Was Malibu Media’s settlement extortion scheme profitable?

Lipscomb claimed that the Malibu Media, LLC cases were not profitable.

In my last article, I mentioned that “On April 18th, 2016, Keith Lipscomb told all of his local counsel that he is no longer representing Malibu Media, LLC (citing a lack of profitability).”

NOTE: BEFORE READING THIS ARTICLE: If you have not already done so, and you are implicated as a John Doe in a Malibu Media, LLC lawsuit, read these first:
1) “Everything You Need To Know in One Page About Your Malibu Media, LLC (X-Art) Lawsuit [FAQ]”
2) “In-Depth Malibu Media.  Their Lawsuits, Their Strategies, and Their Settlements”

FOR IMMEDIATE CONTACT AN ATTORNEY: To set up a free consultation to speak to an attorney about your Malibu Media, LLC lawsuit, click here.  Lastly, please feel free to e-mail me at info [at] cashmanlawfirm.com, or call 713-364-3476 to speak to me now about your case (I do prefer you read the articles first), or to get your questions answered.

Was Lipscomb right? Were the Malibu Media LLC v. Doe lawsuits no longer profitable?:

I thought a lot about this one, and I will answer it using fuzzy numbers (rough estimates).

Malibu Media, LLC filed 6,800+ lawsuits in federal courts.  Since the start of their lawsuit, the cost of filing a lawsuit increased to $400.

$400 filing fee/case x 6,800 cases = $2.7 Million in filing fees (likely $2.4 mil based on the fee change because the filing fee was not always $400).

6,800 cases, estimate 10% pay a settlement fee (one out of every ten John Doe Defendants), and assume an average settlement amount of $10,000.  [6,800 cases x .1 settlement rate = 680 settlements x $10K/settlement = $6.8 Million in settlement funds received].

But what if the average settlement was $8,000 but they didn’t tell you about that, and only 5% actually paid the settlement?  Then the numbers would look like this: [6,800 cases x .05 settlement rate = 340 settlements x $8K/settlement = only $2.72 Million in settlement funds received].

Now the local attorneys who “extract” the settlement likely get a 30% piece of the settlement.  So let’s assume 30% in commissions goes to the local counsel. [$2.72 Million in settlements received x .7 [that’s 70% after the 30% attorney cut] = $1.9 Million Left for Lipscomb].

Subtract the $1.9 Million Left for Lipscomb from the $2.7 Million in filing fees paid, and Lipscomb has a loss.  Likely a businessman like Lipscomb would see this coming and would not allow 6,800 cases to be filed if they were not significantly more profitable.  Thus, I think my original numbers were more accurate (if not, Lipscomb was not a smart businessman and is about to file for bankruptcy).

Going back to the original numbers, even if you take the original assumptions of a 10% settlement rate, and an average settlement of $10K (=$6.8 Million), minus the local counsel’s 30% cut, that leaves a net profit of $4.76 Million Left for Lipscomb.  Minus the $2.7 Million in filing fees from the $4.76 Million Left for Lipscomb, and that leaves a $2 Million Net Profit, but Lipscomb only paid Malibu Media $100,000 (which would be a 5% commission rate to Malibu Media, LLC).

Thus, based on what the real numbers actually were, I do see how Lipscomb may be able to claim that the copyright trolling campaign was not profitable for him.  My best guess is that the truth of what the numbers really were are somewhere in between my estimations, however, the only way we will be able to learn the truth is 1) if it comes out in discovery in the Malibu v. Lipscomb lawsuit, or 2) if the feds analyze their books.

What else can you tell me about the Malibu Media cases?

[2017 UPDATE] The best way to learn about Malibu Media, LLC is to read what happened to them as it happened.  The list of stories below (in the order I listed them) tell the Malibu Media story in a way that you will understand them.

• “Malibu Media, LLC almost went out of business in April, 2016,” on 12/21/2016
• “Many Malibu Media, LLC lawyers defected; some lawyers remained,” on 3/13/2017
• “Which Lipscomb attorneys stayed with Malibu Media, LLC?” on 3/13/2017
• “Malibu Media, LLC stops filing copyrights, but they continue filming porn videos… why?,” on 5/10/2017
• “Malibu Media, LLC cases are currently facing hard scrutiny in California.” on 12/23/2016
• “Judge forces Malibu Media to reveal the accuracy of their geolocation technology,” on 5/10/2017
• “Malibu targets the wealthy in their geolocation tracking.” on 6/4/2013
• “Why I think Malibu Media is ‘faking’ the ‘publication’ requirement to prove copyright infringement,” on 2/9/2016
• “Confirmed: Malibu Media invests $400 filing fees @$20K/month” on 3/13/2017
•    – “(and how I initially figured out they were on a $20K/mo filing fee budget),” on 12/23/2016
• “What are the X-Art adult movies Malibu Media owns? (NSFW),” on 5/5/2017
• “How the Cashman Law Firm, PLLC tracks Malibu’s movements,” on 5/4/2017
• “How certain defense attorneys are trying to profit from Malibu’s cases (unethically), ” on 3/29/2017
• [THIS ARTICLE] “Is Malibu Media’s Settlement Extortion Scheme Profitable?,” on 12/22/2016
• “The ‘Bellwether’ Trial – The ONLY Malibu Media, LLC case to EVER go to trial,” on 6/12/2013
• “When Malibu First Started Suing ONE John Doe Defendant per Case,” on 3/7/2013
• “My First Opinion of the Malibu Media, LLC cases,” on 3/6/2012

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FOR MORE INFORMATION ABOUT MALIBU MEDIA, LLC:Again, if you have been implicated as a John Doe defendant in a Malibu Media, LLC lawsuit, there are TWO (2) main articles you should read immediately:

1) “Everything You Need To Know in One Page About Your Malibu Media, LLC (X-Art) Lawsuit [FAQ],” and then
2) “In-Depth Malibu Media.  Their Lawsuits, Their Strategies, and Their Settlements.”

FOR IMMEDIATE CONTACT WITH AN ATTORNEY: To set up a free consultation to speak to an attorney about your Malibu Media, LLC lawsuit, click here.  Lastly, please feel free to e-mail me at info[at] cashmanlawfirm.com, or call 713-364-3476 to speak to me now about your case (I do prefer you read the articles first), or to get your questions answered.

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