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Too Big to Not Fail

July 14, 2010

The RIAA, MPAA (and Big Content generally) are often found at the intersection of mistaken cost-benefit analysis and misconceived social and legal policy.  But today, the failures of the RIAA stand in even more stark relief, as it has been revealed that the RIAA paid its lawyers more than $16,000,000 in 2008 to recover only $391,000.  That’s a return of -97.55% on their investment.  Nicely done.

Aside from totally wasting the capital derived from the artists’ creative works themselves on the prosecution of (mostly) children, the other tragedy here is that there is almost no chance the RIAA will learn from this stunning result.  After all, the RIAA is subject to the same forces of institutional bias where the institution is never capable of admitting it was ever wrong to pursue the goals it was organized to achieve, and instead the institution demands more authority and power to pursue its original mission.  I would predict that insofar as its behavior changes at all, the RIAA will intensify its lobbying efforts and requests additional legislation or legal “safeguards” that do one or more of the following: (1) makes enforcement less expensive to artists by requiring the government to do some of the enforcement through a public entity, (2) lower the legal bar to recovery by making the causes of action more substantively easy to satisfy, or (3) increases the returns to successful lawsuits by increasing the fines that are already ridiculous and ineffectual as deterrents.

I don’t think any of these prospects are all that surprising at this point in the RIAA’s history, but they are closer to reality than you think.  The proposed version of the ACTA treaty that is lumbering toward passage already contains a nuclear option of the first variety, by empowering customs officials to scan devices for pirated intellectual property at the border and making the “importation” of such materials a criminal offense.

It’s clear that if the RIAA alone has $16 million to drop on frivolous lawsuits, it is joined by the MPAA, ASCAP (the music licensing clearinghouse), and other arms of Big Content that all have budgets and institutional incentives to join in the battle against limitations on copyright enforcement, even if they are institutionally incapable of understanding the underlying sense of that shift.  Instead, they wildly lash out at institutions like Creative Commons, the absurdity of which Larry Lessig easily points out:

These [Creative Commons] licenses are, obviously, copyright licenses. They depend upon a firm and reliable system of copyright for them to work. Thus CC could have no interest in “undermining” the very system the licenses depend upon — copyright. Indeed, to the contrary, CC only aims to strengthen the objectives of copyright, by giving the creators a simpler way to exercise their rights.

And though I really respect Larry Lessig, I don’t think that any editorial responses to outlandish attacks by ASCAP are going to turn the tide in the minds of legislators spending their free time seeking reelection campaign dollars, no matter how compelling the argument may be.  I suppose I believe that, in the short run, realpolitik and a balance of power is the more compelling and sensible approach to the dynamics that underlie congressional legislation, and a strong organized opposition will be necessary to meet Big Content head on. That is where the American public is likely to be found misconceiving the cost-benefit analysis.


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