Warner Music Director Brings Interesting Conflict To Board Room

Posted by | June 20, 2011 | 25,973 views

Why is this man smiling? Warner Music board member Shelby Bonnie

A member of the Warner Music Group board of directors is about to become embroiled in a copyright infringement lawsuit against CNET and its owners CBS Interactive that could be extremely embarrassing for the music company and bring unwanted attention to the pending sale of WMG to investor Len Blavatnik.

Plaintiffs in the copyright infringement lawsuit Alki David v. CSB Interactive have pointed out that Shelby W. Bonnie held seats simultaneously on the boards of both CNET and Warner Music for two years. During this time Warner CEO Junior Bronfman was suing Limewire for copyright infringement and very publicly complaining about the huge monetary damage it had inflicted upon his company while at the same time having a sitting board member who was also serving as a director of the biggest distributor of Limewire software, more than 220 million copies in fact.

Bonnie, CEO of Whiskey Media, LLC, is also the founder, former CEO (March 2000 to October 2006) and Chairman of the Board of CNET. Bonnie resigned as CEO in 2006 under a cloud of suspicion involving the backdating of stock options, though he continued to serve as a director of CNET Networks until March 2007. Oddly, just last week the New York Post ran a story detailing how the Warner Music board lowered the vesting price for 1.6 million of Junior’s restricted shares the day before the announcement was made that WMG was up for sale, thus sending the stock price up 27% resulting in an additional $13.6 million for the prodigal Seagram son. Great timing.

During his tenure with CNET, Download.com, a CNET site, was the primary distributor of peer-to-peer software and profited greatly from file sharing’s popularity. On June 27, 2005, while Bonnie was still CEO of CNET, the US Supreme Court issued its decision in the MGM v. Grokster case, which laid out very strict guidelines for the marketing and distribution of p2p software with intent to infringe upon copyrighted material.

In November of 2005, just 4 months after the Grokster decision, Bonnie accepted an invitation to sit on the board of directors of the Warner Music Group, a position he still holds that carries an annual compensation of $160,000 per year, and is considered to be a reliable ally of Junior Bronfman. So for at least 2 years Shelby Bonnie was a director of both CNET and Warner Music Group, one company distributing over 95% of Limewire’s software (and over 98% of Kazaa’s software), enabling the theft of millions of dollars worth of the other company’s copyrights. Warner Music, of course, was a plaintiff in both the Limewire and Grokster cases. WMG CEO Junior Bronfman recently testified in the Limewire trial as to the extent of his company’s damages saying that LimeWire had a “devastating impact” on the industry.

The Blavatnik Boys (left to right) Larry, Moe and Curly

Warner Music was also a plaintiff and financial beneficiary in the thousands of lawsuits filed by the RIAA against private individuals for illegally downloading their music using Limewire (and other) software obtained directly from CNET.

The lawsuit, brought in May by billionaire entrepreneur Alki David, claims that artistic works of his and his co-plaintiffs were infringed upon because CNET distributed Limewire file-sharing software (among others) and was willfully encouraging and profiting from the distribution of p2p software that was used for illegal purposes. Not to mention the distribution of DRM-stripping software, which is a direct violation of the DMCA. The suit is clearly an attempt to widen the Grokster decision.

Alki David has accused CBS of hypocrisy. His theory is that because CBS owns CNET—which was the main distributor of the Limewire file-sharing software—CBS has made a major contribution to online piracy. (Limewire’s software has now been banned and the service was shut down by a court injunction). “The CBS Defendants’ business model has been so dependent upon P2P and file-sharing that entire pages of Download.com are designed to specifically list and categorize these software offerings,” says the complaint. “In fact, the CBS Defendants’ were well aware that these software applications were used overwhelmingly to infringe when they
first partnered with LimeWire and other P2P providers, but ignored it in exchange for a steady stream of income.”

While David originally floated the idea of a class-action lawsuit against CBS, his current suit has several named plaintiffs but is not seeking class-action status. That is about to change.

According to David, he is about to add thousands more copyrights to his lawsuit, having found many ebook publishers

Billionaire plaintiff Alki David

willing to sign on. He is actively seeking more plaintiffs and then attempt to have the suit classified as a class action. To that end, he has set up a web site where copyright owners who feel that their property has been infringed upon can register to join the lawsuit. The site also features a long video staring Alki David himself explaining the ins and outs of the action and offering solid evidence against CNET, including Cnet broadcasts featuring some of their reviewers and editors explaining how to use certain p2p software to download copyrighted recordings and films. David went on to tell me that he hopes to soon have over 10,000 copyrights added to the complaint.

In the meantime Shelby Bonnie finds himself in a somewhat awkward position and may have, in the words of Ricky Ricardo, “a lot of splainin to do”. At the very least it gives the appearance of shadiness, and let’s face it, Junior Bronfman is no stranger to corporate shenanigans, having been convicted by a French court earlier this year for insider trading of Vivendi stock. Bonnie is sort of like the spoiled son who gives a burglar the keys to rob his rich Dad’s mansion and then splits the haul with the thief. If you close your eyes real tight you can almost hear Claude Rains inhabiting Shelby Bonnie’s body saying “I’m shocked, shocked to find that gambling is going on in here.” No wonder Junior keeps getting all of those terrific performance bonuses.

David’s attorneys will surely depose Bonnie during the discovery process and several lawyers I spoke with said they had always wondered why the recording industry never went after Cnet in the aftermath of the Grokster ruling. Many legal experts I spoke with feel that the suit will be a tough sell, but who knows how many lawsuits could be born from this if Alki David prevails in his claims against CNET. As one attorney told me, “This is a great country. Anybody can sue anybody for anything.”

However CNET, which was acquired by CBS for $1.8 billion in cash in March of 2008, continues to distribute file-sharing software like “son of Limewire”, Frostwire, which was created by a small band of former Limewire software engineers.

Sources say that the Warner Music people have been very nervous that someone would publicly connect the dots of the Shelby Bonnie situation and bring them a great deal of agita.

Break out the Rolaids kids.

 

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5 Comments for “Warner Music Director Brings Interesting Conflict To Board Room”

  1. burnichon philippe

    Bonjour, j’aurais besoin d’un éditeur pour mon titre: pseudo “philippe moner:le manége a pompon ” en vidéo sur you tube .Après avoir vue des forains qui ont trés bien aimer ce titre et qui mon accorder de touner la vidéo.dans l’attente,je vous remerçie d’une réponse de votre part,pour l’instant c’est le seul titre qui prend de la vue bien que peut connus.

    Si je n’envoie pas a un directeur artistique ,c’est parce que je n’est pas de traducteur et que je n’ais pas cliquer le bon choix en ces cas la ,merci de faire suivre.

  2. @Robin Wolaner

    You are still involved with Skout? The company that was funded early on by Jarl Mohn the media “Luminary” that you speak of. That should be part of “Full Disclosure” since Jarl Mohn was CNET’s Chairman of the Board!

    I know that you adore Jarl Mohn, however he openly used his “Chairman” postion at CNET to promote his P2P Bittorrent File Sharing Software Azureus / Vuze
    http://www.silicontap.com/azureus_raises___m_for_p_p_network/s-0006542.html

    Just how many File Sharing Software downloads of LimeWire did Jarl Mohn Preside over as Chairman of CNET? 10 Million? 25 Million? 40 Million?

    How’s the Copyright Infringement Lawsuit in France Going against Jarl Mohn’s investment Azureus?
    http://gigaom.com/video/azureus-facing-lawsuit-in-france/

    And Robin, I’m Loving this Proud CNET Download.com offering “Zapshares”
    Read the Editor’s Review! Notice it is described SPECIFICALLY to protect against “CopyRight Infringement Lawsuits” when using such p2p offerings as LIMEWIRE and your Luminary “Jarl’s” Azureus Vuze!
    ( Notice the Lady Gaga Songs being downloaded from LIMEWIRE in the CNET published Screen Shot!)
    http://download.cnet.com/ZapShares/3000-2196_4-11346468.html

    Do all the Redpoint and Greycroft Institutional Investors know that they had invested millions in a P2P Bittorrent File Sharing Client? One that was perfectly capable to Pirate Media? Look what happened to Bertlesmann’s investment in Napster! How DID the courts find?

    http://www.niclawgrp.com/feature/4719/shareholder-liability-for-copyright-infringement.htm

    And Robin, I believe that you were at CNET in the early 2000′s, so you think that CNET reviews like this ( Link Below) were just fine then. Oh, don’t respond to this posting unless you respond to this link. Testing CNET’s File Sharing Software Time and Again against real KNOWN Copyrighted bands and Artists? Notice LIMEWIRE is right there! OF COURSE, live links to the software downloads! Well, they reported to YOU!

    http://reviews.cnet.com/4520-6450_7-5020828-1.html

    Remember the Famous MGM vs Grokster ruling?
    “We hold that one who “DISTRIBUTES” a “DEVICE” with the object of “PROMOTING” its use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infringement, is “LIABLE” for the resulting acts of infringement by third parties.” . . . . . . . Regardless of the device’s non-infringing uses.

    Oh Robin, regarding the Stock Backdating Scandal, Look at this Filing. Look at the graphs. Can you truly say that it was all a big mistake? and perfectly innocent? Notice the dates of the “Back Dating”! Could it be any more OBVIOUS?
    http://google.brand.edgar-online.com/EFX_dll/EDGARpro.dll?FetchFilingHTML1?ID=5992333&SessionID=UX-eHe-yRP2PZ47

    Robin, you were there at CNET in the old days of Kazaa, BearShare, Grokster, Aimster, etc. YOU STATED THAT DOWNLOAD.COM reported TO YOU! You remember how CNET and ZDNET reported on these file Sharing services being filled with Porn? Particularly “Child Porn”. CNET’s own writers reported it.
    Didn’t articles like this one bother you? KaZaa filed with Child Porn!
    http://www.zdnet.com/news/congress-targets-p2p-porn/128083

    In this comment, I previously mentioned the 2001 “File Sharing Smackdown Test” that CNET did (on several occassions) , but CNET failed to mention that the results returned tons of horrifying porn.

    But this Congressional Document shows that it couldn’t be missed!
    http://democrats.oversight.house.gov/images/stories/documents/20040817153928-98690.pdf

    Congress tried to stop it!
    http://www.zdnet.com/news/congress-mulls-new-p2p-porn-restrictions/128102

    Congress tries to ban kids from File Sharing
    http://www.zdnet.com/news/congress-threatens-p2p-networks-on-porn/143947

    Instead of banning the P2P software from underage downloaders, CNET writers belittled the situation!
    http://web.archive.org/web/20040711194630/http://www.cnet.com/4520-6450_7-5142741-1.html

    Robin, you were at CNET as THE EXECUTIVE VICE PRESIDENT until 2002. Isn’t that correct?
    http://news.cnet.com/Busy-day-for-tech-earnings-reports/2100-1001_3-204506.html
    Do you know exactly how many articles between CNET and ZDNET and FamilyPC there were describing all the rampant porn kids were stumbling upon?

    And the founder of “Parents Magazine”, EXECUTIVE VICE PRESIDENT of CNET did nothing to stop kids from downloading the P2P software? This never “Crossed your Mind?” You knew CNET had a virtual monopoly of the distribution of the p2p software such as KaZaa, Morpheus, BearShare the CNET download Buttons were embedded on their respective websites!

    I had heard that you attended the “Focus on Children Internet Summit in Washington, D.C”. My source might be incorrect. Please inform me if you were not there.

    Robin, Why is CNET specifically mentioned in this report called
    “Pimps and Predators on the Internet”
    http://www.uri.edu/artsci/wms/hughes/ppsi.htm

    “In December 1997, coinciding with the Focus on Children Internet Summit in Washington, D.C., CNET announced Snap Online service, a Web directory safe for children (http://www.snap.com). The Snap search engine was advertised as having no pornographic Web sites in its directory. In the press release, CNET said, “Snap Online does not accept any pornographic advertising, nor does it contain pornographic listings in its directory of more than 100,000 hand-selected Web sites.” CNET chairman Halsey

    “Minor touted Snap saying, “Parents now have a valuable resource at their fingertips to help safeguard their children from inappropriate materials.” Nine months later, in August 1998, CNET announced that Snap would be including pornographic Web sites in its directory, and admitted that pornographic sites could be found through Snap for sometime. Anyone searching for pornography on Snap would automatically be rolled over to the search engines Infoseek and Inktomi, which index pornography.”

    WOW! Shouldn’t CNET have warned Parents that they changed their minds on the Porn on the “Snap” search engine? Maybe they did. Give me the link. You WERE the Executive VICE PRESIDENT of CNET at the time.

    So, why was this reported at the time, oh FOUNDER of Parents Magazine?
    http://www.mediawhore.com/deathrace/snap/s010898d.htm

    “Robin Wolaner, a new VP at CNET, told the staff that she’s the first adult at CNET (unintentionally making Richard Hart feel like a kid again). She told the staff that Snap! has five months to get profitable or get axed.”

    I was told that you approved for porn be allowed on Snap. Was that True? No, you couldn’t have! Not the founder of Parents Magazine! It must be a lie! . . right?

    So Robin Wolander, famous for founding “Parent’s Magazine” as I recall. your Idol “Shelby Bonnie” went on to distribute over 324,000,000 downloads ( YES MILLIONS) of KaZaa. And CNET’s site’s terms of Service were anyone over 12 years old could join and download this software.

    Of course you didn’t even need to join or sign in to CNET to download software so 9 year olds could have been doing it.

    So my questions are;

    Do you think that Shelby Bonnie should have restricted the P2P software downloads to adults? Since they were jam packed with Child Porn as CNET and ZDNET actually reported as fact,? And Robin, didn’t you think that CNET should have stopped distributing it entirely because of rampant child porn?

    You were Exective Vice President of CNET during the “File Sharing Smackdown test (Example above), still live on CNET today. You feel that frequents tests like that were perfectly legal and draw no liability?

    Robin, you DID check out that link and look at those CNET Stock Backdating Charts, and I ask if you really think that absolutely nothing underhanded happened and “Shelby Bonnie” is still your innocent lamb?

    Do you feel that CNET’s choice to offer such software as Zapshares to protect users that download copyright infringing material from lawsuits by rights holders is perfectly legal? Particularly since your darling “Jarl’s” Azureus Vuze was specifically mentioned. And those “Lady Gaga Songs” do you support illegal File Sharing and Piracy?

    PS: CNET’s Download.com content was available CO-BRANDED through AOL Time Warner, famous for Child Safety with “Parental Controls”. (There’s that WARNER word again!) You did warn them all about the p2p porn didn’t you? And all the other CNET Co-Branded sites such as Netscape? MSN? iNBC? Excite? Alta Vista? and MANY OTHERS!

  3. Ms. Wolaner

    Your outrage over what you term to be my supposed “innuendo about the stock options” is misplaced and incorrect. I made no innuendo whatsoever. I merely stated fact and backed it up with a report from the Associated Press. I made no suggestion whatsoever as to Mr. Bonnie’s guilt or innocence, just plain stated fact. If this upsets you so much I suggest that you no longer read any news reports whatsoever.

  4. Robin Wolaner

    What crappy reporting. Full disclosure: I worked for Shelby Bonnie at CNET (yes, Download.com reported to me, make of that what you will), he was a director of my company, and I pretty much worship the guy. He would be appalled that I am responding to your article. I will leave the debunking of your “connect the dots” theory to others. But your innuendo about the stock options is beneath contempt. Per Fortune Magazine: “Almost a year later the SEC told the company it would not pursue a case against CNET or its officers. ‘It was the thing we had to do at the time,’ says Jarl Mohn, a media luminary and investor who served on CNET’s board when it decided Bonnie needed to leave. ‘But it is the one thing in my career I’m ashamed of.’”

  5. Bravo Wayne!

    Great article! But you are missing HALF of the Story! Please look at my Website, http://onecandleinthedark.blogspot.com
    AOL / Time Warner actually Distributed KaZaa and Limewire co-branded with CNET for years! And Warner made some 14 million dollars distributing such notorious software as Limewire KaZaa, Morpheus, AudioGalaxy BearShare.

    ( FYI : If anyone thinks that my Blog is NOT Fair Use, please consider That I have 400,000 Loyal fans on YouTube! And I will instantly file a counternotice! ) if you really want lots of people to see it, make me a YouTube martyr and file the DMCA notice.

    CNET actually published frequent File Sharing Tests to gauge the effectiveness of software downloads such as LimeWire at procuring copyrighted material. One of the CNET tests that included Limewire actually concluded with the phrase ” It’s as easy to find copyrighted material as it was in Napsters Hay Day, if you know what to use!

    CNET Editor’s frequently used known copyrighted artists bands such as Madonna Britney Spears, Metallica Johnny Cash and many more!

    CNET even offered a Free MP3 search engine right in their website Music Center! The searches used U2, Madonna and Britney Spears for years as preset searches! I contacted Bono’s incredulous agents already!

    Regarding the Joel Tenebaum RIAA Warner Music Group Case that was mentioned in an earlier comment, many of the claimed infringed songs were used as examples to download by CNET editors to encourage copyright infringement. On my blog you will see Beck’s Loser as an MP3 Search preset for example! That was specifically one of the Joel Tenenbaum Songs!

    I hope that Joel Tenebaum files a countersuit instantly that names Warner Music Group, CNET and Shelby Bonnie!

    Not to mention the Porn that File Sharing was Filled with. Congress had studies proving that file sharing software such as KaZaa was filled with porn, especially child porn, CNET published an article with the KaZaa owners claiming the porn was unstoppable!

    Cnet knew of this Porn, yet, CNET pushed this software on their Gamespot.com… … website for kids!
    CNET’s policy was for kids over 12 to use the site and downloads! But because you don’t need to sign in to download, who knows, 9 year olds could have been downloading it!

    CNET should have discontinued the distribution of this software a decade ago due to the well known fact that Kids Stumbling onto Porn. Innocent file names often were porn in disguise! Cnet even reported on the rampant porn and even mentioned it in some of the editors reviews. But choose dollars over Kids!

    Check out the website for Fair Use fully commented upon screen caps.

    Alki David now has over 30,000 pages of Evidence linking the history and phenomenon of Filing Sharing directly to CNET and oddly enough Warner Music Group as well!

    No one would have even known about this if Viacom had never filed the YouTube Appeal.

    I advise all readers to check out all of the screen shots and keeping asking yourself, ” “What was CNET’s Intention?”

    Remember MGM vs Grokster: “One who ” Distributes” a ” Device” with the object of promoting it’s use to infringe copyrights by clear expression or other affirmative acts to foster infringement is liable for the copyright infringement of third parties” regardless if the devices lawful uses!

    If CNET does not fit that ruling then nothing does!
    http://onecandleinthedark.blogspot.com

    And my YouTube Fans HATE Warner Music Group for what they did to YouTube and it’s users!

    (Don’t miss the AOL Time Warner Co-Branded Pages with Warner actually distributing and profiting from the distribution of Limewire and KaZaa!) And this is before WMG was spun off!

    Write More Wayne! I have tons of research if you need it!

    Mike Mozart
    Top Viewed YouTube Celebrity with over 100 Million Views and 400,000 YouTube Subscribers!

    No false take downs against fair use!

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