Can LimeWire Brand Juice Adoption of New NFT-based Music Marketplace?
A pair of entrepreneurs has bought the rights to the defunct file-sharing service and plans to launch a new site in May
LimeWire co-CEOs Julian and Paul Zehetmayr | Source: LimeWire
key takeaways
- LimeWire, launched in 2000, was a popular peer-to-peer file-sharing service until it was sued out of existence by the Recording Industry Association of America in 2010
- The NFT marketplace will be an artist’s alternative to Spotify, which pays out notoriously small royalties
Any music fan born before, say, 1990, probably remembers LimeWire, which grew to prominence in the days of the free MP3-swapping services Napster and BitTorrent.
But music labels considered the service an enabler of wholesale intellectual property theft and sued. After a four-year court battle that ended with a “permanent injunction” in New York, the company pulled the peer-to-peer plug on 50 million monthly users.
Now, a pair of Austrian entrepreneurs — brothers Julian and Paul Zehetmayr — are bringing back LimeWire with a crypto twist. The Zehetmayrs purchased LimeWire’s intellectual property in 2021 for an undisclosed sum, hoping to juice the launch of a new music-focused NFT marketplace.
The project — which is otherwise entirely unrelated to its namesake — is slated to launch in May and allows fans and music collectors to trade music-related assets using NFTs (non-fungible tokens).
The platform differs from major players in the NFT marketplace business today, such as OpenSea and Rarible, in that it is custodial, allowing customers to purchase NFTs with fiat currencies, according to Julian Zehetmayr, LimeWire’s co-CEO.
“To be clear, we are big fans of decentralization,” Zehetmayr told Blockworks. “At the same time, we believe the market just isn’t ready yet for fully decentralized platforms to be appealing and usable for the mainstream.”
NFTs will be minted on a blockchain — the company declined to specify which until it’s announced later this month — and can be withdrawn to noncustodial wallets.
“We are actually combining the best of both worlds, allowing users to trade decentralized collectibles on an easy-to-use, custodial platform offering fiat payments, easy signup without a wallet, and a very simple and clean user experience,” Zehetmayr said.
The plan is to share 90% of primary sales revenue with artists, while LimeWire will take a 10% cut. The platform commission on secondary sales will be lower and earn artists royalty payouts.
There will also be a token, LMWR, issued in the fourth quarter that will allow users to cut down on commission fees, participate in a rewards program and engage in voting and moderation of initiatives.
When LimeWire was shut down in 2010, a US District Court judge called its service “a massive piracy machine.” (Incidentally, Napster suffered a similar fate in 2002, while BitTorrent survived as a decentralized network, eventually acquired by Justin Sun in 2018 as part of an effort to boost the Tron ecosystem.)
“Web2” successors, such as Spotify, cut record companies in on the action, but pay artists a small fraction of sales revenues. NFT-based music services are designed to establish the provenance of media assets while equitably distributing revenues, including royalties, to creators.
This story was updated on March 9, 2022 at 1:13 p.m. ET
Update: March 14, 2022 10:30 a.m. ET:
Limewire announced the NFTs will be minted on the Algorand blockchain.
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