The RIAA, the Recording Industry Association of America, is a trade group that represents the recording industry. The group is most famous for suing people who illegally downloaded music in the past decade. Though most people could sympathize with a company being stole from, sentiments quickly turned against the association when it went after people for hundreds of thousands of dollars for downloading a few songs. The exorbitant fees were meant to be a warning against file sharing, but it actually had the opposite effect, galvanizing more people to seek free music.
The RIAA made a terrible miscalculation by attacking its own consumers. Despite the so called piracy epidemic, the industry was making plenty of money in the early part of the last decade. They went on to spend millions of dollars suing their own consumers, when they should have been trying to innovate and develop a better delivery system. The success of Apple’s iTunes store proved that consumers were willing to pay for music if the delivery system was convenient. To this day millions of people purchase music from iTunes.
It should have been apparent to the industry from the outset that they were never going to be able to completely stop piracy. The only way that would be possible is with Chinese levels of control of the internet. The backlash over SOPA and PIPA showed that Americans had no intention of letting anything close to that level of control come to pass. Nevertheless, the RIAA has been waging a losing battle for over a decade, and is now suffering the consequences of fighting a foolish war.
TechCrunch is reporting that the RIAA’s budget has been cut in half from what it was two years ago. The group is also cutting its workforce by 40%. The biggest cut is coming in legal fees, which are dropping by from over $16 million to just over $2 million. The RIAA is finally scaling back the number of lawsuits it files, but now it may be to little, to late.
The fact of the matter is that the powers that be within the industry got a little greedy. Anyone with a semblance of vision could see that everything was going to change after Napster. Pandora’s box had been opened, and there was no going back. The priority should have been taking what was a popular delivery method and exploiting it to the fullest. Apple did so, and ended up dictating market price, to the chagrin of the industry. Streaming services like Pandora and Spotify represent even newer delivery methods that can generate revenue. There is still money to be made in the music business.
The RIAA had to learn a lesson that many industries have learned in the past, and that is that you can not stop progress. The advent of online file sharing meant that some people were never going to buy music again. Just as the drug war has failed to stop people from using drugs, so has the piracy war failed to stop people from downloading music. If the industry had not waged war against its own customers, it might be in a better position today.