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GROKSTER BLUES
Marketing to scofflaws
BY DAVID S. BERNSTEIN

It’s hard to feel much sympathy for the folks at Grokster Ltd., Streamcast Networks Inc., and other file-sharing-service providers. After all, as Justice David Souter made clear in the Supreme Court’s Monday decision, their business plans were predicated entirely on users’ illegal behavior. The vast majority of the files downloaded on Grokster — more than 90 percent — are copied illegally, without necessary copyright permission. The court decided that at some point, a company should be held liable for that. Agree or disagree, it’s not wholly unreasonable.

And yet the business plan was working, and it was working because it is advertiser-driven — it relies on big, well-known companies spending large sums of money to advertise to people who are actively engaged in illegal behavior. Dell, AT&T Wireless, Lancôme, and even the US Air Force have advertised on Grokster. That’s right, the Air Force is specifically recruiting law-breakers.

What’s striking, however, is that these advertisers have suffered no apparent harm to their reputations for doing so — whereas presumably they would for, say, buying ad space on glassine wrappers or rolling papers ("Got the Munchies? Munch on Doritos!").

You might expect the Recording Industry Association of America (RIAA) and its member companies to work hard to discourage advertising on Grokster and the like. After all, they have spent tremendous time and effort trying to shut down both file-sharing-technology makers and users. Surely they are likewise pressuring and educating the advertisers who are financially supporting the whole enterprise.

Well, no. And neither is the Motion Picture Association of America (MPAA), which has recently worked just as hard to stop digital copying. Neither group has ever issued a press release condemning Grokster advertisers, and neither mentions anything about this aspect of the problem on their Web sites. When contacted by the Phoenix, spokespeople for both organizations were unaware of any official position on the matter.


Issue Date: July 1 - 7, 2005
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