The Sophistry

Trying to fight a Will-O’-Wisp is a study in frustration for the average Dungeons & Dragons adventurer. These little incorporeal balls of light fly around blinking in and out of sight, and can seemingly disappear when it is hit, creating the illusion that you’re battling thousands of little blinking lights when in fact you’re dealing with just a few of the infernal things.

The same can be said for the next generation of parasitic companies that operate on top of an older infrastructure. From TechCrunch.com comes the story that AllofMP3.com, the infamous Russian MP3 graymarket site, was taken down by the Russian government. The RIAA understandably has been going after AllofMP3.com for years now, and I’m certain that the lawyers and the executives at RIAA consider this a major victory in the war against digital piracy.

But fighting will-o’-wisps isn’t that easy.

For one thing, it’s fairly clear to me that RIAA has no leg to stand on from a legal perspective, because the infringing company is not under U.S. jurisdiction (except by some really tortured logic by which a court in Iran might issue an arrest warrant for Salman Rushdie, a British subject), and it is not bound by American copyright laws:

AllOfMP3’s parent company, Media Services, has taken a firm position that the RIAA should go to hell. In a now famous response to a RIAA $1.65 trillion (yes, trillion) lawsuit for copyright infringement, the company said:

“AllofMP3 understands that several U.S. record label companies filed a lawsuit against Media Services in New York,” an unnamed “senior company official” stated. “This suit is unjustified as AllofMP3 does not operate in New York. Certainly the labels are free to file any suit they wish, despite knowing full well that AllofMP3 operates legally in Russia. In the mean time, AllofMP3 plans to continue to operate legally and comply with all Russian laws.”

A new site, very similar to AllOfMP3 and also owned by Media Services, launched simultaneous with the shutdown. MP3Sparks looks to be a clone of AllOfMP3 in all but name.

And in the comments to the story, one of the commenters writes:

The RIAA is the cat in this cat-vs-mouse game, and as soon as Allofmp3.com is truly down, a few more will pop up. And as soon as Russia cleans up, the same service will be available from other 3rd world countries’ servers. And as soon as they clean up, the music will be available yet elsewhere…there’s no end in sight…I actually enjoy this, it’s quite entertaining to watch!

This is true of the D&D Will-O’-Wisp as it is these parasitic companies like AllofMP3.com as it is Islamist “insurgents” (if you’re the New York Times, BBC, or the Democratic Party) or “terrorists” (if you’re actually a defender of civilization).

And one has to ask, how much did the RIAA spend — and how much is the RIAA continuing to spend — on lawyer fees in order to stomp out AllofMP3.com?  There is a lot of speculation, but here’s one possible hint: the lawyers who tend to represent RIAA and recording companies that are members of RIAA.  That link takes you to a list of lawyers in a specific case, but companies and large organizations tend to have established relationships with a few outside counsel law firms.  So it’s a safe bet that all these RIAA lawsuits are being managed or strategized or actually conducted by one or more of these players.  And the firms are:

• MITCHELL SILBERBERG & KNUPP (Arista, Atlantic, Bad Boy, Sony Music, Universal Music Group, Walt Disney, Virgin, Capitol, etc.)
• CRAVATH, SWAINE & MOORE LLP (New Line Cinema, Time Warner)
• WILLIAMS & CONNOLLY (Columbia Pictures, MGM, Paramount, Time Warner, 20th Century Fox, etc.)
• PIERCE, ATWOOD LLP (RIAA, Atlantic, RCA, Sony Music, Time Warner, Universal, etc.)

Now, I have no idea what the current billing rate is for a Williams & Connolly associate or partner, but I do know Cravath partners typically bill in the $450 - $600 per hour range, with associates getting maybe half of that.  Say your typical legal team is a partner, a senior associate, and a couple of junior associates along with assorted paralegals and support staff, and I think it’s entirely possible that RIAA and its member companies are paying maybe $3,000 per hour on these lawsuits, per law firm.  A 40 hour work-week is $120,000 (!).

If the RIAA and its member companies are spending less than $50m per year on litigation costs, I’d like to know how they’re getting their discounts.

So what is the RIAA buying for $50m per year?  Shitty publicity, image as thugs and goons, and… wholly ineffectual results.

As the commenter to TechCrunch said, so the RIAA took down AllofMP3.com for (let’s just say) $5m in total cost.  So what?  It’s already reborn as MP3Sparks.com, and if that gets shut down, then the owners can simply relocate to Thailand or something and start the exact same website.

This is not how you fight will-o’-wisps.

In the music world, there are any number of suggestions, but the good ones all have to do with changing the environment altogether.  I believe personally that iTunes is responsible for stopping an enormous spread of music piracy.  It’s still not perfect, and $0.99 per track is a touch on the high side price-wise, but most people with disposable income aren’t going to blink at paying a buck a song.  They would rather just pay a buck than have to fiddle with bittorrent or configure some arcane p2p filesharing client or some such.

Simply by charging less money for legal tracks, the RIAA and its member companies could probably change the environment enough to make people like AllofMP3.com not truly worthwhile.  You’ll always have the fringe players who will pirate music; you’ll always have those people who want to download songs for $0.04 from a Russian or Afghani or Mauritanian website.  But the vast majority of consumers would gladly pay $0.25 per song without dorky DRM schemes and such.

Instead of spending millions upon millions of dollars on paying lawyers from Cravath and Williams & Connolly, perhaps the RIAA and its member companies should simply send those dollars to the artists? Or spend it developing a legal alternative to AllofMP3.com where music is worth what it’s worth?  What about floating the price completely and letting the market dictate the value of a certain song?  Set a low baseline (maybe like $0.05 per song) but as the number of requests for download increases, raise the rates on a bid-for-placement strategy?

For example, you can enable let’s say five simultaneous download streams per song.  You get in queue and are told where you are.  The base price is a nickel.  If you just wait your turn, then you ultimately get to download the track for that nickel.  Or, you can raise your bid to jump the line.  You the user can see how many people are ahead of you, and what they’re paying for their track.  By beating their number, you jump ahead of them in the queue.  It might look like this:

#1 - Joe - $1.15
#2 - Jill - $1.05
#3 - Jack - $0.95
#4 - #25
#26 - Steve - $0.15
#27 - Sabine - $0.10
#28 - YOU - $0.05

If you decide that you would rather just pay the $1.10 to jump ahead of Jill, you just bid that amount, and voila, you’re #2 on the queue.  Jill might decide that’s unacceptable and counterbid.  And so on.  Or you might decide that the song isn’t really all that great, and that you’re just willing to wait it out.  Or you may decide that you’re willing to pay $0.50 but no more, wherever that gets you to on the queue.

Let the market decide what the song is worth by putting a value on their time.

Note that the poor college student who is unwilling to pay may wait until 3:30am to download that song for a nickel, but so what?  His alternative is to pirate the song anyhow.

I don’t know if that model works or not; I don’t know if that would be enough to dissuade consumers from copyright theft.  But man, it’s gotta be better than just making more lawyers rich while alienating every single one of your customers….

-TS