If United States officials thought that no one in the tiny island nation of Antigua and Barbuda would take advantage of the World Trade Organization’s ruling in favor of that country in a dispute over online gambling, they’ll have to think again. A St. Johns, Antigua startup firm called ZookZ (zookz.com) has announced plans to capitalize on the 2007 WTO ruling and offer a subscription-based model for unlimited monthly music and movie downloads. The creation of ZookZ, according to the company's principals, was made possible by the 2007 WTO ruling that awarded Antigua $21 million annually in the form of abrogated rights to US-produced entertainment, meaning Antiguan firms can copy and sell -– free of charge -– up to $21 million each year in entertainment properties otherwise licensed by American entertainment firms.
The impact that ZookZ’ entrance into the online music market and how that plays out within the greater arena of negotiations between the United States and other countries over online gambling remains to be seen. The United States’ massive entertainment industry remains its largest source of positive trade with other countries, and the WTO decision was originally viewed as a shot over the bow that hardline Bush Administration trade officials decided to ignore. (Update: Antiguan officials, led by WTO negotiations lead attorney Mark Mendel, have disavowed any official authorization of Zookz' offerings.)
The $21 million annual judgment rendered by the WTO concerned only one small segment of the online-gaming market (pari-mutuel wagering), and Antigua was among the smallest of the countries to file WTO complaints over the matter. China and the massive European Union bloc are among the countries and groups that could conceivably seek similar restitution at many times the value received by Antigua, even as the US, in the wake of its losing its final WTO appeals against Antigua, announced its intent to withdraw from the GATS trade commitments governing the online-gaming sector, including online poker. It is unknown if Obama trade officials will continue with the previous USTR (United States Trade Representative office) plan, though they have reopened trade talks with EU representatives in the matter.
As for ZookZ, its press releases claim that it was able to step into the market vacuum in part because its business model does not involve peer-to-peer (P2P) file sharing, the method of file transfer used by prominent online sites that has been the target of legal efforts by US entertainment companies defending their copyrights. Zookz launched on Wednesday, July 15 with a lineup of tens of thousands of music selections and movies, and promises to add 300 movies and 10,000 songs each week. The site also promoted its inclusion of various artists not available on sites such as iTunes, including the Beatles, AC/DC and Radiohead, and noted its complete selection of some 73 different Michael Jackson titles. A quick search of ZookZ showed some 70 Beatles albums already available, among them titles originally offered only in certain countries or without official release.
According to the international legal advisor for ZookZ, Dr. William Pepper, Esq., “The ruling [allowing the creation of ZookZ] is the result of a 2003 decision by the U.S. to ignore WTO regulations and block the rights of Antiguan companies from doing business with its American customers. The consequence has meant the loss of millions of dollars in revenue for the Antiguan economy and its business sector. Now Americans and Antiguans have the opportunity to benefit from this historic legal precedent, and should do so.”