LimeWire’s resurrection came as a surprise to its former founder but it’s paving the way in web3 music with $10.4 million in funding and a deal with Universal Music

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Most millennials will remember the torrenting platform LimeWire. The software was one of the torchbearers of peer-to-peer (P2P) file sharing in the early aughts, responsible for countless music downloads and nearly as many computer viruses. 

But hey for a cashless teen who spent their weekends at the local library scouring the CD aisle for unscratched discs so he could burn them at home, the risks of malware were worth it (the idea of something like Spotify would have blown my mind). And I was far from alone. A 2007 survey suggested that more than a third of the computers on earth had LimeWire installed. 

Like Napster and KaZaA before it, LimeWire eventually succumbed to an injunction by the Recording Industry Association of America (RIAA), who said LimeWire owed them $72 trillion – that’s more than the GDP of the entire planet – before eventually settling for $105 million. LimeWire stopped distributing the software and that was that.

But that wasn’t the end. Last year, LimeWire was back in the news to announce its return as an NFT platform. Officially this new web3 version has nothing to do with the original. After the trademarks expired, Austrian brothers Paul and Julian Zehetmayr resuscitated the brand, purchasing the domain from a former employee. 

LimeWire’s former founder and CEO Mark Gorton didn’t even know about it until the news broke, and he was “not thrilled” when he found out. “Using the LimeWire name in this way creates confusion and falsely uses that brand that we created for purposes for which it was never intended,” he told TorrentFreak.

Even if Gorton’s not happy about the connection, people will inevitably link the two, which was entirely the point of course. It’s the reason press outlets flocked to the story, and likely a driver of their initial success.

In an April token sale the new LimeWire raised $10.4 million. In May, they signed a licensing deal with Universal Music Group – the same major label that “sued LimeWire back in the day for an eight- or nine-digit lawsuit,” current COO Marcus Feistl told me. And in July the brand “relaunched,” dropping a slew of NFTs from artists like Travis Barker, Brandy and Dillon Francis.

The buy-in from artists is somewhat surprising, as P2P file sharing on platforms like the original LimeWire was copyright infringement – digital theft. That’s no longer the case, though. The new LimeWire operates by giving 80 percent of each primary sale to the artist. It’s an improvement from its namesake, but the 20 percent fee is still much larger than the 5 percent cut taken by fellow music NFT platform Sound.xyz, or Catalog and Nina, which take no cut from initial sales at all.

Still, 5,000 creators signed up within the first two weeks, Feistl told me, and some shared fond stories of the brand, telling the team how the platform was responsible for expanding their listening profiles and pointing their careers toward music.

Read more: The Beat: U.S. Radio Royalties, Permission to Stream, Captain and What Artists Really Want

I caught up with Feistl recently, and we chatted about the immense nostalgia that exists for LimeWire, in spite of its roots in piracy, and the odd placement of that nostalgia: on a resurrected brand that has very little in common with the original. We also discussed how all of this gave him pause while he considered joining the team, as well as the passion he feels for working for a brand that helped shape his musical taste.

DeCential: I’d like to start at the beginning and dive a little bit more into your background – when your relationship with music started, and when web3 started to come into the picture.

Marcus Feistl: Happy to! I started playing different kinds of instruments very early. My parents were very keen for me to learn something. I, as probably every boy, was always envisioning playing the drums, which I did for a couple of years actually, and then somehow lost track of it, which is why I'm so excited to do this.

It’s also interesting technology-wise, but now it feels more like passion because there's so much more emotion involved in music than in just selling the technology of NFTs.

I have a couple of my friends who tried to be full-time professional musicians, and really struggled, especially during university time. At some point they had to reset for a different professional career because there aren’t that many pathways to monetize it.

I think that's exactly the vision that we have behind it. We really wanna give those smaller creators a platform to create their community and be engaged with their community without losing control of their music rights and ownership.

My [professional] story is entrepreneurial, discovering new industries and pathways ever since I initially started my own startup, a fintech startup in London.

I did my master's studies [in London], and for postgrad-non-UK students, it’s relatively hard to finance your master's degree. And you don't really get a loan in Europe from any European country without providing collateral. So if you have a background like I had, your parents can't really vouch for you – despite the fact that you probably have a pretty high expected income afterwards, so that's where we stepped in, which worked pretty well until Brexit came. 

After that I moved to the crypto space. I joined BitPanda, which was an absolutely crazy ride. I think we scaled within two years from 300,000 customers in Germany, Austria, and Switzerland to more than 2 million, and then shortly thereafter, I just wanted to dive into crypto and NFTs and everything that surrounded them a bit deeper.

Then I got to know Julian and Paul. They came with the idea of doing something in the music space, but they had limited knowledge of the crypto space – how regulation around it works and how operations work, which is why I joined here as a COO, pretty much revamping the old LimeWire brand. 

I – probably just like you – used [LimeWire] in my teenage years. I'm pretty sure I wouldn’t have gotten to know that variety of music – from hip hop to rock to R&B – without a platform like LimeWire. 

DC: So how did you meet the two founders? How did these conversations start? 

MF: Absolute coincidence to be honest. I had a very brief email conversation back in the days when I was still at BitPanda because Julian wanted to open a business account.

There were some issues, which is why it got escalated to me. And then I had a very brief email conversation with them to solve the problem, and then Julian messaged me again and he was like, ‘you would be the perfect fit.’

We are here in Vienna, and there are not that many crypto-experienced senior managers in Vienna, so he figured it might make sense to sit down together. That was last year, November [2021], I believe.

DC: I'm curious why they chose to buy all of the LimeWire assets and use that brand in particular?

MF: The story is quite interesting – it’s also what got me hooked. Paul and Julian have great experience at scaling technology and software companies.

They wanted to do something in the creator space, and their whole idea was: find a mainstream brand that we can use to take some of those solutions that web3 and NFTs are offering to the mainstream. 

It’s very hard to convince [creators and fans] simply because those brands are complete no-name brands and many of them already sound very technical – whereas LimeWire is something that resonates with pretty much everybody. 

So they got the brand first, which was definitely the hardest part – took them a couple of months to get all the assets because they were scattered amongst different people. And then after that we had multiple discussions around how we structured, what the setup would be, and what the solution would look like. 

DC: I think one of the biggest opportunities within the space right now is because it's still obviously very niche. There has to be a bridge to the rest of the world. A lot of the [LimeWire] listings are much cheaper than you would get in a lot of other music NFT platforms. Is that the idea behind those decisions? 

MF: Yeah, a hundred percent. If you don't want to, you don't even have to know or think about owning NFTs. For you, it's just access to content – purchases through credit card.

But at the same time, you obviously also have to create a web3 journey, so Metamask connection, transferring NFTs out. That's fully supported. But the goal – the easiest way to go about it – is really that you can hold them on our platform. It's fully custodial. The assets are secure, you can pay by credit card and you don't even think about crypto.

DC: So when you first joined the founders, where were things? What were some of the core initiatives that you looked at right away? 

MF: So at that point in time, the company was incorporated and brand assets were already acquired. They had a good idea of which direction they wanted to go. But there were a couple of really big steps that still needed to be taken – like acquiring artists for the platform. That was a big, big to-do.

Another one was our native token. We knew we would need funding to pull this off because it's a huge brand. You can't start like a small scale up in a garage, because the brand value is so huge. So we did a private token sale with lots of investors in the web3 space, and we got a lot of artists onboarded. That was completely missing at that point. And we put a framework in place with Universal Music.

DC: Did you get any pushback initially from artists or from labels – given the nature of what LimeWire was historically? 

MF: To be honest, that was my question. We had discussions for around two months where I was thinking, should I really join?

And that was one of my key concerns at the beginning, that LimeWire consumer-facing was such a huge brand and a lot of people have fond memories and were happy users back in the day. But on the other side – B2B-facing and artist-facing is quite the opposite, right?

Universal Music Group sued LimeWire back in the day for an eight- or nine-digit lawsuit. Same with a lot of the artists. So my fear was: we can probably get a lot of the consumers excited, but can we actually get the artists on board?

And then we started doing the [outreach] and I think in the first month we had a 90 percent success rate in terms of responses, which was completely crazy. Just through cold email because every artist was excited or just curious that an email was coming in from the LimeWire.com domain.

The only pushback we got was when we already had all the terms with Universal negotiated and all the paperwork was almost done. We were really just waiting for the signature. They had to go through the management board in California. One or two of the more senior managers at Universal were raising eyebrows when they heard LimeWire. 

But apart from this, it was really positive, especially with the artists. 

DC: Interesting. It’s the classic exposure argument. Music was free, but you got exposed to a lot of people. It may be better than being stuck in your own feedback loop in a place like Spotify's algorithm where, for all intents and purposes, [most} artists are getting paid about the same as they were from LimeWire. 

I'm curious how you're handling curation and things like that, because that's a big piece for a lot of NFT platforms.

MF: We’re pretty 50/50 on it because both approaches have their reasoning, right? If you curate very rigorously, at least you can be sure that the content is good, but it obviously limits your scalability. 

The other way around, it puts you at risk massively – especially inappropriate content, which LimeWire has also been famous for. So what we did is a two step approach.

We first wanted to see how many artists are interested in launching on LimeWire. So when we did the LimeWire spec campaign in May and June, we opened a bit hidden. We had a separate email sign-up just for creators to apply to be among the first 100 creators in LimeWire.

And that exploded super quick. I think we had 5,000 sign-ups within two weeks. So from that point on we were like, ‘okay, so we at least need to spot check who these guys are and what are they doing.’ So we made them go through an application process where they had to upload content pieces and connect social media accounts.

And then we saw pretty quickly that there’s a certain percentage of creators who are probably not the ones we want to have on the platform. I don't wanna be restrictive with creators, but we had pornography that was submitted as well, and that's obviously not something we wanna put online. 

So from that point onwards, we decided to have a strict curation process. Every artist can onboard easily, but every piece is checked by our customer support team before it goes live.

DC: So it's not like a quality rubric, it's more – is this against the law?

MF: Basically, yeah. At the beginning we were also checking if there was some sort of music relation, right? Because that was the main promise. We want to be back in the music business again. But especially starting January, we will have another iteration with a couple more features where we will iterate on the platform, in terms of how it looks – to put the content more into the center of the platform and make it much more visible. And for this iteration, we will also be a lot more open to other creators, and not only music.

DC: Do you have a sense of what types of creators you're going to start opening up to?

MF: Most creators are somewhat associated with the music industry, but the type of content they will share will be quite different. We have some that will host podcasts on the platform. We will have artists who are doing a lot more video assets which will also be quite cool. 

And also the way we've gotta display it is gonna be a bigger campaign later in January. As a hint, the way we are gonna display the content itself is gonna be at the core of the platform, so it's not gonna look like a marketplace as such, which I think is really hard to navigate. It's more putting the initial idea of LimeWire back into the new product, where, in my opinion, it's always about discovering new stuff, new music, new contents, new creators. And that new platform will be LimeWire 2.0.