Limewire pays first installment of $12m to Warner Music

SHUTTERED MUSIC SERVICE Limewire has paid Warner Music $12m as part of its settlement with music recording labels.

Limewire's turbulent existence came to a shuddering halt at the tail end of 2010 as a court order resulted in the music sharing service shutting up shop. The outfit eventually came to agreements over damages with both music labels and publishers and the payment to Warner Music Group for $12m is the first in a long line.

The record labels had argued that Limewire's activities led to them losing $1bn. Of course there is absolutely no way that the labels could ever verify that figure but since it sounds good in headlines, the MAFIAA stuck with it. In any case, Limewire's first cheque for $12m would barely cover the legal bills for a firm like Warner Music Group.

AllthingsD is reporting that Warner Music actually saw a rise in revenue thanks to digital sales in the past quarter. Nevertheless it still managed to rack up a $47m loss. We would suggest that rather than shutting down services such as Limewire that are extremely popular, the labels wouldn't go far wrong by trying to make the services work for them, but since our advice doesn't come with a £200 per hour fee, it will probably be ignored.

Given that Limewire has paid $12m it suggests that the company was making a profit from the service. However whether it has enough cash in the bank to fulfill all of its legal obligations is still uncertain. µ