One of the biggest changes that has occurred in the recent evolution of the music industry is the predominately electronic distribution channels in which users receive their music. Unfortunately, this makes it easier for piracy of copyright protected works to occur. With file sharing sites such as LimeWire facilitating the distribution without legal sale of music it has been said that singers, composers, songwriters and record labels have lost billions of dollars in revenue.
The Grokster case paved the way for the entertainment industry to go after file sharing sites in efforts to not only recover lost revenue but also to ultimately shut down operations promoting what is now deemed as illegal file sharing. In the Grokster case, the United States Supreme Court ruled that business with the intent to of encouraging copyright infringement should be held liable. Grokster was eventually shut down. Currently, the Grokster’s site hails a message to all visitors that 1) sharing copyright protected material is illegal and 2) “There are legal services for downloading music and movies. This service is not one of them.”
Since the ruling in the Grokster case, numerous entertainment companies and advocacy groups have brought filing sharing sites to the courts. According to the a press release by the National Music Publishers Association, eight of its filed suit against LimeWire seeking damages for knowingly facilitating copyright infringement through LimeWire’s web application. The publishing companies originally sought $150,000 for every song that was illegally shared through LimeWire. The case eventually settled and the terms were undisclosed.
In October 2010, the injunction filed by the Recording Industry Association of America (RIAA) against LimeWire was approved in federal court. Judge Kimba Wood found LimeWire’s creator, Mark Gordon, completely liable for the application’s user’s copyright infringement. This was a huge win for the entertainment industry as one of the major players of illegal file sharing would soon shut down operations. The RIAA argues the huge drop in revenues is directly linked to file sharing sites like LimeWire. Estimates from the RIAA indicate a drop from $14.5 billion 1999 to $7.7 billion in 2009.
