As more and more big movie companies attack P2P networks, Grokster found themselves being sued by MGM and, like many others, could not afford strong legal defense. The Electronic Frontier Foundation (God bless 'em) contacted Mark Cuban, and Cuban wrote in his blog that he would "finance the legal effort against MGM" From http://news.com.com/Mark+Cuban+to+finance+Grokster+defense/2100-1032_3-5641530.html?tag=nefd.top Mark Cuban to finance Grokster defense Published: March 27, 2005, 2:30 PM PST By Steven Musil Staff Writer, CNET News.com Billionaire Mark Cuban has announced that he will finance Grokster's defense against MGM's peer-to-peer lawsuit, which is expected to be argued before the U.S. Supreme Court on Tuesday. Cuban, the entrepreneur who sold Broadcast.com to Yahoo for $5.7 billion and who's now president of HDNet, a provider of high-definition TV programming, wrote in a blog entry Saturday that he had agreed to fund the software company's defense after he was approached by the Electronic Frontier Foundation and others. The case centers on whether file-sharing software companies could be held legally responsible for copyright infringement on their networks. Cuban, who's also the owner of the Dallas Mavericks basketball team, said a Grokster loss would create a stifling legal environment that would virtually eliminate technological innovation in the United States. "If Grokster loses, technological innovation might not die, but it will have such a significant price tag associated with it, it will be the domain of the big corporations only," Cuban wrote. "It will be a sad day when American corporations start to hold their U.S. digital innovations and inventions overseas to protect them from the RIAA (Recording Industry Association of America), moving important jobs overseas with them." Cuban said his decision was also motivated by the fact that lengthy court cases have prohibitively high legal costs. "It doesn't matter that the RIAA has been wrong about innovations and the perceived threat to their industry every single time," Cuban wrote. "It just matters that they can spend more (than) everyone else on lawyers." The case focuses on Grokster and StreamCast's Morpheus, popular file-swapping applications that are widely used to trade movies, music and software. Studios and labels sued the companies in 2001, following successful legal campaigns against peer-to-peer trailblazer Napster. Attorneys for the entertainment conglomerates said the newer file-swapping services were, like Napster, building businesses based on copyright infringement. But Grokster and StreamCast were built around a different technology than Napster. Their services involved a highly decentralized network of individual computers trading files among themselves, rather than a network controlled from a central location. Lower court judges said that the companies did not directly control what happens on their networks, and that their software could be used for legal purposes. That shields the companies themselves from legal responsibility for the actions of their users, the lower courts said. ===== quotes from Cubans blog: "It wont be a good day when high school entrepreneurs have to get a fairness opinion from a technology oriented law firm to confirm that big music or movie studios wont sue you because they can come up with an angle that makes a judge believe the technology might impact the music business. It will be a sad day when American corporations start to hold their US digital innovations and inventions overseas to protect them from the RIAA, moving important jobs overseas with them. Thats what is ahead of us if Grokster loses. Thats what happens if the RIAA is able to convince the Supreme Court of the USA that rather than the truth, which is , Software doesn't steal content, people steal content, they convince them that if it can impact the music business, it should be outlawed because somehow it will. It doesnt matter that the RIAA has been wrong about innovations and the perceived threat to their industry, EVERY SINGLE TIME. It just matters that they can spend more then everyone else on lawyers. Thats not the way it should be. So , the real reason of this blog. To let everyone know that the EFF and others came to me and asked if I would finance the legal effort against MGM. I said yes. I would provide them the money they need. So now the truth has been told. This isn't the big content companies against the technology companies. This is the big content companies, against me. Mark Cuban and my little content company. It's about our ability to use future innovations to compete vs their ability to use the courts to shut down our ability to compete. its that simple." Seriously, he just completely shot up to the top of my hero list. -- droxford
They can win. But eventually, P2P networks are going to be regulated/monitered. That beats the heck out of the alternative: recording/film industries getting to monopolize digital distribution. Evan
Good for Mark. What a great name (haha same as mine). What if people in India and China start to make these software? Do they have to follow the US law? I sure hope not.
this is part of the silliness. Through the P2P networks, files can move to/from any country anywhere. The laws really only make it illegal for Americans to operate the network. And, as Cuban pointed out, that just moves the business, work, and opportunity to other countries. But that's what the RIAA and MPAA do: try to destroy technology to keep hold of their media. -- droxford
I'm a thief and would like to continue stealing music, but even I understand, the point of the software is to steal music. I don't see how the software can win it's case. The intent here is obvious. While the law is something entirely different. And while they may very well have a legal case to provide said software, I believe the intent of the software will allow the courts to shut it down. It is a clear and present danger to the music industry. I don't like it, but i know it's true.
I don't know about hero, but at least he comes to the defense of those that will not only affect him, but his fans/customers...
well I have to disagree.. the intent of the software is to share files whatever they may be. I know 2 local bands that upload their music to share with anyone that is willing to listen. For them its a great way to get their music heard with paying big money for advertising. I understand on the flip side alot/most people use for illegal means but you cant punish the few for the actions of the many. J
Many unkown bands and artists really like the P2P format for music sharing. It is only the big companies that are against it.
Cuban is pushing a digital theater chain and one of the big issues against digital is the fears of online piracy if every movie is sent through the net. He thinks it's as safe with encryption as some pirate lifting the movie reel and pirating there. I think he's right though. If P2P dies off, a lot of businesses will get too comfy and innovation will die.
I was always wondered why the p*rn industry seemed to embraced p2p while RIAA and MPAA have fought it tooth and nail, I'm not sure you know why this is but if you do I'd sure like to know.
^I don't think p*rn production companies like their movies and pictures being lifted, but since there's hundreds of small companies they don't have the combined power like the movie or music industry to do anything. Then you have websites who profit off the producers of images and movies knowing that most can be covered by Public Domain, or if worse comes to worse, the can remove that offending file out of many others still remaining. Playboy is a good example of fighting the net while promoting their own website. Good thing Playboy sucks 99% of the time....
As a media owner, Cuban realizes that making the information illegal to distribute hurts not only the pirates, and not only the legitimate outlets for media distribution, but also the media owners as well (especially the smaller ones). If his media has a hard time getting distributed, his costs will increase as his audience decreases. -- droxford
The pron industry sees things from both angles: Their content gets ripped off and distributed and they lose money off that just like other media owners. But they've realized that they can still make a LOT of money, and they can greatly increase their popularity if they get more and more of their content distributed. They have generally accepted that they can't stop the bootlegging, and instead, they place their logos and urls on all the images to promote their site. They themselves utilize large networks to distribute their content freely. think of all the spam pron emails that are sent with "free pron in your mailbox every day" Or look at how they post batches of images on the internet newsgroups. They even spread their content through instant messaging. -- droxford
I strongly disagree... sure there will be some alternative paid P2P programs (much like Napster became) in the distant future, but there will always be users pushing the envelope. Look at the continually growing popularity of BitTorrent... Nerds will always outwit the corporate bean counting a-holes.
this is all a price play. The function of how much you would pay to download a high quality song as opposed to the risk and time value of searching for a lower quality bootleg. I have always felt that an acceptable market value should be around .25 Cents a song with a .25-.50 cent premium for singles. This should combat the piracy as much as possible. Will there always be piracy? Absolutely. So at what point do the record companies recoup as much of their lost revenue's as possible without destroying margins. Also, the record label's need to re-asses their current margin structures. With the advent of the internet, they will never be what they once were so they need to identify what the new acceptable percentage will be.
The record labels aren't worried about their margins, they are worried about raping people for every cent they have coming. Apple is fighting the 5 major labels who are pushing for pay increases on "Per Song Downloads" from their iTunes service. The record labels in all of their brilliance have seen it catch on and immediately think they can score extra bucks. There will be music pirates as long as the record labels are run by corporate bean counters who rush album productions to meet said bottom lines and could actually care less about the quality of the music they release... I will ALWAYS pay for music by artists I believe deserve it, but the TRL crowd who munches up the one hit wonders and continue to do so... I'll just use my friend LimeWire instead. http://money.cnn.com/2005/02/28/technology/personaltech/music_downloads/?cnn=yes
this is why record labels should take away the third parties. The only reason apple is doing well is due to the popularity of the i-pod. This will surely decrease as more viable competitors enter the market. Also, if the record label itself was working as the first person in the downloading process, it wouldn't have to worry about the mark up percentage they are losing. This would also allow the record labels to place their own pricing structures on artists, i.e. Brittany Spears songs and pop 40 could be priced higher than lower budget artists.
