
Two weeks ago, the Recording Industry Association of America filed a lawsuit in a New York court against AllofMP3, a music download site that operates out of Russia, saying the Web site owes it $1.65 trillion as the result of 11 million downloads since Oct. 2006.
AllofMP3 has maintained, and still maintains, that it is a legal download site that operates under Russian law and pays royalties to Russian Multimedia and Internet Society, (and said record companies have refused all attempted payments from ROMS) and the prices on its site, low as 10-cents a download, reflect the actual cost of a CD in Russia.
What a clusterbuff.
This is one of those situations where no one is right and just about everyone is the bad guy. First, AllofMP3, while operating under Russian law, is not paying the musicians who spend their lives creating art as a career. An accurate system must be put in place to reward these artists for a job well done.
That said; If AllofMP3 is operating under Russian law, which it says it is, it’s the law that is not protecting the artists, not commerce.
Russia is not part of the World Trade Organization, and thus — technically, according to my understanding—does not have to comply with its rules and regulations.
Think of it as diplomatic copyright immunity.
This has to be worked out on the global playing field, not in a New York courtroom that may or may not have jurisdiction in Russia.
The RIAA is not the good guy in the scenario either.
And one could easily argue that the RIAA is a dinosaur that spends its time and money fighting to get theirs while disregarding the integrity and livelihood of the artists it was originally formed to protect.
Take for instance the RIAA’s math skills.
The RIAA apparently feels a single downloaded song has a price tag of $150,000. Wait, that can’t be right. $1.65 trillion divided by $11 million is $150,000. So, yeah, I guess that seems right. You pay a buck a track at iTunes, under Russian pricing it would be about $150,000 a song.
Wrong.
Realistically, it costs around $2-$3 for a legally purchased, physical CD in Russia, as opposed to $10-$20 in the U.S. So AllofMP3 is, like it has been argued before, selling downloads at comparable price points. The company also said it pays 15 percent of its sales to ROMS. So, based on more accurate math, AllofMP3 has socked away $165,000 since October, which would be a more accurate lawsuit total—not 10 million times that amount. In fact, the RIAA could probably just ask ROMS for that money and get it cash in hand—according to AllofMP3.
I have a feeling the RIAA is going to regret this lawsuit in the long run. Eventually, any US governmental organization that investigates this will as the question: Why does a download cost $0.99? They asked a similar question in the 1990s when the RIAA was sued for price fixing.
The cost of recording and distributing music has dropped significantly with the invention of the Internet. Recording studios have been reduced to computer programs like ProTools and distribution on the Net has grown exponentially.
In the next year or so, the physical CD will die (a bold prediction, but that’s where it’s going), and distributing music over the net, which costs virtually nothing, will be the way of the world.
At that time, the RIAA will have to justify why a physical CD (which needs to be pressed, printed, sealed, stored and shipped) has the same pricing structure as a downloaded CD (which is hosted on a server, eliminating all of the printing, shipping and storage costs).
It will be determined that the RIAA has fixed prices, again, and the cost of a download in the US will drop, probably to around $0.50.
The worst part is, during all of the struggles between the players in this fight for global commerce domination, the artists are the ones who will ultimately suffer—whether its at the hands of a faceless international corporation or under the thumb of a fossil bent on protecting itself not its clients.
Labels: AllofMP3, editorial, music downloads, RIAA