Nine months after the music industry accused her of illegal downloading, Vickey Sims insists she's innocent and refuses to pay the $75,000 minimum fine. The Alexander City, Alabama, hairdresser had no idea her teenage daughter Nicole Phillips had 1,200 MP3s by George Strait, Kirk Franklin and others on the family computer, and Phillips had no idea getting free songs online was wrong. "We're just like, 'Why are they picking on us? There are so many people doing this,'" Sims says. "People come in my shop, and they talk about their kids and their buddies doing it."

Sims is one of 11,051 "bad-luck lottery winners," as one lawsuit recipient calls them, sued by the Recording Industry Association of America for illegally downloading and sharing copyrighted music. The RIAA says it generally goes after people who have downloaded more than 100 songs but will not reveal any other specific criteria. The suits demand up to hundreds of thousands of dollars in damages -- and even the few defendants who can afford to pay are more inclined to settle for $3,200 to $4,000 than fight a costly court battle against music-industry lawyers.

No case has gone to trial, but so far the RIAA has shown little sympathy for people like Sims and Phillips, who did her file-sharing on Kazaa between 2002 and 2003, when she was sixteen and seventeen, months before record labels announced their plan to sue downloaders. The first thing Sims did after receiving the lawsuit in the mail last August was to hire a local lawyer, Angela Hill, who believes she can get a dismissal because "they're suing Vickey, and Vickey does not even know how to download a song." But many of the RIAA's lawsuits have been filed against the parents of downloaders, and the hundreds of parents who say they had no idea what their children were doing online remain stuck with the bill. "Parents could win the lawsuit, but that doesn't mean a damn thing," says Megan Gray, a Washington, D.C., intellectual-property attorney, "because all the RIAA will do is dismiss the lawsuit and file against the children. Ignorance of the technology is no excuse."

Still, many accuse the record labels of unfairly criminalizing music fans when they could have put the money and effort into educating them about illegal downloading instead. "The RIAA has made a lot of this illusory campaign of education," says Charles Lee Mudd Jr., a Chicago attorney who represents several sued downloaders. "I haven't seen it, and my clients haven't seen it. It's got to be more than a few advertisements on VH1 or MTV."

One thing is clear: The lawsuits have failed to stop, or even slow, illegal file-sharing. An estimated 8.6 million Americans were trading copyrighted songs at any given time in April 2005 -- up 100 percent from 4.3 million in September 2003, when the suits began, according to a study by BigChampagne, which tracks file-sharing trends.

Cary Sherman, the RIAA's president, questions BigChampagne's data and points to other studies that show a decrease in file-sharing. But the BigChampagne data is the most widely accepted -- in fact, BigChampagne compiles it for the record companies for marketing purposes.

"Enforcement is a tough-love form of education," Sherman says, "but it really works. It has made a profound difference in public awareness -- just a sea change from where public perception was before the lawsuits began."

But Charli Johnson, a twenty-one-year-old student in Winfield, Kansas, who settled for about $3,000 last summer, echoes many of the lawsuit recipients when she says, "Personally, I don't think it's going to stop anyone from downloading. All my friends know I got sued and how much I got sued for -- and they're still downloading music. It's not a reality for them."

The RIAA campaign kicked off in September 2003, when it circulated 261 lawsuits against downloaders active on Kazaa, Grokster and others. The plan for the lawsuits had begun much earlier, however. By late 2002, record-label chiefs and RIAA officials were meeting regularly -- often in heated debate -- to discuss the issue. At the time, the music industry was in the midst of a downturn, slashing rosters and laying off thousands of employees. CD sales dropped by nearly 200 million from 2000 to 2003. Economic recession was a factor, but executives blamed the problem on Internet piracy. They insisted that something had to be done to stop the millions of music lovers who were using services like Kazaa, Grokster and LimeWire to get their tunes for free. In phone and e-mail conferences, the executives discussed suing the downloaders. Several power players -- including Roger Ames, then chairman of the Warner Music Group, and Hilary Rosen, then the RIAA's president -- insisted the industry take two steps before it began suing downloaders.

First, the labels unveiled a series of ads featuring stars like Britney Spears to remind fans that downloading free music is illegal. Then they began hashing out how to create a legal online alternative to Napster and Kazaa. Around that time, Apple Computer's Steve Jobs showed up at label boardrooms with new software called iTunes, which was quickly accepted as a legal downloading alternative. After that, recalls Rosen, "I think everybody was on board with the lawsuits."

The final piece fell into place in April 2003, when a Los Angeles district judge ruled that the peer-to-peer service Grokster could not be sued for the actions of its users. (That case is currently being heard on appeal by the U.S. Supreme Court.) Only those who used the service to illegally download free music, the court suggested, could be held responsible. Unable to go after the file-sharing services, the labels agreed unanimously to take downloaders to court. "Everyone felt like it was too bad that it had to happen," says a major-label source. "We didn't want to be suing, but there weren't a lot of alternatives. It's one thing when you're looking from the outside and saying how stupid this is -- but it's another thing when half your company gets laid off."

To figure out who to sue, the RIAA hired a team of twenty technicians to surf file-trading sites like Kazaa, identifying users who did the most downloading. The RIAA knew that the lawsuits would generate terrible press -- and by the second day, the campaign had already backfired. Brianna LaHara, a twelve-year-old who lives in a New York housing project, landed on the front page of the New York Post, portrayed as a victim of the music industry's war on its customers.

The RIAA was undeterred. "I thought the publicity was bad," recalls Rosen, who is now a Democratic Party strategist. "But it was New York Post bad -- it wasn't really bad bad."

Eighteen months later, the industry continues to announce another wave of lawsuits nearly every month, including the latest round of 725 in late April. Earlier that month, the RIAA expanded its campaign, suing 405 college students who downloaded free music via Internet2, a faster, more exclusive online network running on many campuses.

The RIAA has settled 2,484 cases out of court, with the average settlement between $3,000 and $4,000. (The association channels all the settlement money back into anti-piracy enforcement programs.) In what the RIAA's Sherman calls a "remarkable coincidence," CD sales started to inch up the month the lawsuits began, and Apple's iTunes Store has sold 400 million legal ninety-nine-cent downloads since it opened in April 2003. Still, overall sales remain down 8.6 percent since 2000, and it's difficult to draw links between illegal downloading and record sales; one could just as easily argue that a lack of steady blockbuster records has caused the declines.

In the process, the lawsuit campaign has created significant financial hardships for thousands of music lovers. Janet Bebell was a freelance accountant in Denver when the RIAA sued her in September 2003: Her twenty-three-year-old son, it turned out, had downloaded music from Kazaa on the family computer. Faced with a settlement of almost $4,000, Bebell raised $250 in donations through Downhill Battle, a group of activists dedicated to fighting the major record labels, and she's considering putting the rest of the settlement on a credit card. "I don't have a fallback option," she says. "That's what they can do -- really destroy my credit."

Cindy Lundstrom, a legal secretary in Scottsdale, Arizona, is also charging the settlement to her credit card. She was sued in March 2004 after her sixteen-year-old daughter, Chelsea, downloaded 700 hip-hop songs. Chelsea, a straight-A student and homecoming queen at North Canyon High School, offered to pay the $3,000 out of her savings from an after-school job at a hair salon, but her mom told her to keep the money. "That is her savings for college," Lundstrom says.

A few have fought back -- so far, without success. Michele Scimeca, an insurance clerk in New Jersey, made headlines last year when she countersued the trade group under federal anti-racketeering laws, accusing the major record labels of bullying their customers for money. But a judge dismissed her suit earlier this year, and Scimeca plans to declare bankruptcy. She says the music industry is demanding a total of $50,000 in penalties and legal fees to settle her case -- more than three times her family's annual salary -- although the RIAA denies her claim. "You watch MTV's Cribs, and all those superstars are making millions of dollars," Scimeca says. "And I'm sitting here with my secondhand furniture with twenty-year-old carpets on the floor, trying to keep my kids in decent clothes." But she's unlikely to get any sympathy from music-industry executives who, whether or not they can prove that suing music fans is a successful deterrent to downloading, are committed to the strategy. "I don't see the lawsuits stopping," says Zach Horowitz, president and chief operating officer of the Universal Music Group. "It's important for people to know there are repercussions for these kinds of actions."

By the Numbers:

A year and a half after the RIAA began suing downloaders, it is estimated that twice as many people are now using peer-to-peer software like Kazaa. Here are some figures (according to the RIAA, BigChampagne) from the music industry's courtroom efforts to stop downloading:

Number of peer-to-peer users in August 2003, the month before the lawsuits began: 3.85 million

Number of peer-to-peer users in April 2005: 8.63 million

Number of people sued by the RIAA to date: 11,456

Number of people who have settled with the RIAA to date: 2,484

Maximum amount you can be sued per song: $150,000

Average settlement: $3,600

 

Article posted by CEO, D.G. L.
danilo@trustsoft.com

Article id: 2448499