It ain’t easy being MediaDefender: maligned, hated, hacked,
made fun of – in 2007, the blows just kept coming. The firm rose
to infamy with its video-downloading site MiiVi.com, which at the time was discovered
to be nothing more than a dragnet to catch pirates in the act. MediaDefender
CEO Randy Saaf quickly
denied those claims, and we, the internet masses, were content to let the
issue die.
A group of hackers calling themselves the MediaDefender-Defenders
was not, however, and September saw what I consider to be one of my favorite “OH S***!” moments of the year: massive data
leaks that spewed huge quantities of the company’s internal
network drive, e-mail
store and VOIP recordings all over the web. The e-mail archive, weighing in
at 678 megabytes, included an almost complete archive of the company’s internal
communications during the MiiVi debacle, as well as a copy of MiiVi’s preliminary
EULA.
Guess
what?
Unfortunately, the wrath against MediaDefender ended up
spilling over to its parent company, Artistdirect. When MediaDefender’s operations
were outed, the firm’s customer base took a dive, forcing
it to issue over $600,000 in compensation credits to its customers due to poor
performance, reports TorrentFreak. Worse,
Artistdirect’s SEC filings reveal that it sank more than $825,000 into
damage control, and that MediaDefender limped along on just four
clients as of November 2007.
With Artistdirect’s stock hovering at just above 50 cents – down
from $2.00 in July, $4.00 in April 2006, and numbers way higher around
2000 – desperate times call for desperate measures: the company reported
mid-February that it is now retaining the services of Salem Partners LLC, who
will assist in the “exploration of strategic alternatives,” including “restructuring
initiatives, a merger,” or even the “possible
sale of the company.”
That is a powerful blow indeed, dear readers.
Tempting as it may be to dance on what many hope is
MediaDefender’s grave, I cannot help but feel sorry for Artistdirect, who
originally paid $43 million to the company’s founders, Randy Saaf and Octavio
Herrera, for MediaDefender in 2005. Artistdirect's other endeavors – a handful of
music sites, including a music fashion store – seem eclipsed by the shadow that
MediaDefender sets; I wouldn’t be surprised if it is/was the
only thing keeping these other sites alive.
TorrentFreak
speculates that Saaf and Herrera may end up buying the company back, though probably
for a price nowhere near the original $43 million they received for it. Artistdirect
remains quiet, presumably while the men and women at Salem do their thing.