In 1999, the recorded music trade was swimming, drowning in cash. CDs had been on an upward trajectory for greater than 15 years, reaching gross sales of two.4 billion globally and one billion models within the U.S. alone in 2000.
Regardless of the huge scale of the CD trade and crops operating flat out around the globe, the promised decline in costs by no means got here. In truth, the trade was caught in a price-fixing scheme that inflated the price of CDs between 1995 and 2000 with a advertising and marketing plan referred to as “minimal marketed pricing.” It’s estimated clients had been overcharged US$500 million and as much as US$5 per album. (The case was settled with a wonderful and a promise to present US$75 million to public and non-profit teams.)
On the similar time, labels moved to remove the extra inexpensive CD single. “Need simply that one track? Too unhealthy! Purchase the entire album for 20 bucks!” And given the perceived rise in one-hit wonders by the top of the ’90s, music followers had been in a surly temper.
The dam started to burst on June 1, 1999, when v1.0 of Napster was launched into the wild. Inside 18 months, the service had greater than 80 million customers sharing MP3s they didn’t pay for. Different unlawful file-sharing applications popped up. Audio-Galaxy, Kazaa, BearShare, Grokster and dozens extra. Different music followers turned to legal-but-often-used-illegally software program like BitTorrent and uTorrent, applications that powered networks like The Pirate Bay.
Because the ’00s continued, CD gross sales had been in freefall, costing the trade and artists untold billions. Individuals had been laid off and artists had been dropped from rosters. Unable to get a deal with on new digital realities, the trade was in full panic mode. The one actual instrument it had at its disposal was submitting lawsuits, with the Recording Trade Affiliation of America (RIAA) main the way in which.
The RIAA had been profitable in shutting down Napster. The group got here after the nation laborious, forcing it to stop operations in 2001. By June 2002, Napster had filed for chapter. The Grokster and Morpheus case lasted 4 years earlier than the U.S. Supreme Courtroom dominated that file-sharing providers could possibly be held responsible for copyright infringement. A swimsuit in opposition to BearShare was settled out of court docket for US$30 million in 2006. Kazaa was additionally achieved by 2006, settling for US$100 million.
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However this was small change in contrast with what the RIAA demanded from LimeWire.
A free model of this system was launched by Mark Gorton in 2000, adopted later by a professional model that value US$35 a yr. It was so common that by 2007, it was estimated to be put in on one-third of all private computer systems on the planet, regardless of some variations being very buggy and opening anybody’s pc to malware and theft of non-music paperwork.
Gorton and LimeWire started to get nervous about their enterprise and authorized prospects after Grokster’s loss in court docket, however determined to push forward. And sure, the legal professionals quickly got here after LimeWire. The losses in court docket started to pile up; essentially the most vital was a lawsuit filed by Arista Data in Could 2010.
A choose within the Southern District of New York dominated that LimeWire and Gorton had been on the hook for copyright infringement, unfair competitors and inducing different folks/firms to commit copyright infringement. This dragged on for months till Oct. 26, 2010, when LimeWire was ordered to disable all options that allowed folks to illegally share music. Gorton and LimeWire had been defiant, saying they’d proceed working however cease distributing the offending software program.
That, nonetheless, wasn’t adequate for the RIAA. In early 2011, it adopted up on the October ruling by claiming statutory damages. Choose Kimbra Wooden, who was answerable for the case, wrote this in a 14-page ruling: “Plaintiffs are suggesting an award that’s more cash than all the music recording trade has made since Edison’s invention of the phonograph in 1877…. If Plaintiffs had been capable of pursue a statutory injury concept based mostly on the variety of direct infringers per work, Defendants’ damages may attain into the trillions.”
She was appropriate. The RIAA wished Gorton and LimeWire to pay a mere US$72 trillion. To place that into perspective, that was greater than 3 times the GDP of all the planet on the time and the mixed financial output of all seven billion folks. The overall wealth of Earth was most likely not more than US$60 trillion on the time.
How did anybody give you that determine? Somebody made a back-of-the-envelope calculation that checked out 11,000 songs, estimating the variety of occasions every one in all them had been downloaded illegally after which equating every obtain with the lack of a full-priced sale. On condition that American legislation allowed for US$150,000 per infringement, the numbers received massive very, in a short time.
The RIAA says it by no means particularly requested for US$72 trillion, however the determine did come up as a part of the case.
Anticipating LimeWire to pay that quantity was insane, in fact, so Wooden gave the RIAA a approach ahead. She dominated that the RIAA was entitled to a “single statutory injury award from Defendants per work infringed.” If we take into account the unique 11,000 songs at US$150,000 every, that added as much as US$1.65 billion. That was later amended to five,000 songs and infringement damages of US$750 million. Ultimately, LimeWire was capable of scale back the penalty to a mere US$105 million.
So what of LimeWire right now? The corporate is gone, however its software program lives on. Model 5.5.10 and all earlier variations nonetheless work and might’t be disabled in any approach except the consumer makes an attempt an improve. In the meantime, the LimeWire identify lives as a platform for folks into non-fungible tokens (NFTs). It’s additionally within the synthetic intelligence area and can be utilized to share AI-generated photographs and movies. It’s out of music completely.
In the event you’re having a nasty day, simply do not forget that in 2011, a software program programmer was advised he was on the hook for US$72,000,000,000,000. That might forged a pall over your morning, wouldn’t it?
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