eDonkey Pays the Recording Industry $30M

ColinPL writes, "MetaMachine Inc., the firm behind online file-sharing software eDonkey, has agreed to pay $30 million to avoid potential copyright infringement lawsuits from the recording industry. The company also agreed to take measures to prevent file sharing by people using previously downloaded versions of the eDonkey software. The eDonkey application now displays the message, 'The eDonkey2000 Network is no longer available. Please see eDonkey.com for more details.' After that message is displayed the uninstaller is launched automatically." If you visit edonkey.com, it logs your IP address. How much will the demise of eDonkey matter, given that most who access that P2P network do so using the open-source eMule?

Comments

Morte d' Robertson

[Stanistani]

Slowly the vise closes in on all P2P... yet filesharing grows year by year...
The media congloms win lots of battles while losing the war.

time to cash out

[User 956]

MetaMachine Inc., the firm behind online file-sharing software eDonkey, has agreed to pay $30 million to avoid potential copyright infringement lawsuits from the recording industry.

Sounds like they've made their fortune, and have made the decision to pay the piper and cash out. I have no doubt that MetaMachine's profits were far in excess of $30 million.

Re:Good thing

[pla]

Good thing they paid up. Uncle RIAA thought it would be a shame if "something should happen to their nice office building".

For some reason you got modded down, but really, I have to wonder about the legality of this...

"eDonkey, has agreed to pay $30 million to avoid potential copyright infringement lawsuits from the recording industry". Not damages awarded by a court, not even to settle a pending suit - To avoid a potential lawsuit!

If that doesn't meet the textbook definition of extortion, I don't know what would.

I have a question....

[dcavanaugh]

Where did eDonkey GET $30M to pay RIAA? Or is this a hyped-up announcement of a "settlement" that is never really collected?

Re:I have a question....

[shark72]

"Where did eDonkey GET $30M to pay RIAA? Or is this a hyped-up announcement of a "settlement" that is never really collected?"

From advertising.

Many people mistakenly see the big players in the P2P game as "white knights" because they make it so easy to get so much music for free. But, make no mistake: they are not in it because "information wants to be free." They are not in it to "stick it to the man." They do it to make money. They are in the business of helping people pirate music, and business is goooood.

It's funny that many of us justify our P2P usage by imagining some record executive in a $3,000 suit. The reality is usually different. The only record company owner I've met ran a ten-person label and paid himself $25K a year. Sam and Jed, the folks who brought you eDonkey so countless teens can "stick it to the man," likely made about $25K every week. The executives at Sharman are also multi-millionaires.

So why are Sam and Jed rich, while my friend the indie record label owner could only afford to pay himself $25K a year? Because my friend paid artists, paid employees, and paid for the production of the music.

Slashdot is all for copyright protection, right?

[isaacklinger]

Okay, they've shut down a firm that was directly hosting and indirectly responsible for massive copytight infringement. Seeing that unauthorised distribution of copyrighted material is illegal in most, if not all, the western world, I think it's good to see the law being enforced. Sadly it's being enforced by corporate lawyers and not governments. Untill now, copyright infringers have been prosecuted, and had lost, to the corporate lawyers. Even so, copyright infringement is steadily on the rise.

What do you think they'll do next, seeing that going after the clients and servers can only yield so much? Perhaps ask the government to join in on the "War on Piracy", and target the infrastructure? Personally I don't see my government being very interested in media piracy, but the US government sure is.

Where does all this money come from?

[Nom du Keyboard]

Where does all this money come from? Weren't they distributing a free program to allow the free swapping of digital files? Where does the $30M show up from?

Re:Where does all this money come from?

[shark72]

"Where does all this money come from? Weren't they distributing a free program to allow the free swapping of digital files? Where does the $30M show up from?"

Giving something away for free, which helps people get free music, does not necessarily mean that you are a philanthropist. Sam and Jed were very much in it for the money. And they did very well. They are millionaires. So are the principals of Sharman Networks, the folks behind Kazaa.

It's ironic, because many people justify their piracy because they believe that artists and/or record companies are "greedy." Sam and Jed likely did better, financially speaking, than 90% of the record labels and 99% of recording artists.

Gnapster vs. OpenNap all over again.

[pjbass]

When the recording industry forced the Gnapster community offline, they all patted themselves on the back for a job well done. But the opennap network was just spinning up, and was bigger and better than the original. Fast forward a few years ahead, and all these attacks on PnP filesharing has generated beautiful, useful protocols like BitTorrent.

Let them keep attacking, because we will always have someone out there out-innovating the money-hungry RIAA and MPAA.

Heh I had no idea...

[Fnkmaster]

My guess is that they agreed to a settlement that the RIAA knew the company didn't have the funds to pay. This will force them into a Chapter 7 liquidation under which the RIAA recoups a fraction of the 30 mil, and lines up with other creditors based on their priority in the capital structure of the firm.

The goal of this is probably to prevent the equity shareholders from getting any return on their dime.

I doubt that eDonkey had greater than 30 mil in cash on hand, and I doubt they even had that in total assets. This is based on my knowledge of the workings of other similar P2P developers and of small tech firms in general.

If I am wrong and they have sold hundreds of millions of dollars in advertising and were sitting on a huge nest egg, I'd be very surprised.

Re:recording industry?

[Evil Shabazz]

It's a broad, scattergun approach, and I can't help but think that one could do a far better job with a large database and some social networking software.


Are you suggesting GoogleMusic? :P

Re:Good thing

[BGraves]

The vast majority of disputes are solved this way, which is a good thing. It reduces the costs created by taking a case to court, and frees up the courts to deal with other, more important disputes.

Here's my thoughts on stopping that....

[Khyber]

What should be done is have the ISPs (at least those in the Telephone industry, like Bellsouth, etc, that got our tax money to upgrade our infrastructure,) taken to court and sued for our tax dollars back. We can prove we gave them 200 billion dollars (I think?) to upgrade our entire nation's telecom infrastructure, with them promising better everything, including faster internet speeds. We should just gather all of the evidence we have, find a good lawyer, get a bunch of Slashdot users (most of them more than likely being more knowledgable than the ISPs,) for expert witnesses, and raise a full-out legal war with them until they buckle from the bad press and/or lose the lawsuit and have to pay all that money back to the American people. At 200 billion bucks and approx 400 million people, they'd be paying $500 to every person in the US. That's a good two or three month's worth of phone and internet. I'd bet they'd not enjoy that prospect.

Re:recording industry?

[neax]

I found this great explanation of change. Which I think applies nicely to the recording industry and where they currently stand.

"There are two forces which cause different effects. The first one is ATTRACTION. If there is a position which is more attractive than the original one, the thing starts to move towards that new position. Again, this could be physical or mental. Thoughts could be moved to another direction by an attractive idea. Water moves down from the mountain, because of the gravitational attraction. In my workshops with students I often use the vacuum cleaner as example of the attractive force. The great attractivity - as I may use this word- of attraction is, that the process of repositioning is a process under control. One could predict the effects, the new position is known. These effects could be described as 'concentration'. In other contributions, I have also used 'pulling' as a synonym for attraction. In human behaviour, one could also speak of 'stimulating'.

The opposite of attractional force is REJECTION - pushing. Rejection cause generally uncontrolled effects. It means that the original place lost its attractivity, but there is no alternative. Something has to move, but does not know where to go; it could be in all directions."

"...But think also of the effects of punishment in human behaviour. This issue has been discussed on this list. Punishment is comparable with 'pushing'; the very position is made as unattractive as possible. The resulting effects of human behaviour are very difficult to predict. A lot of governments - creating new rules and laws to change behaviour by means of punishment, seem to neglect or underestimate the possible effects of their actions. "

[source: http://www.learning-org.com/00.05/0149.html]

The RIAA is Rejecting the p2p phenomenon, and that is just going to cause more problems. Ultimately file sharing is here to stay. It is not going away. So they need to find a constructive way to work with it so that everyone benefits. In my opinion it is just the larger, more popular artists that loose (only money, they rep increases) as their sales can decrease due to people sharing their music instead of buying it. Smaller, unknown artists however, benefit in a big way, because it is cheap easy promotion, and ultimately they end up getting known. which leads to sales and great crowds at gigs.