Please ensure Javascript is enabled for purposes of website accessibility

The RIAA's Win Is Yet Another Loss

By Rick Munarriz – Updated Apr 6, 2017 at 1:50AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Another courtroom "victory" makes the music suits even more like Kobe Bryant.

It's another pyrrhic victory for the music industry.

The Recording Industry Association of America (RIAA) won another battle against music piracy this week, and by won I naturally mean lost.

Awarded $1.92 million in a case against a 32-year-old mother who presumably downloaded and shared 24 different songs, the RIAA is toast. It knows it can't collect the money from the woman of modest means, and all this case does is make more music fans turn against the major record labels.

Come on: $80,000 per track, for making a Richard Marx song available on peer-to-peer trading site KaZaA? Are you guys out of your mind?

The music industry will argue that it's sending a message. You don't have to be a power user, swapping countless MP3s or BitTorrents, to be nailed for piracy. Unfortunately, that message will get drowned out by the wider perception that the music industry is just greedy and out of touch.

No torch and pitchfork for me, thanks
I'm not one of those RIAA haters. I fully grasp that pirated music, movies, and software are illegal. I would like to think that the same person who downloads the new Green Day album or the latest James Bond flick would never walk into a store and swipe a CD or a DVD.

I was young once. I was in a band signed to Sony's (NYSE:SNE) Columbia Records. I respect the time and effort it takes to write, rehearse, and record music. Unfortunately, the music industry also assumes that someone who would illegally download a track for free would otherwise pay for it.

That is what the four major labels -- Universal, EMI, Sony, and Warner Music Group (NYSE:WMG) -- don't get. Illegal downloading isn't what doomed the industry. It's the greater presence of the Internet that has made the labels less relevant.

Cyberspace killed the radio star
The Internet armed garage bands with the tools to reach the masses. An unsigned band from Austria can set up a free page on News Corp.'s (NASDAQ:NWS) MySpace Music in minutes, and an hour later, it can make a new fan in Des Moines. Some of the more popular channels on Google's (NASDAQ:GOOG) YouTube similarly belong to acoustic guitar-strumming vocalists.

It's not just the Internet that leveled the playing field, of course.

  • Home-computing cats like Apple (NASDAQ:AAPL) have turned quality home-recording software into a reasonably cheap art form. There's no longer a need to spend five or six figures in a recording studio, so bands no longer need to be bankrolled by a major.
  • Terrestrial radio used to own the eardrums, and labels had an easy time influencing music directors' playlists. These days, you have commercial-free options such as Sirius XM Radio (NASDAQ:SIRI) that can dig deeper into music genres, as well as an infinite number of smaller Internet-radio startups.
  • Even established artists are embracing what the likes of Live Nation (NYSE:LYV) offer. A recording contract is valuable only if it's lumped together with revenue sharing on the merchandising and performance fronts, and cheap direct distribution helps artists achieve those more complete solutions.

Clueless, the soundtrack
Maybe the RIAA and its labels were high-fiving on their way out of the courtroom this week. Maybe they also don't realize that in their ideal world, where not a single label-owned track would ever be pirated, their artists would be even less relevant than they are now. Music fans would just move on to smaller, more accessible bands that realize that the Web and free digital distribution are promotional tools, and more than just a standalone business model.

Nice going, RIAA. You're the Kobe Bryant of the music industry. You may have won it all this month, but that just means that even more people despise you now than you'll ever know.

Other ways to rock the RIAA:

Google is a Motley Fool Rule Breakers recommendation. Apple is a Motley Fool Stock Advisor recommendation. Try any of our Foolish newsletter services free for 30 days.

Longtime Fool contributor Rick Munarriz has been a music fan since birth. His band Paris by Air was once signed to Sony's Columbia Records label many moons ago. He owns no shares in any of the companies in this story and is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Sirius XM Holdings Inc. Stock Quote
Sirius XM Holdings Inc.
SIRI
$5.81 (0.00%) $0.00
Alphabet Inc. Stock Quote
Alphabet Inc.
GOOGL
$98.17 (-0.58%) $0.57
Apple Inc. Stock Quote
Apple Inc.
AAPL
$150.77 (0.23%) $0.34
Sony Corporation Stock Quote
Sony Corporation
SONY
$66.70 (-2.53%) $-1.73
Twenty-First Century Fox, Inc. Stock Quote
Twenty-First Century Fox, Inc.
FOX
Live Nation Entertainment, Inc. Stock Quote
Live Nation Entertainment, Inc.
LYV
$73.78 (-1.98%) $-1.49

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
329%
 
S&P 500 Returns
106%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/26/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.