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RIAA's Gaze Turns From Users to ISPs in Piracy Fight

December 19, 2008 3:30 PM ET

After suing more than 35,000 people for illegally sharing music online since September 2003, the Recording Industry Association of America has canceled its much-publicized lawsuit campaign. The RIAA will instead work with Internet service providers to identify and contact — and sometimes penalize — users who continue to trade copyrighted music.

"We're faced with the reality of 'this shit isn't working.' And legally the ground is getting shakier in terms of winning these lawsuits. And it's costing money," says a major-label source familiar with the lawsuit discussions. "So, time to move on."

The RIAA, a trade association that represents the world's biggest record labels, has made headlines for suing 13-year-old Brianna LaHara as well as a multitude of students, flight attendants, engineers and karaoke DJs over five years. But while the RIAA insisted the lawsuits were crucial for educating customers that file-sharing is illegal, they haven't reduced piracy, according to BigChampagne.com numbers.

Some at labels have recently been vocal about stopping the lawsuits, notably Warner Music chairman Edgar Bronfman Jr. Album sales have dropped from 636 million in 2003 to 585 million last year — and another 14 percent in 2008, according to Nielsen Soundscan. Eventually, the major-label source says, it became obvious even to the most aggressive lawsuit supporters that the lawsuits weren't worth pursuing. "It probably started when they started looking at budgets for the coming year," he adds. "There was an acknowledgement, finally — 'where are we headed with this program? Piracy hasn't decreased.' Everybody realized this was making us the most hated industry since the tobacco industry. Everybody got to the same place at a different time." RIAA reps would not be quoted for this story, but agreed to confirm certain details.

Although pending litigation will continue, the recording industry agreed to stop new lawsuits after working with Andrew Cuomo, New York's attorney general, and unidentified ISPs throughout the fall. Under the new plan, copyright owners will send infringement notices to ISPs, who will in turn notify their users — and possibly sanction them if they don't respond to numerous messages. "It's a great thing," says Charles Lee Mudd, a Chicago attorney who has represented more than 100 people sued by the RIAA. "Many of my clients did not know what they were doing was illegal. Many thought they were safe or fine. Had they learned otherwise, they would have ceased immediately."

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