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RIAA fights to keep wholesale pricing secret
Ars Technica ^ | 1/3/2007 | Eric Bangeman

Posted on 01/04/2007 8:57:40 AM PST by antiRepublicrat

A proposed order in a file-sharing lawsuit would force the recording industry to divulge closely-held details of their wholesale pricing arrangements. UMG v. Lindor is one of the highest-profile file-sharing cases in the news today, due in no small part to the efforts of Marie Lindor's attorney Ray Beckerman, who maintains the Recording Industry vs The People Blog along with Ty Rogers.

Lindor, like hundreds of others, was sued by the RIAA after a John Doe lawsuit resulted in her ISP turning over information to the record labels tying an IP address allegedly used for illegal downloading to her. Lindor has mounted a vigorous defense against the charges rather than settling with the RIAA as a large number of other defendants have.

The record labels are strenuously opposing Lindor's attempts to gain access to the pricing information. They have argued that it shouldn't be divulged, and if it is, it should only be done so under a protective order that would keep the data highly confidential. The RIAA regards the wholesale price per song—widely believed to be about 70¢ per track—as a trade secret.

The pricing data really may not be all that secret. Late in 2005, New York Attorney General Eliot Spitzer launched an investigation into price fixing by the record labels, alleging collusion between the major labels in their dealings with the online music industry. At issue are "most favored nation" clauses that require a distributor to guarantee a record label the best possible rate. Here's how it works: if Apple signs a deal with UMG for X¢ per track and later agrees to pay Sony BMG Y¢ per track, then Apple will also have to pay UMG Y¢ track, assuming X < Y.

Beckerman argues in a letter to the judge that the only reason the labels want to keep this information confidential is to "serve their strategic objectives for other cases," which he says does not rise to the legal threshold necessary for a protective order. The proposed order would force the labels to turn over contracts with their 12 largest customers. Most details—such as the identities of the parties—would be kept confidential, but pricing information and volume would not.

The pricing information could be crucial for Lindor as she makes the argument that the damages sought by the RIAA are excessive. In this and other cases, the labels are seeking statutory damages of $750 per song shared. Lindor argues that the actual damages suffered by the RIAA are in line with the wholesale price per song, and if that is indeed the case, damages should be capped accordingly—between $2.80 and $7.00 per song—if infringement is proven.


TOPICS: Business/Economy; Crime/Corruption; Government
KEYWORDS: consumerrights; lawsuit; lawyers; musicprice; pricefixing; riaa; shakedown
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I may be missing something here, but where does the actual value play into it when the RIAA is seeking statutory, not actual, damages? Maybe to get the judge to not award the maximum statutory damages (which is rare anyway)?
1 posted on 01/04/2007 8:57:42 AM PST by antiRepublicrat
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To: antiRepublicrat

Lot of music nowadays are lame. It's all garbage. You got K-Fed for one.


2 posted on 01/04/2007 9:02:11 AM PST by Ptarmigan (Ptarmigans will rise again!)
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To: 537cant be wrong; Aeronaut; bassmaner; Bella_Bru; Big Guy and Rusty 99; Brian Allen; cgk; ...

Shady Suits vs. Rock and Roll PING!


3 posted on 01/04/2007 9:05:45 AM PST by weegee
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To: antiRepublicrat

At some point in time, every song ever recorded will be in mp3 format and available free thru somebody...........


4 posted on 01/04/2007 9:08:06 AM PST by Red Badger (New! HeadOn Hemorrhoid Medication for Liberals!.........Apply directly to forehead.........)
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To: weegee

Can't kill rock and roll.


5 posted on 01/04/2007 9:10:40 AM PST by wastedyears ("By failing to prepare, you are preparing to fail." - Benjamin Franklin)
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To: Ptarmigan

Britney Spears, Paris Hilton, Eminem for three more.

Hundreds of thousands more to be named.


6 posted on 01/04/2007 9:11:27 AM PST by wastedyears ("By failing to prepare, you are preparing to fail." - Benjamin Franklin)
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To: Ptarmigan
"It's all garbage."

I'm withya.

Since the 80's most "popular" music is cultural garbage.

7 posted on 01/04/2007 9:16:50 AM PST by lormand (I sell taglines such as this one - PayPal accepted)
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To: antiRepublicrat
The pricing information could be crucial for Lindor as she makes the argument that the damages sought by the RIAA are excessive. In this and other cases, the labels are seeking statutory damages of $750 per song shared. Lindor argues that the actual damages suffered by the RIAA are in line with the wholesale price per song, and if that is indeed the case, damages should be capped accordingly—between $2.80 and $7.00 per song—if infringement is proven.

this lady is turning into RIAA's worst nightmare.

8 posted on 01/04/2007 9:21:41 AM PST by Centurion2000 (Judges' orders cannot stop determined criminals. Firearms and the WILL to use them can.)
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To: antiRepublicrat
I may be missing something here, but where does the actual value play into it when the RIAA is seeking statutory, not actual, damages?

I have no dog in this fight and am unlikely ever to be there, but that is evading the issue, begging the question entirely, so it does not surprise me that the "industry" is focusing on that.

Record companies have no statutory power whatsoever.

Through rent-seeking (and bribes, I am certain of it), the existing excessive statutory penalties exist. The "benefit" to society of such draconian penalties is certainly open to debate and should not be raised to the level of a Constitutional "right" for the musical predators.

An total overhaul of the system is certainly in order. It is no longer 1952, and the damage to the forgotten persons, the performers, is the only damage that should be considered in the public interest. I often wonder how violently the parasites would fight if ALL of the statutory damages went to the performers.

To me, once the "actual damage" to the performer is established, remitting that amount per song "borrowed", would set things right.
Everybody but the parasites win.

9 posted on 01/04/2007 9:26:32 AM PST by Publius6961 (MSM: Israelis are killed by rockets; Lebanese are killed by Israelis.)
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To: antiRepublicrat

I've heard elsewhere that an absolute defense to any RIAA lawsuit of this kind is the statement that "An IP number is NOT a human being." And if this statement is made, the RIAA will drop the lawsuit, fearing that a legal precedent will be established that fully affirms this fact.

This is especially true if your computer is on a WIFI network, and "you haven't put a password or firewall on your network until just recently."

From that point, unless they find physical copies of copyrighted material in your possession, there is no way a 'preponderance of the evidence' can be asserted.


10 posted on 01/04/2007 9:30:36 AM PST by Popocatapetl
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To: Centurion2000

>>this lady is turning into RIAA's worst nightmare.<<

There was speculation a few years ago that if anyone got a good attorney and fought one of these cases, they would end.

I haven't bought a CD since 1997, but, to be fair, it is not due to music downloading. It is due to the fact that nothing worth buying has been released.

I have LOTS of concerts on DVD though!


11 posted on 01/04/2007 9:33:43 AM PST by RobRoy
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To: Centurion2000
this lady is turning into RIAA's worst nightmare.

At first I had no sympathy for people who found themselves in that position, but over the years my position has reversed itself.

Stealing is still wrong.
Legalized stealing, wholesale, under a questionable "statutory" blanket, is infinitely worse.

Where can we send contributions to help this lady's defense?

12 posted on 01/04/2007 9:34:19 AM PST by Publius6961 (MSM: Israelis are killed by rockets; Lebanese are killed by Israelis.)
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To: Popocatapetl

When I moved into my new house, I used three neighbors wi-fi connections before I got my cable connection.

Gee, I hope none of them get sued... ;)


13 posted on 01/04/2007 9:35:53 AM PST by RobRoy
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To: antiRepublicrat

Headline from the Onion a couple years back read something like, "RIAA Sues to Stop People from Telling Friends about Songs."


14 posted on 01/04/2007 9:37:46 AM PST by zook (America going insane - "Do you read Sutter Caine?)
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To: Publius6961
but that is evading the issue, begging the question entirely, so it does not surprise me that the "industry" is focusing on that. Record companies have no statutory power whatsoever.

Statutory penalties exist to allow people to effectively sue for infringement even when the actual value of the works infringed are so low as to not provide a deterrent to infringement (free software, anyone?). They are a good thing.

It's also either-or -- you can request either statutory or actual damages. In the case where somebody sold 100,000 copies of your $20 book without license, you file for actual. In the case where somebody sold 1,000 copies of your book unlicensed, you ask for statutory. Statutory is also good when the actual value is unknown.

Through rent-seeking (and bribes, I am certain of it), the existing excessive statutory penalties exist.

The maximum statutory damages were raised recently (undoubtedly on the orders of the copyright cartel), but even the old ones were rarely awarded. In fact, I've never heard of the maximum for willful infringement being awarded. Before the raise, Playboy counted one for-profit online infringer's liability for statutory damages at around 400 million dollars, but Playboy only got a few million.

15 posted on 01/04/2007 9:41:45 AM PST by antiRepublicrat
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To: Publius6961

"this lady is turning into RIAA's worst nightmare.
At first I had no sympathy for people who found themselves in that position, but over the years my position has reversed itself.

Stealing is still wrong.
Legalized stealing, wholesale, under a questionable "statutory" blanket, is infinitely worse.

Where can we send contributions to help this lady's defense?"


Here's the real problem. Had digital recording been invented first, RIAA would never have gained as much power as it has. That is, if songs had always been as free as the air we breath to reproduce, the economic environment would be completely different for intellectual property.

In other words, RIAA is an appendix that needs to be excised at some point because it's vestigial. It was useful at some point, but is now just a source of infection.


16 posted on 01/04/2007 9:43:55 AM PST by FastCoyote
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To: lormand

"Rock and roll's been going downhill ever since Buddy Holly died."


17 posted on 01/04/2007 9:45:41 AM PST by dfwgator
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To: Publius6961
Stealing is still wrong.

I agree. Putting a CD in your pocket and walking out of the store is stealing. Unauthorized copying of a copyrighted work is not stealing, it may(!) be an infringement on the author's right to control the reproduction of that work.

Legalized stealing, wholesale, under a questionable "statutory" blanket, is infinitely worse.

If she indeed infringed on those copyrighted works, then she will pay.

18 posted on 01/04/2007 9:53:09 AM PST by antiRepublicrat
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To: Publius6961
At first I had no sympathy for people who found themselves in that position

BTW, the RIAA's campaign is designed not to get people into court, but as a campaign of extortion against the people. Here's a quick overview of how it goes:

The RIAA doesn't care if you are innocent. In one case the woman had the people at the extortion department agreeing that she couldn't have been sharing songs, but they refused to drop the case as a matter of policy since "that would encourage other people to fight" (almost exact quote).
19 posted on 01/04/2007 9:59:32 AM PST by antiRepublicrat
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To: antiRepublicrat

The whole John Doe/IP approach by the RIAA has no legal validity. In any other area of life, using a method such as this to target people for lawsuits would have gone down in flames a long time ago. Shame on our court system for allowing this kind of intimidation to take place.

I am not commenting on the legality or morality of DLing music. These are completely separate issues.


20 posted on 01/04/2007 10:04:47 AM PST by ChildOfThe60s (If you can remember the 60s......you weren't really there)
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