Last month, a student at the University of Arizona was sentenced to three years probation and a $5,400 fine for illegally distributing music and movies on the Internet. A spokesman for the recording industry claims investigators found more than $50 million worth of pirated material on his computer. That seems like an awful lot of money. How much is stolen music worth?
A lot more than you might think. Since a song costs only 99 cents on iTunes, and movies go for less than $20 on Amazon.com, it seems impossible to amass $50 million worth of entertainment on one computer. (Indeed, even if you could find 50.5 million songs or 2.5 million movies to download, they would take up hundreds of terabytes of disk space, which would itself cost a fortune.) But in some court cases, the value of a pirated file is based not on its retail price, but on the damages done to the company that legally produces and sells it.
There are a number of ways to calculate these damages. Some federal prosecutors have assumed that about 10 people will download anything on a file-sharing network, so they multiply the retail value of shared song files by 10. But it can get much worse: Lawsuits brought by the Recording Industry Association of America and the Motion Picture Association of America have claimed statutory damages as set out in the United States Copyright Law from 1976. According to the section on "Remedies for infringement," each work carries a value of between $750 and $30,000, as determined by a judge. (These are the current figures; the Digital Theft Deterrence Act boosted statutory damages by about half in 1999.) While a judge must also determine what qualifies as a "work," RIAA lawsuits typically request statutory damages for each song—and not each album.
When the digital pirate can be shown to have "willfully" violated intellectual property rights (knowing it was an infringement), statutory damages go as high as $150,000 per song, movie, or album. That means the $50 million hard disk might have contained just 30 or 40 pirated albums.
As it happens, the Arizona student was prosecuted according to state laws in a criminal court—and it was the number, not the value, of his computer files that helped determine his final sentence. (He was convicted of a felony because he engaged in the "unlawful copying" of between 100 and 1,000 songs or between 10 and 100 movies.) For those prosecuted under federal copyright law, the punishment for criminal infringement may depend on the value of the copied work. The thresholds are low, however—all people who accumulate more than $2,500 worth of material face the same maximum penalties.
Explainer thanks Brendon Fox for asking the question, and Krystal Garza of the Maricopa County Attorney's Office, Thomas Lewry of Brooks Kushman, and Jonathan Zittrain of Harvard Law School for helping answer it.