Thursday, June 29, 2006

Swedish Piracy Insurance!

Boing Boing: P2P insurer will pay your fines if RIAA sues: $19/year!

Not that anyone I know would ever pirate music, I still thought it would be interesting to discuss this Boing Boing post. It links to a Swedish language website, which claims to offer "insurance" against any and all RIAA levied fines and court costs for P2P file sharing for the bargain price of 19 bucks a year. You even get a t-shirt if the RIAA sues you (hopefully a t-shirt in Swedish).

Sweet deal for all involved right? If all of the 7-10 million people on the p2p networks at a given moment ante up, that's beaucoup bucks for the entrepreneurial Swedes. Plus, the RIAA simply can't sue everyone who pirates music. Stretching their legal department to it's limits they are only managing a couple thousand suits a year. Paying 19 bucks to some Swedish people beats paying the record industry 3-5000 dollars right?

For the sake of this post, I am going to assume that it is possible to insure people for fines and lawsuits caused by their illegal activities (not entirely sure about that) and that the Swedes in question are noble Swedes, forthright and true, and not a bunch of clever Swedish teenagers out to scam a bunch of stupid American teenagers out of 20 bucks (which is almost unquestionably the case). Let's assume these people really want to set this up as a business model and fully intend to stand behind each duly filed insurance claim for everyone sued by the RIAA who anted up.

I love this idea because it is an interesting way to illustrate the pervasiveness of file sharing and the problems with trying to regulate or stop it from occurring. Insurance only works if you have an enormous number of people paying in and
a relatively low risk of the insured circumstances occurring. If one in every 5 houses burnt down every year, Fire Insurance would not work. Isn't it amazing to realize that p2p piracy, an "illegal" "criminal" act, fits perfectly into the parameters of insurability? Millions upon millions of people do it, and at most only a few thousand of them (far less than 1%) are going to get dinged by the RIAA in a given year.

I do not claim to have all the answers w/r/t the piracy issue, I don't think there should be unchecked piracy of any and all media (I would however, support a MASSIVELY reduced copyright term and a healthy, growing, public domain). If enough people engage in an activity that it makes sense for said people to buy insurance against lawsuits, maybe lawsuits aren't the best way to go about curtailing said activity.

Personally I think nothing is going to change over the next 5-10 years, people will use p2p and torrent networks with increasing regularity, sharing music, films and all other media. The RIAA/MPAA will continue to sue their own customers in what amounts to a futile gesture (and a lucrative little side business: spend 400 dollars in legal fees, collect 5K in fines, gotta love those margins) and sue the pants off of any company stupid enough to try and make money from P2P software under the "inducement" theory of liability codified in the Grokster decision handed down last year. They will also continue to lobby Congress and use their pet senators to try and pass ridiculous, unenforceable, occasionally unconstitutional statutes that make it a felony for anyone to possess or view any media without paying a large corporation for the privilege. One or two of these laws will probably pass, and one or two extremely unlucky people will be sent to jail under them. Token convictions, but try telling them that.

Eventually, those in charge of media companies will accept the realities of the world in which they operate, and try and treat P2P, YouTube and the rest as necessary evils, and maybe some of them will be clever enough to use them to their advantage. I think there's plenty of money to go around for these companies without perverting IP law and trying to turn the internet into a crippled television with a keyboard attached to it. In the meantime though, there's always Swedish Piracy Insurance. If anyone buys in, please let us know in the comments.



At 6/30/2006 10:12 AM, Anonymous Z said...

This is a brilliant idea. Reminds me of the line in Doc Hollywood where Woody Harrelson talks about selling earthquake insurance. "I'll collect the premiums, and if the big one hits declare BK and leave the country."

One thing I must point out as the token finance/markets guy here: If 1/5 houses burnt down every year, fire insurance would still work...but the premiums would become prohibitively expensive. Pricing is all risk based. All the articles recently about Long Islanders not being able to buy flood insurance because of a fear that Hurricane Katrina II will hit one day ties into this idea.


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