October 7, 2015
Rightscorp, a company that goes after people who illegally download songs, has just signed Sony/ATV Music Publishing as a client. The signing is a coup for the company, which despite having signed a few big clients, has been struggling on the verge of bankruptcy. In addition to Sony/ATV, Rightscorp also counts BMG and Warner Bros. among its clients. The company process is to scan the Internet for illegal downloads, using its proprietary algorithm to gather IP addresses, and then threaten those users with legal action.
Ars Technica reports that the company then collects $20 per song illegally downloaded. Rightscorp, which is publicly traded (as RIHT) keeps 50 percent of the proceeds; the rest goes to the client.
Last year, over three-quarters of the company’s revenue came from BMG, with an additional 13 percent from Warner Bros. The new Sony deal, says Rightscorp is “a monumental agreement” that “not only legitimizes the market they serve as a growing concern, but opens the door for others to follow in Sony’s footsteps.”
The question remains as to whether Rightscorp will remain a going concern long enough to develop a sufficient revenue stream. Ars Technica reports the company has upped its demand, in some cases, to $30 a song. At the same time, its stock traded between 10 cents and 20 cents per share during 2015, dropping as low as 6 cents.
Rightscorp is also beset by legal woes: a lawsuit against Cox, which refused to forward its copyright infringement notices to its users and a class action suit that the company made illegal robocalls to people’s cell phones.