The Value (?!) of Suing Ten Year Old Girls

Illegal downloading of music is devastating the Big Music industry to the tune (no pun intended) of billions of dollars of lost sales and market capitalizations. One recording label executive told me that a high profile band his company has under contract sold 4 million CD’s last year. Sounds great, except he said that it should have been 8 million. Half the market disappeared in a haze of cyberspace. I’d be frustrated and angry too if I were him. And I wouldn’t preclude the use of attack lawyers to go after the big-time, mass-volume, truly egregious lawbreakers. But when an industry sends out teams of shark attorneys to harass pimply faced teenagers who illegally download songs off the Web, they’re guilty of strategic myopia and hysterical desperation. Not to mention stupidity. Think I’m exaggerating? I could give you too many sad examples, but try this one, which I picked up in the June 27, 2007 issue of The Oregonian. In 2005, the recording industry sued Oregon resident Tanya J. Andersen, 44, a disabled single parent, accusing her of violating copyright laws by illegally downloading music onto her computer. Initially, Andersen told the corporate lawyers she had never illegally downloaded music but was told she had to pay $4,000 to $5,000 or she would be ruined financially. The lawyers further threatened to interrogate Andersen's 10-year-old daughter, Kylee, and indeed they tried to contact her directy. A woman claiming to be Kylee's grandmother called the girl's former elementary school inquiring about her attendance. Sounds like a nightmare, right? Andersen offered to have her computer inspected. Instead, the recording industry sued her. What happened next is so bizarre that I want to quote The Oregonian directly: The record industry claimed that she used a certain Internet name to illegally download music at 4:20 a.m. on May 20, 2004. Andersen searched the Internet for the name and easily learned that it belonged to a young man in Everett, Wash., who admitted on his MySpace account that he illegally downloaded music. Andersen provided the information to the record industry, but officials responded by publicly accusing her of downloading a series of violent, profane, obscene and misogynistic songs. Andersen was an avid user of mail order CD clubs, so (the officials) knew that Ms. Andersen listens to only country music and soft rock. The recording industry's expert finally confirmed that Andersen's computer had not been used to download music, but attorneys still demanded that she pay money before they would drop the case. "They wanted it to appear publicly that they prevailed," Anderson’s counter suit claims. "When Ms. Andersen declined to pay them, defendants (the recording officials) stepped up their intimidation." Two years after filing the lawsuit, the recording industry agreed to drop the case only if Andersen dropped her counter charges. "They also emphasized that that if she did not abandon her legal rights, they would continue to persecute her and her young daughter, and again demanded to interrogate and confront her little girl," the suit says. Andersen finally filed a motion forcing the recording industry to provide proof that she illegally downloaded music. Hours before the deadline to respond, the recording industry dropped its case. Even if Anderson had really downloaded some illegal tunes, the industry’s storm trooper tactics would have been ridiculously counterproductive. She’s one of millions upon millions around the world. The real issue is this: If you’re a company that’s stuck in a compulsion of using lawyers to defend a broken business model, not only are you merely slowing down the bleeding, (and just temporarily at that), but even worse, you’re also failing to look forward and develop innovative alternative business models that either bypass or better yet, fully capitalize on the new technologies. (Look at what Apple did with iTunes and iPods, for example). Even if you win a few lawsuits, you can’t fight the forward migration of innovation and change. So either you’re part of the process and leading a new agenda, or you’re part of history. As Gwen Stefani’s manager Jim Guerinot says: “The major (recording) labels want to say the glass is half full. I think everybody is getting the message: You better get a fucking smaller glass. The music business is a different game.” Crudely put, but right on target. It’s true for a lot of other industries too. The rules have changed. You’ve got to fill the shrunken glass with new value. And new value doesn’t come from filling the glass with lawyers hell bent on recapturing the past.