Sunday, August 26, 2012

Is The RIAA Dying?

MPAA-RIAA lobbying image from Bobby Owsinski's Music 3.0 blog
For much of the last 10 years, the Recording Industry Association of America (RIAA) has been a symbol of what's wrong with the music business. Traditionally the major record label's lobbying group, it also serves the purpose of declaring gold (500k units), platinum (1 million) and diamond (10 million) awards to the biggest selling records, but when it became the anti-piracy arm of the labels, most musicians and consumers agree it went too far. Suing your customers never bodes well for an industry and that's just what they did, raising a great deal of animosity towards the recording industry and never making a dent in piracy despite the huge amounts of money spent in the courts.

Now it looks like the record label's contraction is finally taking its toll on the RIAA, as their revenue has dropped by 45% over the past two years, from $51.35 million to $29.1 million. Why? There are fewer labels to contribute to their coffers for one thing, but also the fact that the remaining labels are making less money means that they pay less, since that's how the membership dues are determined.

As a result, you'll notice that the association has quietly called a halt to lawsuits against individual file sharers. It's just too expensive, since the reason why the file sharers are doing it in the first place is they don't have any money. Even if they win, they lose since you can't get blood from a stone. Going after Pirate Bay and Megaupload is a lot more efficient, although I think the reason why piracy is falling has to do more with the natural progression of subscription and free streaming models like Spotify and Pandora than anything the RIAA ever did.

What the RIAA is still doing to lobbying politicians to support its legislative agenda, with reports that they've spent as much as $90 million dollars over the last decade (should that have gone to artists instead?). Most recently, the association has been hitting congress and the courts hard trying to make it the ISP's responsibility to either block any file sharer or turn over their names for prosecution. Don't expect that to happen any time soon, thankfully.

The point is, with its cashflow down and threatening to decrease every year from now on, could the days of the RIAA be numbered?

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