LimeWire shut down by federal court

[Al-khiyal]

LimeWire shut down by federal court

October 27, 2010 -- LimeWire, one of the world's most popular peer-to-peer filesharing websites, has been shut down after a four-year legal battle with the U.S. music industry. A federal court in New York issued a "permanent injunction" against LimeWire late on Tuesday, ruling that the platform intentionally caused a "massive scale of infringement" by permitting the sharing of thousands of copyrighted works by its 50 million monthly users. Founded in 2000 by Mark Gorton, a former Wall Street trader, LimeWire is now restricted from allowing the searching and sharing of copyrighted material. The website will continue "working with the music industry to move forward", a LimeWire spokeswoman confirmed.

U.S. judge Kimba Wood ruled that record companies "have suffered – and will continue to suffer – irreparable harm from LimeWire's inducement of widespread infringement of their works", adding that the potential damages were "staggering". The court also ruled that LimeWire should "use all reasonable technological means to immediately cease and desist" copyright infringements still taking place through applications already downloaded. Yesterday's court order comes after a four-year legal battle between LimeWire and the Recording Industry Association of America, the representative body for many of the world's largest record labels. In May, Wood found LimeWire liable for widespread copyright infringement. The level of damages faced by the site's New York-based parent company, Lime Group, will be decided in January 2011.

The RIAA said LimeWire has cost the music industry hundreds of millions of dollars in revenue. According RIAA figures, US recorded music sales fell to $7.7 billion in 2009 from $14.5 billion in 1999. The rise to prominence of peer-to-peer filesharing networks is singled out as a primary factor for this decline by the RIAA. The site's popularity is reflected in a survey by NDP Group, which found that LimeWire was used by 58% of people who have downloaded music from a peer-to-peer network in the year from May 2009. Following Tuesday's injunction, the RIAA said: "For the better part of the last decade, LimeWire and Gorton have violated the law. The court has now signed an injunction that will start to unwind the massive piracy machine that LimeWire and Gorton used to enrich themselves immensely. In January, the court will conduct a trial to determine the appropriate level of damages necessary to compensate the record companies for the billions and billions of illegal downloads that occurred through the LimeWire system."

Earlier this year, LimeWire planned to release a service called Spoon, which would allow users to legally purchase copyrighted tracks. The deal fell through, however, when record labels were told that the site would need at least a year to migrate illicit filesharers to the new service. Napster, which claimed more than 100 million users at the height of its popularity at the beginning of the decade, collapsed in 2002 under the strain of a number of legal challenges. The company reinvented itself as a legal download service in 2004, later launching what it claimed was "the world's largest and most comprehensive MP3 store", before unveiling a "freemium" model – similar to that of Spotify – last year.

[Al-khiyal]

LimeWire shutdown just a temporary inconvenience for filesharers

October 27, 2010 -- LimeWire's launch predates the Apple iPod by 19 months and the iTunes store by 23 months. Today millions of users accustomed to illegally sharing copyrighted content over the past decade will be temporarily inconvenienced after a permanent injunction against LimeWire's illegal peer-to-peer filesharing operation. The New York federal court ruling is a significant, but not game-changing legal victory for a battered music industry. But LimeWire as we know it is dead. As with the closure of other peer-to-peer networks such as Napster before it, LimeWire must now go legit.

The permanent injunction follows a four-year legal battle brought by music industry heavyweight, the Recording Industry Association of America. The level of damages faced by the site will be revealed in January – the RIAA says LimeWire has single-handedly cost the music industry hundreds of millions of dollars. Ripples from the ruling will reach the internet's innumerable other peer-to-peer networks. But history says it will do no more. The internet is awash with people sharing things, legally and illegally. "It's not about the technology, it's a paradigm shift," says Mark Mulligan, an analyst specialising in music at Forrester Research. And the notion that you can eradicate illicit filesharing if you eradicate particular networks is a fallacy. "It's so much more than that," Mulligan adds. "The record labels have won this battle, but they've not won the war."

Some have predicted that the LimeWire closure will have an "unprecedented impact" on peer-to-peer filesharing. Hold your horses, look at the history books, says Mulligan. "It's significant to a degree but I wouldn't say it's game-changing or will change the filesharing landscape. There are many instances of filesharing networks [where] once the legislative process has caught up with them they've just tried to make a pass towards legitimacy. Look at Napster and Kazaa – there are numerous examples," he adds. "It has done nothing to dent the scale of filesharing. The reason they fileshare is not because they love the way the technology works, it's because it's easily accessible content which is free. The simple fact is that the vast majority of music fans don't like paying for music – and that's even more pronounced in the filesharing community. Look at Spotify, they're at a peak conversion rate [percentage of paying customers among all users] of 5% at the moment – and it's that high because of their iPhone strategy and portability."

The best case scenario for freemium models of music streaming is a 10% conversion rate, insists Mulligan. "LimeWire even in their wildest dreams couldn't hope to convert that amount of people. Hopefully for LimeWire's sake and for the industry's sake they can convert a small amount of users, that's the best they can hope." The solution, experts predict, is a service free at the point of access and subsidised by a third-party carrier – a mobile operator or an internet service provider, for example. "This is where LimeWire should start to play," Mulligan says. "In the current landscape that's the only way that free can be made to pay."

George Searle, LimeWire chief executive, today put on a brave face. "Our team of technologists and music enthusiasts is creating a completely new music service that puts you back at the centre of your digital music experience," he wrote on the parent company's site. "We'll be sharing more details about our new service and look forward to bringing it to you in the future."