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Kazaa Fights Back

Posted by Hemos on from the fight-the-good-fight dept.

Cracula writes "CNET is reporting that tonight Kazaa filed a lawsuit against the major record labels and Hollywood studios, asserting that they are attempting to stifle a legitimate and potentially profit-cutting business model. Sharman Networks (owner of Kazaa) says that their model is fundmentally different than Napster because their major goal is to make money off their companion program Altnet that delivers authorized, paid content. While this may sound like a shot in the dark, last year a federal judge actually ruled that the record labels' current efforts to provide online access to their music may run afoul of anti-trust laws. Kazaa may actually have a hope."

1 of 378 comments (clear)

  1. Re:Money question by wilgamesh · · Score: 5, Informative

    Yeah, I wouldn't have believed this myself, but according to a recent wired article on Kazaa, they are making money from ad revenue. I quote the article here.

    "In the last six months alone, PC users have downloaded more than 90 million copies. Kazaa has 60 million users around the world and 22 million in the US - an irresistible audience to marketers. Last year, Sharman raked in millions from US advertisers like Netflix and DirecTV, without spending a penny on content. The chase could have gone on forever."
    -Wired
    http://www.wired.com/wired/archive/11.02/kazaa.htm l?pg=1&topic=&topic_set=

    The article also mentions their side-business model of teaming up with Altnet, by providing access to Altnet products (paid downloads, supposedly). They, I believe, will use the side-business model to argue that the existence of the company depends on a valid, legal method of generating revenue.

    Of course, according to the article only 600 files are offered from Altnet. I think this makes Sharman's countersuit quite flimsy- the bulk of their revenue is derived from ads that sit piggy-back on top illegal activity. I don't think they'll be able to show convincingly that they actually have a viable business model with respect to Altnet.

    Then again, if Altnet and Sharman can spit out a convincingly story of RIAA MPAA etc etc conspiracy to monopolize and deprive, the judges might listen.