Shawn Fanning, money owed.
06/05/2001 8:04:00 PM MDT Albuquerque, Nm
By Dustin D. Brand; Owner AMO
Shawn Fanning has a loan of $60 Million from Bertelsmann, can he pay it back now?
About a week after getting kicked on his fanny by MediaBay, some of the media is now reporting that Shawn Fanning can survive, and his music service gone legal even has a chance. Let me tell you why all of this is wrong, very wrong.
Shawn Fanning said his recent agreement with MusicNet is centered on this: "at such time as (Shawn Fannings' illegal music service) is operating in a legal, non-infringing manner and has successfully deployed a technology that accurately tracks the identity of files on the service." The keywords here are legal, and non-infringing. In the past 2 years, Shawn Fanning, the guy who created the illegal music swapping service (I will not say the name) has been hit by numerous lawsuits. The lawsuits, I must mention are in part from his recent "agreement" with MusicNet, a joint venture between AOL Time Warner, Bertelsmann, EMI Recorded Music, and RealNetworks. Bertelsmann who gave a loan of $60 million to Shawn's illegal service, on the grounds that it would be "legalized"; still has yet to drop their multibillion dollar lawsuit combined with the other record labels.
Now in these past 2 years, this $60 million dollar loan isn't what it used to be, and Shawn has been in court explaining why he's done nothing illegal. As you know, the courts didn't buy this, and Shawn Fannings service is under a court ordered injunction to remove music files from it's database which are illegally being shared. Since the court ordered injunction, file downloads are down 87%, more evidence to the fact that the current lawsuits against Shawn Fannings illegal company will prevail, and this means HEAFTY fines. On the table now, most recently, is MediaBay who is seeking millions in damages.
This $60 million dollar loan is gone, and Shawn Fanning owes it. MusicNet is well, MusicNet, a 100% legal music sharing service made by 3 major labels (and owned 40% by RealNetworks), one member being Bertelsmann who loaned the $60 million to Shawn Fannings' "company" in the first place. Now after all of this, it seems Shawn Fanning is left without the rights to distribute Music legally soley, everything is outsourced (for example MusicNet). Of course, he didn't have any trouble operating illegally for many years, and only recently was put into check.
The point is that 40% of the music representing AOL/TW and EMI isn't that large of a library, and Sony has their own service (Duet), and even AOL has MusicNet and LoudEye, so where does this leave Shawn Fanning?
All of this leaves Shawn Fanning with more than 1 heafty loan his "company" and "illegal service" owe, along with many more court ordered settlements with damages his "company" will have to pay.
Todays announcement of the agreement between MusicNet and Shawn Fannings' illegal service essentially turns his illegal service legal, and provided by MusicNet...
Let me explain the "agreement" in plain hidden english for you. The Agreement (a signed contract) is an acknowledgement from Shawn Fanning that his "company" has been operating illegally since the beginning, and this is more than enough evidence for MusicNet (and the rest of the record labels) could have asked for because now they can get DAMAGES in the millions due to acknowledged wrongdoing on the part of Shawn Fannings "company". Shawn Fanning owes a LOT of money in the next 6 months. Even with 6 million people paying $15.00 a month, the majority of this would go to MusicNet and it's not nearly enough to pay for 2 years of operating a business illegally.
Aside from the facts that lawsuits will be settled, and Shawn Fanning will be ordered to pay millions, potentially billions of dollars in damages, is it even probable that Shawn Fanning can make his illegal Service Legal?
The problem Shawn Fanning is facing is that his service is illegal, and in order to be legal, security and law needs to be in place - which inherently it currently is not. This means the illegal service he created does not exist in legal form, and technically he can't possibly make it legal. In order to make his service LOOK legal, he needs MusicNet and backing from the record labels - a 360 spin from what it has been, but beyond that, it has to work with his current illegal system. The thing here Shawn Fanning will not EVER be able to shake is the court ordered injuction currently in place against his illegal service, and the rememberance that his service is/was illegal. Without getting too deeply into psychological issues, just remember what I have said about Shawn Fanning and his illegal service; it can't be legal with years of work, or otherwise. The illusion put forth all along by Shawn Fanning is that his service is legal, which it is not.
Related AMO Articles:
MediaBay hits Shawn Fanning: another black eye.
Aimster loses battle with AOL.
mp3.com to be bought by Vivendi
Shawn Fanning crys FOUL!
Shawn Fanning has injunction now.
Shawn Fanning taking moves.
The rise and fall of Shawn Fanning.