Indie Record Label Group Wins $10 Million Infringement Settlement

Show me the money!

Limewire, the P2P file sharing software, has agreed to yet another settlement in copyright infringement litigation, this time with the indie label representative group Merlin.  The software company, which allowed users to transfer music and other copyrighted files between each other, previously settled with major record labels for $105 million.  As part of a court order, Limewire has been unavailable to download since October, 2010.  Today’s announcement deals with the smaller labels, who represent such artists as multiple-Grammy winning Adele.  In the much-publicized lawsuits against Napster, the indie labels were left out of the settlements due to a lack of resources, despite being affected just as much as the major labels.  The Merlin group was created to offset this imbalance, representing a multitude of labels and boosting their ability to defend themselves against copyright infringement.

As the world moves beyond physical copies of records and towards direct digital downloads, what does the future look like for record companies and copyright?  Napster and P2P networks of that ilk represented a new wave of interaction between people and music.  Free digital copies of songs, despite being illegal, were an irresistible lure for many users.  The fallout of litigation against the companies, though, did little to stop this proliferation of easy-to-use digital downloads.  After Napster came Kazaa, then Grokster, then Limewire, all fallen by mountainous legal fees.  However, a look at the current popularity and resilience of Bittorrent and the Pirate Bay reveals that free illegal downloads are not going away.  So, the problem is not simply a matter of law.  It’s a matter of customer preferences.  Record companies now have to compete with free, which to them is impossible,  leading to buckets of litigation as a solution.  Another avenue is to make buying music easier and more satisfying than the free option — a solution that Apple has capitalized on with the popularity of the iTunes music store, and which Amazon and Yahoo are now starting to explore.  Perhaps labels need to adapt to this change instead of fighting it.  Surely their legal fees will go down, if nothing else.

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