Kuro

» see kuro.com.tw as it lived, on the wayback machine

~ the obit ~

Kuro sold a subscription to file sharing, and that is the part that does not travel. Half a million people in Taiwan paid ninety nine Taiwan dollars a month, roughly three US dollars, for a client that let them pull music off each other's machines. Nothing in my orbit worked like that. Whatever moved between machines in Turkey moved for free, and attaching a monthly bill to it would have ended the appeal before anyone finished installing.

Feiliu Networks launched Kuro in 2000 and started charging in January 2001. Paid membership went from fifty thousand at the end of 2001 to three hundred thousand a year after that, and at its largest the company was claiming five hundred thousand. Taiwan had about twenty three million people. That is close to everybody who owned a computer and cared what was on it.

The subscription is also what hanged it. Napster could tell a judge it was only a network and Kazaa could tell a judge it was only software written by somebody else. Kuro had a price list with a customer database attached, plus employees who had been putting music onto the network themselves to keep the shelves full. The court fixed on exactly that.

~ the rap sheet ~

~ the rise ~

A market the size of Taiwan is the right size for one program to become the entire habit. Kuro was that program for five years, and its only real competitor was ezPeer, which worked the same way and charged about the same. By late 2003 both were under indictment and both understood where this was going. Instead of denying anything they proposed a P2P industry alliance and asked for compulsory licensing to be written into the copyright law, so that the fee they were already collecting could be shared out with the people who made the music.

That is what a company does when it can see the direction of the wind. Nobody in the recording industry was interested in legislating a settlement with the two defendants.

~ the case ~

On 9 September 2005 the Taipei District Court convicted the company's leadership. Chairman Chen Shou-teng was given two years, while the chief executive James Chen and the president Chen Kuo-hsiung were given three years each with fines of three million Taiwan dollars apiece. The court found that Kuro had advertised what its paying members could obtain and that staff had uploaded music files to keep the library stocked, which put the company on the wrong side of the line between a tool and a service.

A subscriber named Chen Chia-hui was convicted alongside them and given four months, suspended for three years and commutable at three hundred dollars a day. That was the sentence the record industry wanted printed. The same summer the Shilin District Court had cleared ezPeer on charges that looked much the same from outside, so within a few months Taiwan produced two opposite verdicts about the same business model, and the difference between them was conduct rather than technology.

~ what got buried with it ~

The civil case ended on 14 September 2006. Kuro paid IFPI Taiwan three hundred and eighty million Taiwan dollars and agreed to scrap the peer to peer platform within a month, which is the date to put on the stone even though the software kept breathing for a few more weeks after it.

By October the company was a front door for Yahoo Kimo Music. The first hundred thousand Kuro members who registered got ten songs free at thirty five dollars each, with Kuro covering thirty five million dollars of that bill out of its own pocket. Six years of being told it was stealing music ended with the company paying a portal to accept its customers. The half million people who had been trained to pay for downloads went and paid somebody else, which was the outcome the labels had wanted from the start, and it took a criminal conviction to get there.

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