what-happened-to-limewire

What happened to LimeWire?

  • LimeWire was a peer-to-peer file-sharing client based on the Gnutella network protocol allowing users to share music. It was created by entrepreneur Mark Gorton in 2000.
  • LimeWire was initially popular, but the platform became associated with illegal porn, security breaches, and virus-ridden files. Users declined as consumers flocked to torrent networks and sites such as YouTube.
  • LimeWire was sued by the RIAA in 2006 claiming somewhat preposterous damages of around $72 trillion. After a four-year battle, a federal court ordered LimeWire to shut down. The company eventually paid out $105 million to various music producers.

Origin story

LimeWire was a peer-to-peer file-sharing client based on the Gnutella network protocol allowing users to share music.

The platform was founded by entrepreneur, defense contractor, and hedge fund manager Mark Gorton in 2000.

Gorton developed the platform under the direction of Lime Group LLC, which consisted of a small group of developers interested in peer-to-peer technology.

Within twelve months of its release, LimeWire achieved more than three million downloads – something most developers of the time could only dream of achieving.

Growth was further encouraged by less aggressive ad placement within the filesharing interface and the forced closure of competitors such as Napster and Grokster.

During its peak around 2005, LimeWire was installed on approximately 18% of every personal computer in existence.

But less than five years later, the platform was ordered to shut down after a federal court ruling.

Let’s take a look at the demise of LimeWire below.

Usability

While the platform had many helpful features, LimeWire existed at a time when the downloading of music was far from an exact science.

Many users fondly remember waiting hours to download a single song, only to find the title did not match the song downloaded.

Though initially robust, LimeWire became increasingly riddled with viruses.

It was also associated with illegal porn and security breaches, with sensitive data from more than 626,000 credit reports and 150,000 tax returns uploaded to the network.

As usability declined, many users migrated to safer and more reliable torrent networks.

Others subscribed to Netflix or watched their favorite music on YouTube.

Copyright concerns and litigation

In 2006, a group of music companies represented by the Recording Industry Association of America (RIAA) sued Lime Group LLC over copyright infringement.

These companies included Warner Music Group, EMI, and Sony Music, among ten others.

The industry body, which had taken down Napster a few years previous, demanded $150,000 for every song traded on the LimeWire network illegally.

This amounted to around $72 trillion, a figure higher than the total global GDP at the time.

Digital music store

In March 2008, LimeWire unveiled the beta version of its new digital music store. United States users could pay for songs per-track or sign up for a monthly subscription.

The viability of LimeWire’s digital music store was severely handicapped because of the poor relationship the company had with major music producers.

Despite numerous attempts at reconciliation, the relationship would never be repaired. 

The digital store was eventually closed on December 31, 2010, because the selection of music for sale was extremely limited.

Court ruling and further lawsuits

On October 26, 2010, LimeWire was ordered to shut down after a protracted four-year legal battle with the RIAA.

Facing trillions in damages, the company eventually agreed to pay $105 million with a message on its website urging uses to delete the software.

Federal judges ruled that the platform intentionally caused a “massive scale of infringement” by allowing over 50 million monthly users to freely download and distribute copyrighted music.

The following year, LimeWire was successfully sued by trade group Merlin on behalf of 12,000 independent labels.

Several Hollywood studios including Disney and Paramount did the same in 2012, though that lawsuit was dropped in November 2013.

Read Other Failure Stories: Lehman Brothers, American Apparel, Toy “R” Us, RadioShack, Forever 21, Gawker, Enron, Compaq, Kodak, Altavista, Palm, Friendster, StumbleUpon, Quibi, Blockbuster, Napster, Netscape, Chacha, MapQuest, Sports Authority, WeWork, Concorde, Xerox, Commodore, Circuit City.

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