that The Pirate Bay is accessible to a high degree. This is much thanks to a well-considered design and the use of XHTML and Cascading Style Sheets for the user interface. The accessibility of the iTunes Store is poor. One reason for this is because the system is not designed to be used together with assistive technologies such as screen readers and keyboard shortcuts. The paper concludes with a discussion around the found results and how future systems of this type can, and must be accessible to a much higher degree.

  3. Miguel, that’s a great point of comparison.

    I’d argue with the specifics. This study is about accessibility, not usability, and it relates to Apple’s strategic decision to keep iTMS out of the browser and use their own client instead.

    I’d also argue with holding up Pirate Bay as an example of usability. They could be a lot better. …and they probably *would* be a lot better if they were running high CPM ads from major brands rather than getting junk CPMs from crappy dating servies.

    They can’t get major brands because the labels have successfully defined filesharing as scummy. Another example of the success of the Sue Em All campaign.

  4. sorry for jumping in late: so the RIAA has been suing grandmothers and killing puppies in order to drum up licensing business with Electronic Arts? This was their plan all along? Something like that?

    I don’t know dude… This one may be a stretch.

    Lawsuits have been SOP since at the least the 70’s when I noticed that, all of a sudden, every A&R guy had a law degree. Lawsuit insurance, at that time, was built into recording contracts (at the artist expense of course), replacing budgets for coke and ludes.

    The Internet just exposed the ‘sue am all’ thing to everybody outside the industry, but they’ve been doing that all along. Meanwhile, lisencing (I’m told) is 66% of the industry anyway.

    I’m barely seeing correlation here, leave alone causation.

  5. You’re right about the success of the “sue ’em all” strategy in having achieved the labels’ immediate goals, but the problem is that it has been a pyrrhic victory. Napster was the most effective music discovery and acquisition engine in history, it had an enormous and enthusiastic user base, and the labels killed it in an attempt to preserve their current business model.

    Then mp3 blogs arose as a ground-up completely distributed user-driven model for taste publishing and music acquisition. They had a series of early instances of driving wild success of unknown bands (Broken Social Scene, Arctic Monkeys, Clap Your Hands Say Yeah, Arcade Fire, etc), a possibility that was formerly open only to the labels. The labels couldn’t actually sue each blogger — there were simply too many — so they conducted a comprehensive FUD campaign to discourage bloggers from linking to mp3, which has been fairly successful. Simultaneously they have worked to encourage the rise of a small number of highly visible music sites (Pitchfork, et al) which they have worked hard to control via the traditional methods of ad revenue and star access. The result has been the recreation of an online music journalism that looks a lot like its offline counterpart and is hence a relatively poor niche-satisfying discovery engine.

    Somewhere in there the iTunes store arose as a very user-friendly interface and captured an enormous portion of the market. It didn’t benefit from any of the network effects of the web, but it did its best to serve users and so it became an incredibly powerful promotion and discovery engine despite its best efforts to the contrary. The labels immediately got scared of Apple’s power over them and so have tried to stand up a whole series of competitors such as the Amazon mp3 store, each their own totally incompatible silo. This has been good for customers in terms of prices and DRM options, but has again eliminated the incredibly powerful networks effects that are what make the web the world’s best tool for getting cultural supply together with demand.

    Each of these incidents (and others, such as the Pandora/streaming debacle) has shown the labels choose control and fear of change over the potential distribution, discovery, and money making power of the web. The result has been that while they’ve “won” in the sense that they’ve largely prevented the creation of an online distribution system that would be a competitor for their offline systems, they’ve done it at the cost of utterly poisoning the well: ensuring that music on the web has withered as a market just when so many other digital ecosystems have taken off.

    It’s had to argue that an industry that has gone from being enormously profitable to being on the edge of utter bankruptcy in the face of the largest expansion in the consumption of its product in history has done “Awesome”.


  • the sue em all mystery solved — Lucas Gonze’s blog
  • Lucas Gonze’ blog » success of sue em all not good for labels
  • Lucas Gonze’ blog » bitching about sue em all for newbies

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