20 October 2009, WASHINGTON D.C. - After the subprime mortgage crisis following the bursting of the housing bubble, credit crunch and the consequent banking crisis which has resulted in economic slowdown all over the world, a fresh crisis has hit the world - illegal downloading crisis. Billions of songs worth trillions of dollars have been downloaded illegally by music-lovers all over the world over the years using P2P or torrent programs and file-sharing networks resulting in unrecoverable debts and bankruptcy of major recording companies
How it began?
It began in June 2009 when a Minnesota woman, Jammie Thomas-Rasset was found guilty of violating music copyrights and ordered to pay $1.92 million or $80,000 per illegally downloaded song to the recording companies by a federal jury in United States.
After the determination of the value of a single illegally downloaded by the jury, most of the recording companies changed their accounting practices in order to account for billions of songs illegally downloaded songs on computers all over the world.
In August 2009, the Recording Industry Association of America (RIAA) pegged the total value of all illegally downloaded music at a ming-boggling amount of over $3000 trillion, nearly 300 times the total value of US debt. This huge figure was based on a report released by IFPI that more than 40 billion songs were illegally downloaded in 2008, 95% of all music downloads.
While the actual monetary value of illegal songs downloaded last year was probably less than $100 billion, RIAA decided to value the illegally downloaded music not by its monetary value as determined by prices of legal downloads and CD's, but as per the jury's estimation of $80000 per song, which obviously included penalty for downloading the songs illegally.
Estimating that over the last 15 years of music piracy, over 500 billion songs must have been downloaded illegally, RIAA initially arrived at an absurd valuation of over $40000 trillion for all illegally downloaded music since the advent of Internet, but later decided to peg down the value to a more reasonable $3000 trillion when some economists pointed out to them that the amount of $40000 trillion was nearly 10 times more than the value of the entire planet.
Overriding objections that the valuation of illegally downloaded songs as determined by the jury was ridiculous and grossly unrealistic, the four major recording companies of the world Warner Music, Universal Music, EMI & Sony Music along with all their subsidiaries all over the world decided to change their accounting policies to account for the losses suffered by the recording industry as per the newly estimate valuation of pirated music.
Ignoring objections raised by many that it was highly unlikely that most illegal downloads would have been converted into sales, it was decided by RIAA that the cumulative amount of $3000 trillion owed by consumers of illegally downloaded music to the recording industry would be shown as debt in their balance sheets (as per agreed ratio based on average annual turnover) and written off as loss if the recording industry was not reimbursed with the amount.
Last moth, all the four major recording industries along with their subsidiaries filed for bankruptcy after writing off their unrecoverable debts as losses. Soon after they demanded bailout from US government claiming that they deserved to be bailed out by taxpayers money since their losses were a result of criminal acts of billions of tax-payers all over the world.
Yesterday, U.S. Treasury Secretary TImothy Geithner said that his government was negotiating with Congress for a possible $ 15 trillion bailout which is just a small fraction of the total bailout demanded by the recording industry. According to reliable sources, Geithner told the recording industry that since US has strict anti-piracy laws, it accounted for only a minor percentage of world's share of illegal downloaded music.
Blaming China and India for lax anti-piracy laws resulting in billions of songs being illegally downloaded from these two countries, Geithner has reportedly told the recording industry that it wouldn't be fair to punish US taxpayers for the sins of China and India. It is also reliably learnt that Geithner assured executives from the recording industry that President Obama will unveil a new plan to tackle the crisis arising from huge, unrecoverable debts accrued by the music industry.
Will US cancel its foreign debt?
There are fears expressed in many quarters that U.S will take this opportunity to cancel its international debt. According to some inside sources, U.S. President Obama will soon announce to the world a new plan under which its debt to other countries will be written off against the value of songs illegally downloaded from these countries. It this happens, it will create a run on US dollar and plunge the world into yet another unmanageable crisis of unfathomable proportions.