Grokster Shuts Down. Long Live iTunes Music Store.

If can’t beat ‘em, quit. For now. That’s the word from file sharing goliath Grokster after a string of bad news.

Grokster has shuttered the doors, called it quits (mostly), shut down, halted operations (kinda) following lawsuits and an unfavorable Supreme Court ruling. What does this meanf or iTunes Music Store and Apple?

The Bad News: Grokster shuts down the file sharing service.

The service had allowed millions of computer users a quick, painless, and free way to find millions of songs in MP3 format and download them. Free.

The Associated Press says Grokster’s door shutting is directly related to a settlement with recording and movie companies regarding Grokster’s famous file sharing software.

The settlement bans Grokster from participating “directly or indirectly in the theft of copyrighted files and requires the company to stop giving away its software.” For now, no more Grokster.

Why? Lawsuits are cheaper by the dozen but more expensive to defend and Grokster didn’t have the money to defend itself.

The floodgates were opened earlier this year when “The Supreme Court ruled in June the entertainment industry can file piracy lawsuits against technology companies caught encouraging customers to steal music and movies over the Internet.”

That AP report said Grokster was weakened against lawsuit protections for software developers who merely blamed illegal behavior on customers, rather than take responsibility for their own software.

Meanwhile, the Grokster web site carries a simple statement:

“The United States Supreme Court unanimously confirmed that using this service to trade copyrighted material is illegal. Copying copyrighted motion picture and music files using unauthorized peer-to-peer services is illegal and is prosecuted by copyright owners.”

Well, duh. But Grokster also points out that “There are legal services for downloading music and movies. This service is not one of them.” That admits that Grokster was basically illegal.

As telling as the doors being closed, there is a hopeful (for Grokster, at least) message also on the home page: “Grokster hopes to have a safe and legal service available soon.”

What does that mean? Grokster is doing a Napster. The Grokster home page has a link to a new page called “

Grokster3G.” I’m not certain what was 1G or 2G, but assume that 2G was just closed.

The new Grokster says, “A safe, secure, and legal P2P experience” which features, NO Adware, NO Spyware, NO Bundles, NO Viruses, NO Hassle.

No kidding?

That sounds remarkably like iTunes Music Store and Mac OS X. An era has ended.

What does this mean for Apple and iTunes Music Store? Most likely it means more business as a few of the illegal ‘customers’ of Grokster find their senses and move toward a legal method.

Apple’s iTMS has approximately 80-percent of the online music download market.

What will Grokster offer in the future (besides the list above)? Speculation is rampant. All Grokster is saying is…

1 - the doors of Grokster are closed

2 - we have doors on Grokster 3G (but they’re closed, too—for now)

Summary
The legal water around peer-to-peer file sharing is as murky as ever. Stick around. If Napster can do it (rise from the grave), why not Grokster? Regardless, Apple stands to benefit while other file sharing software developers have to be busy consulting their lawyers.

Bambi Hambi
I used Napster but switched to iTMS because I preferred to help out Apple and felt good about doing it legally. That said, I’ve used Grokster for other files and just to see how it worked. It wasn’t Napster.

Alexis Kayhill
I’m a bittorrent fan, but find performance to be suffering. Grokster sure encouraged illegal file sharing, and did not discourage it. That was Grokster’s undoing. It might be interesting to see who is responsible for their customer’s use of software in the future.