Wednesday, July 14, 2010

Return On Investment

You know the record business - sometimes you throw money behind someone and it pays off in huge record sales, sometimes it doesn't. In the latter category:

The RIAA paid Holmes Roberts & Owen $9,364,901 in 2008, Jenner & Block more than $7,000,000, and Cravath Swain & Moore $1.25 million, to pursue its "copyright infringement" claims, in order to recover a mere $391,000. [ps there were many other law firms feeding at the trough too; these were just the ones listed among the top 5 independent contractors.]


If the average settlement were $3,900, that would mean 100 settlements for the entire year.

As bad as it was, I guess it was better than the numbers for 2007, in which more than $21 million was spent on legal fees, and $3.5 million on "investigative operations" ... presumably MediaSentry. And the amount recovered was $515,929.

And 2006 was similar: they spent more than $19,000,000 in legal fees and more than $3,600,000 in "investigative operations" expenses to recover $455,000.

So all in all, for a 3 year period, they spent around $64,000,000 in legal and investigative expenses to recover around $1,361,000.
But that's the wrong way to look at it. Because you know, piracy costs the recording industry $8.5 billion dollars every 12 minutes. So in fact, these lawsuits netted them over $900 TRILLION DOLLARS! They turned an immense profit on this. This is why the record companies are hugely profitable now, because of this virtual income stream of saved piracy money. (Source: The American Bar Association)

Well, SOMEONE must have come out ahead from these lawsuits.

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