They lost. I'm not sure what to make of this. On one hand, I think that this may be a tipping point where the media companies become a real enemy to the average citizen. A fine is one thing, but jail is another. On the other hand, the owners of the Pirate Bay were brazen. I suspect in Sweden there may be some backlash, but I don't see the rest of the world being too sympathetic over an operation such as this.
Whatever happens, the war will be won with technology. Services such as
Oneswarm give file traders a leg up. How long can the media companies fight this war?
I think that quality content providers deserve to be paid. However, I think that media companies need to stop living in the past. They need to adjust their business model to present day reality. I would gladly get all my TV shows from ITunes. At $2 per show, though, I still have cable. If I watch just four or five of shows a week, it's not competitive with basic cable TV. That's absurd since cable offers so much more content. Throw in Hulu and Netflix, and $2 per show becomes even more absurd. Throw in DRM, and it gets worse.
They need to find a price point that makes paying worthwhile. Their advantage is that they can give you a fast download on demand. That's better than many torrents. But if the price is too high, people will accept the inconvenience of bittorrent. They also need you to watch the file whenever you want and however you want - and on whatever machine you want.
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edit: Or not. I guess the deal fell through in 2007.
I myself thing a FRC Oneswarm net would be very cool.