RapidShare Plans to Close Shop, But Will It Rebrand Instead?

ZURICH — Yesterday’s news that RapidShare would be closing its file-locker services has some scratching their heads, with some even considering that its operators will just rebrand and continue on.

Peter Phinney of Piracy Stops Here, which provides adult entertainment sites and studios with DMCA reporting and digital fingerprinting services, is one who articulates skepticism that RapidShare’s operators are fully closing up shop.

“New file-sharing sites seem to pop up almost weekly, and it's very unlikely that the powerful individuals behind RapidShare will simply retire and work on their golf games,” Phinney told XBIZ.

“Look for these shady characters to reinvent themselves as two or more ‘improved’ file-sharing sites, which might already exist and begin to jockey for a growing portion of this still very lucrative illicit market share.”

RapidShare, of course, has been a pain for the adult entertainment industry over the actions of its users who have poached and traded videos, compromising nearly every porn company’s bottom line.

The service was one of the first and most popular one-click file-hosting services but after implementing measures to stem piracy, RapidShare took a hit.

After five years of legal troubles over posting copyrighted material, both porn and mainstream, RapidShare rebranded itself as a personal cloud service.

The rebrand may have partly satisfied antipiracy companies and plaintiffs attorneys, but RapidShare's visitor count took a nosedive and its employee count reportedly shrunk from 60 to just three.

“Their revenue share has undoubtedly been falling precipitously in recent months as pirates turn to more aggressive venues,” Phinney said. “What will be interesting to see is what happens to the forces behind RapidShare next month when they officially close their doors." 

Phinney noted that RapidShare had been disorganized administratively, and “extremely inconsistent” in their compliance with the DMCA. 

“For years we have been pushing RapidShare to consistently enforce a repeat infringer policy,” he said. “Sometimes they did and sometimes they didn't — depending largely on what individual on their abuse team received a particular request and supporting evidence. 

“That combination of administrative disorganization and uneven application of use standards, taken with their slow response time and slipping popularity among pirates put RapidShare near the top 10 of our most egregious file-sharing sites in 2012. But in 2013 they didn't even make the top 25.”

Adult industry attorney Mark Randazza of Randazza Legal Group in Las Vegas told XBIZ that there are numerous fundamental problems with business models of file-sharing lockers like RapidShare — including that operators have to act like outlaws.

“Well, it looks like most file lockers have been illegitimate, and payment processors have not been willing to do business with them,” Randazza told XBIZ. “If you run one profitably, you pretty much have to run it illegally. There might be a legitimate business model for them, but I am not yet aware of one.”  

RapidShare officials did not respond to XBIZ queries on the company’s next step, and the service hasn’t given a hint on what’s ahead on their Facebook and Twitter pages.