RIAA Notorious Market Report 2012
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Filed via www.regulations.gov, Docket No. USTR–2012–0011
Stanford K. McCoy, Esq.Assistant U.S. Trade Representative for Intellectual Property andInnovationOffice of the U.S. Trade RepresentativeWashington, DC 20508Re:
RIAA Written Submission Re: 2012 Special 301 Out-of-Cycle Review of Notorious Markets: Request for PublicComments, 77 Fed. Reg. 48583 (August 14, 2012)
Dear Mr. McCoy:Pleasefind the submission of the Recording Industry Association of America(RIAA) in response to the federal register notice in the above-captioned matter.The Recording Industry Association of America (RIAA) is the trade organizationthat supports and promotesthe creative and financial vitality of the major musiccompanies. Our members are the music labels that comprise the most vibrantrecord industry in the world. RIAA members create, manufacture and/ordistribute approximately 85% of all legitimate recordedmusic produced and soldin the United States.We greatly welcome this initiative designed to shine light on businesses whooperate notorious markets for infringing materials, and who generally eitherdirectly profit from the sale or other distribution of infringing materials, or whoprofit from facilitating such theft—in many cases through the sale of advertisingspace.This submission identifies a broad range of online businesses involved in thedistribution or making available of infringing materials, from sites dedicated tothe pursuit of infringement—like the Pirate Bay, or Brazil’s De graça é maisGostoso (in English: “Free is much better”), to sites operated by large well-funded companies that believe that it is acceptable to fuel piracy to advancetheir own commercial interests, like Russia’s vKontakte, Ukraine’s ex.ua, andChina’s Xunlei and Sohou/Sougou. In some sense, services such as vKontakte,ex.ua, Sougou and Xunlei are the most reprehensible of actors given that theywant to appear as legitimate actors, and have functions unrelated to piracy, yetoperate network services that include features that intentionally and effectivelyinduce infringement. These services deliberately gain market share by providingaccess to infringing materials—launching music services without any form of licensing, and have demonstrated continued resolve to engage in conduct basedupon misappropriation. We urge the US Government to use all of the tools at itsdisposal to ensure that these services are not permitted to undermine thedevelopment of potential legitimate online markets.
We want to take a moment to reflect on the fact that thanks in large partto the efforts of the US Government in highlighting illicit practices, someof the notorious markets that we identified in last year’s submission nolonger feature in this filing. In particular, BTJunkie, Demonoid,Megaupload, Spain’s Vooxi and the Allofmp3.com Clones in Russia and
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Ukraine. The action against Megaupload was particularly important increating an awareness amongst the operators of so-called “cyberlockers” that they were vulnerable when they maintained services that effectivelyserved as distribution hubs for infringing materials rather than as cloudstorage, and led to a series of positive developments in that particularsector. Action by the Government of Ukraine against notorious actorDemonoid was also a breakthrough, and hopefully signals broader actionin this country that is home to far too much open and notorious theft. Andwhile the Russian andUkrainian Governments have failed to take anyaction against the various illegal pay-per-download sites operating in theirterritories, or against the rogue societies that theoretically issue licenseswhich they have no authority to grant, cooperation with paymentprocessors has effectively marginalized their reach. Of course, the factthat they persist at all is unacceptable.RIAA members are excited about the potential of the internet and othercommunication technologies to provide an efficient means of distributionto music lovers globally. Record companies and their licensed deliverypartners continue to innovate and expand.At the start of 2011 thebiggest digital music services were present in 23 markets. Now they areoperating in 58 markets. As one example, iTunes opened for business in28 new markets in 2011, including all members of the EU and 16countries in Latin America. And it’s not limited to iTunes—companies likeDeezer, Spotify, Music Unlimited, rara and countless others have greatlyexpanded their presence and created an explosion in legitimate ways toaccess music. And the market is expanding—we estimate that 3.6 billiondownloads were purchased globally in 2011, an increase of 17 percent,and there are some markets, including the US, in which more than half of our revenues derive from digital channels. In total, globally there arenearly 2,000 licensed digital music services offering consumers legalaccess to 20 million music recordings. The music industry is also workingon new industry-wide databases and royalty distribution systems to makeroyalty payment functions more efficient; and on licensing reform toupdate the statutory mechanism for the mechanical licensing system.But no matter how we innovate, we are operating in the shadow of aproblem that dwarfs the legitimate sector. According to a recent Nielsenreport, more than one in four internet users (28%) access unlicensedservices on a monthly basis, undermining investment in innovativedistribution services as well as the creation and distribution of originalmusic. This infringement undercuts legitimate services, harms investors incontent production,and cheats law-abiding consumers. Despite themarketplace efforts made by the creative industries to meet andanticipate consumer demand for digital services, and the vigorous effortsof the creative industries and the U.S. government to take legal actionagainst copyright theft, many avenues remain that enable profiteeringfrom infringement. As long as these avenues are open, America’s
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economy and culture will be harmed. These avenues will not be closedwithout the commitment and cooperation of all responsible players in theonline ecosystem. If all of the relevant players combine their efforts tocombat the scourge of online infringement, we are confident that thelegitimate marketplace for cultural products will thrive. Consumersincreasingly have accessto exciting and innovative new methods of enjoying recorded music. But if anything less than full cooperationremains the norm, our country risks a steady decline in investment in thecultural products for which it is celebrated throughout the world, andirreparable harm to the livelihoods of millions of Americans who work toproduce, perfect, and disseminate these creative works.We hope that the information provided herein will be helpful inilluminating the practices of some of the worst actors in global markets,and that by addressing these markets, we can take a big step towardscreating greater accountability that will expand opportunities forlegitimate commerce. Quite simply, there is no place for open andnotorious theft in a civilized world, regardless of how that theft isaccomplished. Addressing the conduct of these notorious markets forpiracy will go a long way towards promoting the rule of law, fuelingcreativity and innovation, and maintaining US economic competitiveness.Respectfully submitted,Neil TurkewitzExecutive Vice President, InternationalRecording Industry Association of America
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Asher Angel added this note
if the RIAA wasn't so guilty of shady business practices to begin with I would probably agree, but from screwing over artists by paying 1 dollar at most on a 17$ cd, to purposely using cd plastic that is not only easily scratch-able and susceptible to cd rot, to using grandfathered contract rules that amount to legalized slavery, it's hard to care. **** the riaa
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