Monday, November 5, 2012

A copyright tale of RIANZ and Rihanna

Rihanna Loud TourWhat do Rihanna, Taio Cruz and Muse have in common? Their music is popular. Apparently. Their music costs NZ$2.39 per track if you buy it on iTunes. And NZ$215.10 in lost sales if you download it illegally.

Calculation of damages

There's quite a lot of difference between $2.39 and $215.10 when you are talking about a single music track. In my earlier blog post Three Strikes and Not Out I talk about a student who was in the gun for unlawful downloading carried out by her or her flatmates. The Recording Industry Association of New Zealand (RIANZ) produced evidence suggesting that each copied music track meant $215.50 in lost sales.

The folks at TechLiberty have very kindly published the submission that RIANZ prepared for its appearance before the Copyright Tribunal. You can download a copy here.

The Uploading problem

An award of $2.39 per track might be appropriate where a sound recording has been downloaded once by the account holder. The reasonable cost of purchasing the work is what the account holder would have paid if he or she had purchased the work legally.

But uploading is an entirely different story. Uploading, said RIANZ, is more harmful as it enables multiple potential unauthorised downloads by third parties. There probably needs to be some sort of downward adjustment to reflect the reality that not every illegal download represents an actual lost sale. But uploading is still bad.

The empirical data

The problem is that RIANZ doesn't know how many illegal downloads of Dynamite or Only Girl (In the World) were made from the music uploaded by the account holder or her flatmates. Current internet detection services don't provide this information to RIANZ. So it was time for an educated guess.

RIANZ says that in late 2007 the International Federation of the Phonographic Industry (IFPI) commissioned a report from UK Internet intelligence agency Envisional Limited. IFPI wanted to know how many copies of an album would be made from a single installed client on the BitTorrent network by other persons on the same network during a one month period.

A total of 17 albums were chosen to model a typical uploader. The content was balanced between recent releases, current and classical albums.

The research showed that, on average, each album was downloaded the equivalent of 90 times in a month. In a real life situation this figure may be even higher. Those 90 downloads may each seed a further 90 downloads.

The conclusion

RIANZ detected the unlawful activities of the account holder over successive monthly periods. It was therefore reasonable, argued RIANZ, for the Copyright Tribunal to adopt a baseline figure of 90 downloads for each infringement identified. In other words, each uploaded track.

As I have said before, RIANZ withdrew the case. It didn't make it to the Copyright Tribunal so this calculation of damages was never tested. It was a great outcome for the account holder. Not so great for RIANZ. And not so great for those of us left wondering whether this calculation of damages is fair and reasonable.

Photo courtesy of author Lauren Fritts under Creative Commons licence.

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