LegitMe Pitch

Do YOU want to disrupt the world of e-retail? Are you unafraid of Amazon, Apple, Hollywood, and every other powerful IP holder in the world?  OK!  here’s the plan:

NEED 1: CONVENIENCE. I, the LegitMe customer, used to be a pirate but as I get older and richer, I use torrents not to save money but time, and to get a better product. Software is quicker and easier to install via torrent, and DRM-free media is handy and quick, compared to regionlocks and other silliness of legit media. What I want is a way to legalize everything I’ve illegally downloaded on my pc, quick and simple.

SOLUTION:  LegitMe is a client and ASP, endorsed by an organization I totally trust, and that I install voluntarily.  When I run the client, it crawls all storage on all my personal devices, identifies illegally downloaded media (torrents, mainly). Once a year or so, it would invite me to buy all my downloads: “This computer, and WifePc, and Kidspc, together have 258 songs, 32 movies, and 6 apps that aren’t legal. To buy these all for $379, click here. To buy and/or delete certain ones, click here.”  I pay $379 to LegitMe’s paypal account, and I’m done (actually, not quite done – more on this later).

Once I’ve OKed it, the client send parts of that list to thousands of other clients using P2P.  After the data is sufficiently anonymized, the clients upload the list (no personally identifying information) to LegitMe’s servers.   The servers tally how many copies of each media are there, and contacts the rightful owner.   e.g. “Dear MGM: 6271 torrent owners have illegally downloaded “Full Metal Jacket” and have asked us to buy it for them under these terms [link]. Based sales history of similar titles (viewable here), and with an amnesty discount, we believe a fair price is $32,800 ($5.23 per copy).  To agree, click here to receive imeediate, cash payment.  If you do not accept this price or terms, feel free to counteroffer by contacting samWhoever@legitme.com.”


LegitMe doesn’t know and doesn’t promise the user is obeying the terms of the IP deal.  There is no “ownership receipt”.  Angry IP owners can subpoena LegitMe’s servers, but there’s nothing on them that would help identify users. It would be more useful to get torrent download sites, which at least have IP addresses associated with the torrent download.

LegitMe allows the users to set the terms, and forces IP Owners to negotiate on stupid ideas like Region Lock. It’s based on trust.  LegitMe allows honest users to “come clean,” out of the goodness of their hearts.  In their hearts, most people do want to be good.  They want to see indie artists rewarded.  Most even want James Cameron to get $10M to make Avatar 2.  LegitMe allows them to be good without being punished.  Two examples:
1) I’ll pay something for Windows XP, but not $100, and I’m not driving to Best Buy to get it!
2) Collectively negotiating terms could open exciting new business opportunities to indies (“Dear AngryTanks developer: 253 users are collectively offering you $32,393 to open source your entire game”) but would be more often used to counteroffer untenable terms in major IP Owners’ licensing agreements (“Dear MGM: Owners have authorized LegitMe to pay $0.37 more for each of your DVDs if they are not region-locked.”).

RISKS:  I can think of only three teensy little risks….

RISK 1. IP owners like Sony Music are known to be vicious,greedy sharks. Would they really negotiate with known pirates?

A.  They will have no choice.  A key hire for LegitMe would be a really excellent IP licensing negotiator.  At first LegitMe would only be able reach agreement with progressive, openminded IP owners (e.g. O’Reilly.com).  It would not even try to negotiate with larger entities; it would simply hold the money (with users’ permission) in escrow for a future date, while it continued to bring on more and more IP owners.  The money would be stacking up, over the years. If/when the escrow reached millions, LegitMe would fund a campaign to pressure the big boys, working on them via stockholders (they are legally obliged to make a profit), competitive pressure (progressive publishers would have a “pure profit” revenue stream), and political (good old campaign finance, seeking a “obligation to offer fair alternative” law).

If LegitMe works, eventually I (the user) might trust LegitMe enough to not go anonymous.  At that point, I can track my IP ownership across multiple devices, download higher quality versions of the content from IP owners, build a genuine relationship of trust with the IP owner directly.

In the eyes of the IP owners, LegitMe would work like a bricks-and-mortar retailer: buying IP in bulk, competing with Apple and Amazon.

2. Would enough users really trust this product not to rat them out?
This is the biggest risk, at this point. Certainly a few people will do it, but also certainly some people would never do it.  A realistic estimation of the market size would require some research.  Partnership or endorsement by a completely trustworthy entity would help.  The EFF springs to mind. Suggestions?

3 Is it possible for code to determine which media you had purchased, as opposed to legally downloaded or ripped content?
LegitMe would allow users to tag IP they bought legally (e.g. DVDs they ripped themselves), versus downloading.  LegitMe would see a very large (90% say) discount for media I bought and ripped, provided I share them only among devices I own.


Obviously it won’t be easy.   And also obviously, there’s a LOT of money in it, if it works. To me that’s a risk, not a goal.  Anything worth $100m gets greedy sharks circling.  We are not sharks.  We are wizards, changing the world with the power of pure ideas.  We must protect this from sharks – hence “social enterprise.”  This idea can rebalance the scales of IP ownership by letting normal people get rewarded for being honest.

To the investor, LegitMe is a disruptive new business model for e-retail that will beat Apple and Amazon three ways:

1) cost of doing business is massively lower – no ads, retail website, etc.
2) licensing terms are set by purchasers, not owners.
3) negotion leverage: IP owners can cut off Apple and Amazon if they wish.  They can’t do that with LegitMe.

Critiques? Suggestions?  I honestly don’t see how this can’t work.  Fire away!