Limewire Shut Down

LimeWire's launch predates the Apple iPod by 19 months and the iTunes store by 23 months. Today millions of users accustomed to illegally sharing copyrighted content over the past decade will be temporarily inconvenienced after a permanent injunction against LimeWire's illegal peer-to-peer filesharing operation.

The New York federal court ruling is a significant, but not game-changing legal victory for a battered music industry. But LimeWire as we know it is dead. As with the closure of other peer-to-peer networks such as Napster before it, LimeWire must now go legit.

The permanent injunction follows a four-year legal battle brought by music industry heavyweight, the Recording Industry Association of America. The level of damages faced by the site will be revealed in January – the RIAA says LimeWire has single-handedly cost the music industry hundreds of millions of dollars.

Ripples from the ruling will reach the internet's innumerable other peer-to-peer networks. But history says it will do no more. The internet is awash with people sharing things, legally and illegally.

"It's not about the technology, it's a paradigm shift," says Mark Mulligan, an analyst specialising in music at Forrester Research. And the notion that you can eradicate illicit filesharing if you eradicate particular networks is a fallacy.

"It's so much more than that," Mulligan adds. "The record labels have won this battle, but they've not won the war."

Some have predicted that the LimeWire closure will have an "unprecedented impact" on peer-to-peer filesharing. Hold your horses, look at the history books, says Mulligan.

"It's significant to a degree but I wouldn't say it's game-changing or will change the filesharing landscape. There are many instances of filesharing networks [where] once the legislative process has caught up with them they've just tried to make a pass towards legitimacy. Look at Napster and Kazaa – there are numerous examples," he adds.

"It has done nothing to dent the scale of filesharing. The reason they fileshare is not because they love the way the technology works, it's because it's easily accessible content which is free.

"The simple fact is that the vast majority of music fans don't like paying for music – and that's even more pronounced in the filesharing community. Look at Spotify, they're at a peak conversion rate [percentage of paying customers among all users] of 5% at the moment – and it's that high because of their iPhone strategy and portability."

The best case scenario for freemium models of music streaming is a 10% conversion rate, insists Mulligan. "LimeWire even in their wildest dreams couldn't hope to convert that amount of people. Hopefully for LimeWire's sake and for the industry's sake they can convert a small amount of users, that's the best they can hope."

The solution, experts predict, is a service free at the point of access and subsidised by a third-party carrier – a mobile operator or an internet service provider, for example.

"This is where LimeWire should start to play," Mulligan says. "In the current landscape that's the only way that free can be made to pay."

George Searle, LimeWire chief executive, today put on a brave face. "Our team of technologists and music enthusiasts is creating a completely new music service that puts you back at the centre of your digital music experience," he wrote on the parent company's site. "We'll be sharing more details about our new service and look forward to bringing it to you in the future."