By Ronald Weisenstein
A US federal judge granted the music industry's request to shut down LimeWire Tuesday, further eroding the likelihood that the popular file-sharing service will exist in its current form for much longer.
Judge Kimba Wood in Manhattan accepted the request because the service had been found liable for copyright infringement.
According to a Reuters report, "Saying that LimeWire's parent Lime Wire LLC intentionally caused a "massive scale of infringement" involving thousands of works, Wood issued a permanent injunction that requires the company to disable its "searching, downloading, uploading, file trading and/or file distribution functionality."
Record companies "have suffered -- and will continue to suffer -- irreparable harm from Lime Wire's inducement of widespread infringement of their works," Wood wrote.
She called the potential damages "staggering," and probably "well beyond" the New York-based company's ability to pay.
The Reuters report notes that ,"The signed ruling was made available by The Recording Industry Association of America, which represents music companies. It has said Lime Wire has cost its members hundreds of millions of dollars in revenue."
To be sure, the vast majority of LimeWire users will likely find other means of obtaining music without paying. There are sure to be beneficiaries of the news, however, and Benzinga has highlighted three below:
Apple's (AAPL) iTunes software is clearly the (legal) consumer favorite for music playing, downloading, and syncing with mobile devices, like the iPod. The company has generated enormous revenues from music downloads, of which it collects a percentage of every sale. While it would certainly take time for the number of iTunes downloads to increase because of a LimeWire shutdown, the impact on Apple's earnings over the long-term could be material.
Warner Music Group Corp. (WMG) is a music content company. The company operates in two segments: recorded music and music publishing. Both businesses benefit from LimeWire's demise, because new music won't be infringed upon as much, and existing content will be protected better. Indeed, with rights to over 1 million copyrights from over 65,000 songwriters and composers, the company is surely celebrating Judge Wood's ruling.
CKX, Inc. (CKXE) is engaged in the ownership, development and commercial utilization of entertainment content. The company has a number of business segments, but its 85% ownership interest in Elvis Presley Enterprises is the big earner. The rights include the name, image and likeness of Elvis Presley, and certain music and the operations of Graceland, and has partnered with Cirque du Soleil for the creation of Elvis Presley-themed shows and projects worldwide.
CKX has grown net income year-over-year for the past four years, and the LimeWire judgement could be a boost. If shares can hold $4 support, the stock could make a run toward $6.
Shares of Apple are down 1.30%, to $303.92 this morning. Warner Music Group is down 2.44%, to $5.19 and CKX follows at 3.94 going down 8.58%.
Disclosure: No positions