Hollywood has been handed a legal victory against U.K.-based Usenet indexing site Newzbin by the England and Wales High Court today. The court found Newzbin to be liable of copyright infringement and ordered it to prevent any further acts of infringement related to titles from 20th Century Fox, Universal Studios, Warner Bros., Paramount, Disney and Columbia Pictures. The exact terms of the injunction still have to be defined, but Newzbin could be forced to install filters as well as pay as-of-yet unspecified damages to the studios.
This isn’t the first time Hollywood has taken action against a Usenet-related service. However, most of the previous targets were forced offline without getting their day in court, and Newzbin’s ruling provides a fascinating look behind the curtain of this part of the Usenet industry.
Newzbin is a site that indexes TV shows, movie and other files posted to Usenet. It’s a little bit like a torrent site, providing pointers to resources hosted elsewhere, with the added benefit that it also bundles Usenet postings, making it easy to download big files which are usually split up into dozens, if not hundreds of individual postings. Sites like Newzbin only work in conjunction with Usenet access providers, which have seen huge growth in recent years. However, it’s unclear how big exactly the Usenet industry is, especially in terms of revenue, which is why this case is so interesting.
The verdict released today states that Newzbin has around 700,000 registered users. The site offers free and premium memberships, the latter of which costs £0.30 ($0.45) per week. That’s not all that much, which is why it’s even more surprising that the site made £1million in revenue and £360,000 in profits last year. Apparently, it also “paid dividends on ordinary shares of £415,000,” according to the verdict. The site has three administrators, who are mentioned in the verdict, and who until most recently appeared to be the sole share holders.
However, much like it’s been the case with the Pirate Bay, describing Newzbin solely as a cash-positive enterprise run by a few tech-savvy folks with an unorthodox view on copyright issues would be missing the point. The verdict also mentions that the site has around 250 volunteer editors. From the verdict:
“The editors act, in effect, as a system of quality control and ensure that all of the individual messages that comprise a copy of a film or other binary work have been identified. They also add further descriptive information such as the title and overall file size and details of other attributes such as the source, genre and language of the work.”
Newzbin tried to portray itself as a kind of Google for Usenet. However, the fact that the site was not just a bit-crunching machine, but an actual community, was one of the reasons the court ended up ruling against it. The court also took issue with the fact that Newzbin is offering its members categories like Blu-ray and CAM, which seem to suggest the availability of copyrighted content. “I am satisfied that (Newzbin admin) Mr. Elsworth well knew that these categories were primarily intended for new commercial films,” the verdict reads.
Related content on GigaOm Pro: Why Viacom’s Fight With YouTube Threatens Web Innovation (subscription required)