RIAA profits nearly 100 M by suing P2P users

The following estimate comes from Pirate Times:

Let’s say all 18,337 USA citizens sued have settled for $5,000 USD each, to avoid going to court and possibly losing their homes. That would give the RIAA massive profits of $91,685,000! The RIAA has profited nearly $100million by suing individual who are too helpless to fight back, since their ’sue em’ all’ campaign began, years ago.

This is about one quarter of all the money they make from ringtone downloads for 2005, and also a pretty hefty chunk of money. Especially considering that P2P users are in fact, quite likely to buy music after they've downloaded it.

The Rolling Stone magazine offers another explanation for declining record sales for major record companies:

As the majors stumbled, independent labels gained market share, accounting for eighteen percent of CD sales in '05. Indie labels proved especially adept at Internet marketing via outlets like MySpace; the emo label Victory Records sold 558,000 copies of Hawthorne Heights' album The Silence in Black and White without radio play. And several hip indie acts -- the Arcade Fire, Interpol and Bright Eyes -- sold more than 250,000 copies each. The indie model of earning profits on a broad range of small-scale releases, rather than focusing on blockbusters, may offer a new direction for the majors. "The major labels want to say the glass is half full," says Gwen Stefani's manager Jim Guerinot. "I think everybody's getting the message: You better get a fucking smaller glass. The music business is a different game."

Update: oops, I said 100M/year; I meant 100M total until now.




Comments

agree with RS analysis, major labels are facing a major restructuring. But how long can they keep on procrastinating and struggling to maintain the status quo? cd sales just keep on declining, slowly but surely.

--Sami O, 05-Apr-2006


Three to five years? It's just a matter of one of them bailing the ship and try, then the rest will follow.

--JanneJalkanen, 06-Apr-2006


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