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April 15, 2004

Recording industry crusade stumbles on

The legal debate surrounding peer-to-peer file-swapping sites has shifted up a gear in the past few months, beginning with the Recording Industry Association of America filing hundreds of lawsuits against serial downloaders, who they claim are costing the industry millions. But the crusade against copyright infringement has met more than a few stumbling blocks...

By CBR Staff Writer

At the end of March a Canadian judge ruled that use of the Kazaa P2P network did not constitute copyright infringement, in a case brought by the Canadian Recording Industry Association that was attempting to identify 29 Canadian people who had been downloading music.

The judge opened a whole new can of legal worms by ruling: No evidence was presented that the alleged infringers either distributed or authorized the reproduction of sound recordings. They merely placed personal copies into their shared directories which were accessible by other computer users via a P2P service.

Fighting back

More surprising is the action taken by a New Jersey mother, Michele Scimeca, who received an RIAA notice in December after her child used the Kazaa network for a school project. She has countersued labels Sony, Universal and Motown by claiming that the demands for reimbursement of $150,000 per infringement falls foul of the 1970 Organized Crime and Control Act.

Scimeca’s attorney explained the reasoning behind the lawsuit to the New Jersey Star ledger: They’re banding together to extort money, telling people they’re guilty and they will have to pay big bucks to defend their cases if they don’t pony up now. It is fundamentally not fair.

Does it hurt sales?

The recording industry’s position was further eroded by a report released last week by Harvard Business School associate professor Felix Oberholzer-Gee and professor Koleman Strumpf of the University of North Carolina. These two academics claim that music downloads had no statistically significant effect on purchases of the average album in their research sample.

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The professors used data taken directly from file-sharing networks over a 17-week period, comparing them to official US CD sales, and factoring in network congestion, song length and seasonal trends. The research states that it would take 5,000 downloads of a song to reduce sales of the album which it is on by one copy.

Of course, the RIAA has its own research that claims file-sharing is killing the industry and hurting artists. These claims are countered by those that argue CD production has been falling over the past few years, and that record companies need to restructure their business to focus more on artists, and spend less on marketing bad products.

The RIAA’s stance will work against it

In spite of the rights and wrongs of file-sharing, there must be an underlying belief within the recording industry that the majority of users do want to reward artists and their management for their art. However, the increasingly tough stance taken by organizations such as the RIAA will only work against them, and could increase resentment of the industry and its stranglehold on audible art.

Given that the film and computer games industries are not up in arms despite the large amount of downloading of their intellectual property, the recording industry may increasingly be seen as a spoilt brat throwing a tantrum. Although strong-arm tactics have filled the pockets of the world’s biggest recording companies for the past 50 years, the estimated billions of file-sharers in the US, Europe and Asia may be a harder nut to crack.

This article is based on material originally published by ComputerWire

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