“The law here is clear, as are the consequences for breaking it.” - RIAA
After two days of testimony and four hours of deliberation, the RIAA surprisingly won a pivotal case yesterday when a federal jury in Minnesota found a woman liable for sharing copyrighted MP3s. For a mere 24 songs, Jammie Thomas (after a public whipping) has been ordered to pay a whopping $220,000 to all four down-home, friendly music groups Universal Music Group, Sony BMG, Warner Music Group, and particularly EMI Group (Capitol, specifically). The payment breaks down to $9,250 in statutory damages per song, which could've been been as low as $750 per song ($18,000 total) or as high as $150,000 ($3.6 million total).
The case, which was the first jury trial in the industry's lawsuits targeting individuals, is pivotal because the judge essentially ruled that the mere act of making MP3s available for download is viewed as infringement. Meaning: the RIAA did not have to prove that any songs were actually transferred. The RIAA centered its accusations around Thomas having a Kazaa user name linked to a web address, as well as replacing her computer's hard drive in order to cover-up evidence.
Since 2003, 30,000+ people have been accused of illegally file-sharing, according to The New York Times, but most of them settle out of court for $4,000 on average. The RIAA claims to lose $4.2 billion per year due to file-sharing, but, as Paul Resnikoff of Digital Music News points out, it also has to do with "increased competition for entertainment dollars, antiquated pricing strategies, and an incredibly hostile stance towards consumers." Nobody ever said capitalizing on digital music was going to be easy, but these pricey lawsuits will be the end of major labels if they can't properly engage with the internet, diversify their revenue, adjust their pricing models, and tap deeper into licensing and distribution. Easier than it sounds, I'm sure.