Into Tech

We’ve seen a few cases against the RIAA in which either state officials or defendants will point out that the RIAA’s hired hands in tracking down file sharers — companies like MediaSentry — are violating state laws requiring private investigators’ licenses for certain activities. Now, the American Bar Association (ABA) has put out a report suggesting that this is silly, and that states and judges shouldn’t require such companies to have a PI’s license. While I’m a bit surprised at myself, I actually agree with the ABA. As distasteful as the RIAA’s legal strategy is, and as flimsy as the evidence is that these company’s collect, going after them for not having a PI’s license is focusing on a loophole, not the actual merits. And, honestly, most of these requirements for PI licenses are really just a way to create artificial scarcity in the PI business, not actually a way to ensure safety or quality. The RIAA’s efforts to sue music fans have plenty of problems, but focusing on whether or not companies like MediaSentry need a PI license seems like a tangent that takes away from the bigger picture.

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With UK law firm Davenport Lyons ramping up its efforts to send out thousands of “pre-settlement” letters accusing folks of file sharing using flimsy evidence, it appears one lawyer wants to help those falsely accused for free. The Davenport Lyons system works in a pretty straightforward method: it makes use of evidence from Logistep, a company whose evidence is so flimsy it’s been banned in other countries in Europe as illegal, and lawyers who have used its evidence have been banned from filing new cases. However, since the “pre-settlement” letters let you avoid a lawsuit for a small fee (less than it would cost to defend yourself in a lawsuit), many just pay up.

However, TorrentFreak has found a lawyer in the UK who also believes that this is unfair, and who is offering his firm’s services for free to help those who have been falsely accused by Davenport Lyons. The offer is pretty specifically aimed at those who are falsely accused. He (reasonably so) doesn’t seem interested in helping those who actually did infringe on copyrights, and he can only devote so much time and effort to such cases, so he may not be able to take all cases that come his way. However, for those who are falsely accused, who were afraid that it would cost more to fight than to settle, at least there’s one potential option to fight back.

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In noting that the Entertainment Software Association (the ESA) had hired the RIAA’s VP in charge of its litigation strategy, we wondered if the ESA was going to ramp up lawsuits against customers. After all, over in the UK, there’s been news about law firms suing hundreds for file sharing games. But, in the comments, someone pointed to an interview with the boss of EA Sports, Peter Moore, saying that he doesn’t think it’s a good idea to follow the RIAA’s litigious path:

“I’m not a huge fan of trying to punish your consumer… I think there are better solutions than chasing people for money. I’m not sure what they are, other than to build game experiences that make it more difficult for there to be any value in pirating games.”

Of course, he also does make some other comments that suggest he very much views it as an “us vs. them” sort of thing, rather than looking for potential win-win solutions:

“We absolutely should crack down on piracy. People put a lot of blood, sweat and tears into their content and deserve to get paid for it. It’s absolutely wrong, it is stealing.”

That’s a bit of a mixed message, but at least it sounds as though EA is not anxious to sue its customers — and, of course, EA is a major member of ESA, so hopefully it can help keep ESA away from going down this path as well. The next step would be starting to figure out ways to set up better business models that use so-called “piracy” to the company’s advantage. Those will come eventually. In the meantime, though, how sad is it when it’s newsworthy that an entertainment industry exec says he doesn’t think suing customers is a good idea?

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We wrote about the woman who was fined $30,000 for file sharing a pinball video game earlier this week, noting that the press seemed to be taking the word of the law firm that sued her, Davenport Lyons, as if it were fact. That seemed problematic — and we should have realized that it was even more problematic than initially noted. TorrentFreak has turned up the fact that this was a default judgment against the woman, meaning that she didn’t even show up in court to defend herself. Effectively, the court more or less had to decide this way. Davenport Lyons, of course, implied that she had fought the case and lost — and thus, everyone else would be better off just paying based on the pre-settlement letters that the firm seems to send out in bulk. But that’s not necessarily true. There’s no indication how a court would rule if an actual defense were put forth.

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It’s no secret that both the MPAA and the RIAA have created so-called “educational campaigns” for students about copyright. These educational programs are incredibly one-side, of course, and it’s amazing that many schools actually allow this sort of corporate propaganda to masquerade as educational material. Even more problematic is when an entirely separate organization, supposedly offering a non-biased educational campaign, starts parroting the propaganda. The nonprofit National Center for State Courts, whose charter apparently is as an “organization dedicated to improving the administration of justice by providing leadership and service to court systems in the United States,” has done just that. As part of that, it created a set of “graphic novels” (more like a pamphlets) designed to teach students how the court system works. Except the first such graphic novel actually teaches a bunch of RIAA propaganda about file sharing that is mostly flat-out false.

Among the things that aren’t true is a claim that file sharing is a city level crime that will get you arrested by the local cops, and that you can face a 2 year jail sentence and a criminal record for downloading songs. You would think that a pamphlet designed to teach kids how the courts would work would actually get the legal issues correct. But, instead, it’s just a bunch of propaganda that is completely incorrect about the law.

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You would think that anyone taking an objective look at the RIAA would recognize what a complete disaster the organization has been over the past decade. It’s fought off every new innovation in the marketplace (remember, it tried to kill off mp3 players as illegal), alienated a huge number of its biggest customers and failed to do much to actually get the industry in a position to capitalize on new distribution and promotional methods created by the internet. In other words, it’s done plenty to hurt the industry while doing almost nothing to help it. You would think that might make folks in similar organizations think twice about hiring execs from the RIAA, but perhaps not.

The Entertainment Software Association — basically the RIAA for video game companies — has apparently hired a high level RIAA exec. And not just any high level exec, but the guy who was in charge of the RIAA’s disastrous litigation efforts. The ESA hasn’t been as widely reviled as the RIAA or MPAA (or even the BSA), but it has had its run-ins with folks in the past. And, of course, it was just about a year ago that the ESA’s boss was whining that he wished more countries copied the DMCA. No wonder Davenport Lyons is having a field day suing people for file sharing video games. It appears that the video gaming industry is looking to follow in the footsteps of all the RIAA’s mistakes.

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Last month we wrote about how the UK law firm Davenport Lyons had sued over 100 people for supposedly file sharing a silly pinball video game. As we noted, Davenport Lyons has been accused of some questionable practices, such as sending out threatening pre-settlement letters based on extremely faulty evidence from Logistep. Various other countries in Europe have sanctioned lawyers for relying on the same evidence that Davenport Lyons uses, and both Italy and Switzerland have said that Logistep’s method of identifying file sharers is illegal — but that hasn’t stopped the firm from continuing its efforts.

And now it’s announcing a victory. A woman that it sued has been fined about $30,000 for file sharing that same pinball game. Apparently, UK courts have no sense of making sure the punishment fits the crime. Everyone involved notes that the woman wasn’t sharing the game for commercial purposes, but wanted a few friends to be able to play it as well. For that she now needs to pay $30,000?

Oddly, Davenport Lyons used this news to announce that it was suing 100 people for sharing this game… even though it had already announced that last month. Unfortunately, the reporter for the Daily Mail in the UK only takes Davenport Lyons’ side of things. The report quotes a lawyer talking about all the evils and losses from file sharing, without any quotes from those who know those numbers are bogus — and never once questioning why it’s reasonable for someone sharing a simple cheap game with a few friends to be fined $30,000. The reporter mentions Logistep, but not the troubles it’s faced in other countries (or the trouble lawyers who rely on its evidence have faced). It’s time reporters stopped simply parroting this story, which is based on faulty premises, faulty numbers and faulty evidence.

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We were a bit surprised last month when Denise Barker, who had been fighting the RIAA in a file sharing lawsuit decided to take the strategy of admitting guilt but challenging the constitutionality of the Copyright Act. That seemed like a longshot that was unlikely to play well in court — especially a court that had already decided against her in interpreting the whole “making available” thing. So, it should come as little surprise that Barker has agreed to settle, rather than fight on, even if her lawyer, Ray Beckerman was more than willing to keep fighting.

The settlement comes to $756 for each of the eight songs she’s accused of sharing, and the details of the settlement work out that she’ll be paying $110 per month for 55 months (running through February of 2013). That adds up to $6,050, which I imagine will put a crimp on Barker’s spending on actual music. While she did break the law, and admitted to breaking the law, the punishment does seem way out of line with the “crime.” It’s arguable that she did any “damage” at all to the recording industry, as there’s a decent chance that she actually helped promote certain artists.

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In the past year or so, U2’s manager, Paul McGuinness has lashed out at pretty much everyone, other than those in the music industry, for the evils of file sharing. His main target was ISPs, but also device manufacturers, search engines, social networks and many, many others. It wasn’t long after this that U2 lead singer Bono more or less agreed with his manager — though using more diplomatic language. However, as a few folks are joyfully noting, it appears that the only one to blame for the leak of U2’s most recent tracks may in fact be Bono himself. Apparently, someone was passing by Bono’s beach villa in the south of France and heard the stereo playing incredibly loudly with new U2 tracks, so he recorded them and put them up on YouTube.

To be honest, this story has a lot of questionable elements to it, and little to back it up. So it could be entirely false. Even if it’s true, it’s difficult to see how the quality could be even halfway decent. Either way, though, it does show how silly it is to blame others. Instead, why not look to examples like Radiohead and Nine Inch Nails who have shown that when you control the leak, it can work to your advantage in a rather massive way?

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Whenever we talk about business models involving giving away “infinite” goods and charging for “scarce” goods, one of the points that we try to emphasize (though it doesn’t always come across) is that some of the best business models are ones where you get paid for the creation of content, rather than copies of existing content. When it comes to music, we’ve suggested a variety of options, and pointed to stories like Jill Sobule and Maria Schneider, who have set up models where fans chip in to pay for the production of the album itself — and, in return get lots of extras back in return (including access to the musician, early releases, credits, etc.).

Mathew Ingram points us to a blog post by Mark Kelly, the keyboard player with the band Marillion, who have actually been using just such a method of producing their albums for almost a decade:

In 1999 we released our final contracted album for Castle Records and, in anticipation of the way we planned to do business in the future, called it Marillion.com. We had already collected the email addresses of more than 20,000 fans through free CDs, downloads, etc. and by asking these fans to order and pay for the upcoming CD in advance, we were able to finance the writing and recording.

We maximised the profit from the pre-order by cutting out the record companies, distributors and retailers, manufacturing and shipping direct. We also released the album in the shops through an independent distributor to reach the fans not on the internet.

We released three more albums between 2001 and 2007 using this business model and despite continuing falls in CD sales worldwide we have managed to shield ourselves from the worst by continuing to build our database of email addresses, currently more than 65,000, and by offering special edition pre-order CDs with 128-page hardcover books containing beautiful artwork.

I’m sure many people still download our music illegally but the real hardcore fans want the special editions and are willing to pay £25 or more for them.

This is another fantastic example of the business model in action: focusing on connecting with your true fans, focusing on selling scarce goods (remember, the creation of content is a scarcity — existing content is not) and giving people a real reason to buy (such as “special edition pre-order CDs with 128-page hardcover books containing beautiful artwork”).

Unfortunately, after describing this great business model, Kelly veers off on a tangent that doesn’t seem to fit with the point he makes in the first half. Even though his band has figured out how to profit without having to worry about “piracy,” he seems to support the idea that ISPs should be responsible for file sharing, and he doesn’t seem to recognize how promoting file sharing himself would help create more fans to add to that 65,000-strong email list. But, still, even though the end of the post doesn’t quite match with the first half, it’s great to see another band find success with this sort of business model.

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