The End of Two File-Sharing Services: LimeWire and Choruss October 27, 2010Posted by Bill Rosenblatt in Law, Music, Services, Uncategorized, United States.
Yesterday a federal judge issued an injunction against the file-sharing network LimeWire, causing it to stop distributing and supporting its software. Meanwhile, the Choruss initiative to implement “flat tax” file-sharing on college campuses appears to have died, despite the effort that Warner Music Group and longtime flat-tax ideologue Jim Griffin put into it.
Judge Kimba Wood’s injunction against LimeWire, which follows her summary judgment against the company back in May, is a milestone in the company’s four-year legal battle with the music industry, and by all accounts, it’s the end of the war. It’s also the first time that the Supreme Court’s 2005 Grokster decision, which created a new category of liability for “inducing copyright infringement,” has manifested itself in a major court action.
LimeWire CEO Mark Gorton claims that he intends to figure out a way to turn LimeWire into a legal paid service. Good luck with that strategy, Mark; it worked so well for Pirate Bay, iMesh, and Kazaa, just to name three.
Gorton’s attempts at emulating Michael Robertson in the music-industry-nose-thumbing business have failed; neither his blatantly disingenuous legal strategy nor his PR charm offensive have worked. And whereas Robertson made tens of millions selling his original MP3.com to Universal Music Group, Gorton may find himself personally liable for that much in fines.
The failure of Choruss is a different story, but there are common elements to both. Choruss was an attempt by Warner Music Group CEO Edgar Bronfman to experiment with a music licensing model that the copyleft has been advocating for years: a flat monthly fee per user in return for unlimited rights to use content on a network. Bronfman had hired Jim Griffin, a respected digital music pioneer as well as a vociferous advocate of what I call the flat tax approach, to lead the effort.
Griffin quickly found that the industry was not going to adopt a US-wide flat tax model voluntarily; it would require getting Congress to enact a statutory license. That wasn’t going to happen in any reasonable timeframe (if ever), so he turned his attention to college campuses.
College campuses had several advantages in terms of openness to the flat tax model: legal, technical, and economic. The legal advantage was that college administrations could have been held liable for the copyright infringements of their students — which are typically massive — so they had incentive to adopt a legal music service of some sort. The technical advantage was that colleges control their campus networks and are capable of filtering them (at least to some extent) so that file-sharing can be done freely inside the firewall but not through it to the outside world.
The economic advantage was that college administrations could easily charge students a monthly fee for use of content on the campus network. Such a fee could be added to existing student activity or IT fees without too many people noticing or caring, especially alongside the five-figure tuitions many colleges charge. Subscription services like Napster had been offering this arrangement to colleges. But unfettered file-sharing with access to a large, DRM-free music library would be better for users, all else (such as price and music selection) being equal.
In other words, Choruss was offering a value proposition to colleges that was actually superior. Unfortunately, Choruss failed because it couldn’t get the licenses to music from at least one of the major music companies and several publishers. (See my article from earlier this week for a possible reason why.)
Choruss had intended to partner with a file-sharing service called Audiogalaxy, which would have provided the infrastructure and user interface. Here’s where the commonality with LimeWire comes in. Audiogalaxy was a file-sharing service that operated during the original Napster era. Like LimeWire, Audiogalaxy used patently ineffectual technology to block sharing of copyrighted works, and like LimeWire, it was shut down in music industry litigation. (Yet in some ways, Audiogalaxy was ahead of its time: it was the first file-sharing service to incorporate what we now call “social” features in its user interface.)
Now that Choruss has failed, Audiogalaxy is relaunching as a service that lets users sync their own music files across their devices and stream it from a server — in other words, it now looks a lot like other current services such as Catch Media and DoubleTwist. In a post last week, Digital Music News’s Paul Resnikoff noted — as I did for Catch Media — that most of the files that would be “synced” with such a tool are most likely not legally obtained. In calling this “ironic,” given Audiogalaxy’s history and Jim Griffin’s intentions with Choruss, Resnikoff was right on the mark.