updated 06:35 pm EDT, Wed July 14, 2010
RIAA paid $64m over three years to get $1.4m
Ray Beckerman, the New York lawyer famous for fighting the recording industry's many lawsuits against what it alleges are illegal downloaders, has exposed what he says is a major financial flaw in the RIAA's business plan. On his blog, Beckerman found that the actual damages paid back were well below the actual legal expenses. Between 2006 and 2008, over $64 million was spent tracking customers but only extracted $1.36 million in successful lawsuits or settlements.
In 2008 alone, law firms were paid a total of $17.61 million to pursue copyright infringement claims. This returned just $391,000. The situation was worse the year before, as the music association paid $21 million in lawyer fees and $3.5 million on investigative operations, which he believes was the MediaSentry project. This resulted in just $515,929 in recoveries. In 2006, the RIAA spent over $19 million on lawyers and more than $3.6 million in investigative operations, all for an income of $455,000.
The disproportionate amount was proof to Beckerman that the RIAA is not in the business of making money but rather is on a mission to dissuade users from downloading files under the threat of legal action. Since the lawsuits, the organization has backed away from significant new legal action and has tried to press Internet providers for anti-piracy warnings. Some suits are still ongoing but have often hurt the RIAA as it has had some of its levied penalties ruled as excessive.