Woman Found Guilty of Illegally Downloading Music: Record Companies Lose, We Win

For several years now the music industry has been targeting people that it claims have been illegally sharing and downloading music files over the Internet.  Jammie Thomas of Brainerd, Minnesota, is the first person to go to trial over the issue rather than settle out of court.  Her trial started earlier this week.  On Thursday (10/4/07) the jury found her guilty of sharing 24 songs (the original number was over 1,700) and ordered her to pay $9,250 per song, or $222,000 in damages, to the six record companies who filed the suit.  With this decision, it's likely that others who thought they would take their day in court will decide to write a check instead.

I won't argue as to whether what Ms. Thomas did (or, as she insists, did not do) is legal.  I would like to address the music industry's reasoning behind these suits.  Jennifer Pariser, head of litigation and antipiracy at Sony BMG, portrayed the trial as a fight for survival.  "It is imperative for Sony BMG to combat this problem," Pariser said in her opening statement in the civil trial. "If we don't, we have no business anymore."

Ms. Pariser, I hate to break it to you, but you haven't had business for years.  Record companies pay songwriters and artists a pittance for their music, keeping the lion's share of the profits for themselves.  Ever eager to find another music superstar to dump on a public that cares more about social popularity than musical quality, they've oversaturated the market with so many clones and wannabes that it's not even worth spending the money anymore.  Most importantly, your business ignored the direction in which music listening and purchasing was going, and turned down a golden opportunity to take the lead in the listening revolution, reduce expenses, and make a decent profit.  You stuck your heads in the sand and ignored change until you realized the public didn't want to wait for you and decided to take matters into their own hands.  In short, you helped exacerbate the very problem you're going to court over now.

When analog media (vinyl/cassette) gave way to digital (CD), people quickly figured out that music could be stored on computers, and through extension, the Internet.  Peer-to-peer programs like Napster, Kazaa, and the like sprang up as quick ways to transfer files of all types from one computer to another, again over the Internet.  It didn't take a rocket scientist to put two and two together and realize that music files could be ported between users.  And with the exploding popularity of MP3 and other portable audio players, it was a match made in heaven.

Meanwhile, CDs were selling in the $15-$20 range.  So many artists were being forced to pump out project after project that it was a lucky break if one could find two or more popular songs on a CD.  That's just too expensive.  Ditto for "single" CDs priced in the $2-$3 range.  Music sales were already slumping.  Why not let a person purchase individual songs that she liked off the Internet, avoiding the expense of hard copy and saving some money and some time?  Or what about "test driving" an album or a song before spending the money?

Absolutely not, the record companies insisted.  They'd lose revenue.  So the public thumbed their collective noses at the record companies and started swapping their music files.  Record companies ranted and raved about lost revenue.  They incorporated copy protection into their newest music releases.  Listeners retaliated by cracking the copy protection and sharing the solutions on the Internet.  And the lawsuits mounted.

Fortunately a few companies with some technological foresight saw the moneymaking potential.  They worked out a way to sell songs and albums via the Internet, letting users pick and choose what they wanted.  The price was right, too - 99 cents for most singles, $9.99 for most albums.  Music sales through sites like iTunes, MusicMatch, and URGE soared.  Even Walmart got into the business, with singles prices as low as 88 cents.  Traditional music stores were closing left and right as users flocked to this new, fast, cheap way to get their favorite songs.

Even more importantly, with the costs of copying and printing virtually eliminated, independent artists found they could compete with the big music companies.  Today you're just as likely to be able to purchase the music of the band you heard at your favorite club last week as you are a big-name artist.  And by doing all the work themselves, artists are able to leave the big music companies out of the loop altogether, retaining not only their music and performance rights, but their earnings as well.

So why is the music industry still going after these "music pirates"?  The fact is that these days, there's not much of a market for free music.  The people have expressed what they want, and some companies have obliged.  You'd think it would make more sense to jump on the downloading bandwagon.  But the record industry feels they have been slighted and injured, and they want recompense.  And I think there's a bit of revenge tucked away in there somewhere.

The record execs recoup a small fraction of what they feel they've lost through music downloading.  Users are downloading music left and right and loving their new expanded options.  Supply is up; demand is up; costs are reduced; and users pay less to get more.  Yeah, the record industry called this one on the nose...or maybe they're taking it on the chin?