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Gad-ZookZ! Antigua’s Would-be Cash Crop: Digital Content

You might call it a loophole, an imaginative reading of the law, or perhaps just a freak situation. In 2007, the country of Antigua was awarded $21 million a year in trade sanctions on U.S. intellectual property by the World Trade Organization. It was intended as a sort of reparation for the loss of business that ensued after the U.S. banned online gambling, much of which was being hosted on the island nation. An Antiguan company called Carib Media is now interpreting the decision to mean it can disregard U.S. copyright laws and make available a cheap and compelling subscription digital media service.

What do we mean by compelling? Well, Carib’s new site, ZookZ.com, launched July 15, offers unlimited downloads of movies or music for $9.95 per month, or $17.95 for both types of media. All content is DRM-free.

ZookZ has a library of some 50,000 MP3s and 1,500 movies, and plans to add 10,000 songs and 300 movies per week. It says it will do its best to get any content requested by members available on its site within 14 days of the request.

ZookZ’s site design is pretty terrible at this point, without even a simple index of available content. Most sections are unavailable to new users until they input their personal information and sign up. A company representative said improved search and discovery functions are due in the coming weeks. But once I was signed into a test account, it was easy to search for and download a copy of Slumdog Millionaire. The transfer wasn’t especially quick, but ZookZ delivers all its files from its own servers in Antigua, and this was a 702 MB movie. The company says its standard movie resolution is 640×480 DPI, and that it utilizes a 100 Mbps pipe that can burst up to 1 Gbps.

Carib is the first company I’ve ever heard from as a reporter that offered up its legal counsel for interview as part of its initial pitch. So I took them up on it. “This business is open because there’s an unusual legal foundation for the conduct of the business,” said ZookZ legal adviser William Pepper. Our phone interview came a day after the site launched, at which point it had signed up 100 members.

Pepper and other ZookZ representatives said repeatedly that they obtain the site’s content through “legal means.” The company also makes efforts to ensure that all the content it’s distributing is from the U.S. Also on the call was Marlie Hall, head of corporate communications, who said that for some content ZookZ will actually buy a physical DVD and rip it into a DRM-free format to distribute. That can’t be legal, I said.

“It’s an Antiguan company based in Antigua conducting business in Antigua — it’s different,” replied Pepper. Until ZookZ and any competitors bring $21 million in revenue combined within a year, the company thinks it’s just realizing what’s been set aside for Antigua by the WTO.

Yet the site is actively seeking international business; Hall and the company’s PR firm are both based in the U.S. I am, too, so I have to pray the powers that be — if and when they clamp down — understand that I was only trying out the service in the interest of my readers.

This article also appeared on BusinessWeek.com.

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