According to a study released today by the market research company NPD Group, a market research group, it is. The company contends that since a federal judge ordered that the peer-to-peer site Limewire shut its doors in the fall of last year, that the peer-to-peer filesharing of music - both the number of files downloaded and the number of users of the P2P sites - has declined.

"LimeWire was so popular for music file trading, and for so long, that its closure has had a powerful and immediate effect on the number of people downloading music files from peer-to-peer services and curtailed the amount being swapped," says Russ Crupnick, NPD's entertainment industry analyst.

While the NPD statistics make the actions against LimeWire seem like a win for the music industry, but it's worth scrutinizing the argument closely. LimeWire was used by about 56% of those using P2P services, NPD reports, but that doesn't mean that those users simply stopped file-sharing. After all, while Limewire was shuttered, other P2P sites reported an increased usage.

Furthermore, over that same time period studied in the report - from 2007 to 2010 - a number of new options have become available for Internet users to get their music. Streaming and subscription services like Spotify and Pandora have changed the way that music is consumed online.

The NPD study was gathered from self-reported data, which also makes its findings a little difficult to say much about. But no matter the origin of the data here, it's a bit of a stretch to contend that LimeWire's closure means less piracy. Less file-sharing? Maybe. Less piracy? I'm not sure. Regardless of the accuracy, it's likely we'll see these statistics invoked by those that argue that going after P2P websites is a good move for the music industry.

The news wasn't good for LimeWire back in October when a U.S. District Court judge issued an injunction, forcing the P2P filesharing site to close down both the website and its client. And arguably, things went from bad to worse when a figure named MetaPirate took advantage of the open-source code for the client and recreated a Pirate Edition of LimeWire, causing both the RIAA as well as LimeWire to scramble to track him down. Those meddling kids.

The company had long indicated it planned to launch a music subscription service, but those plans now seem unlikely as well. Considering such a project would require licensing agreements with the very businesses that have sought to shut LimeWire down, that's not really a surprise. Once the world's most-installed filesharing application, this looks to really be the end of LimeWire.

And now both the RIAA and LimeWire are the trail of "MetaPirate," the person responsible for the Pirate Edition.

The court has now shut down the Pirate Edition site, something that "MetaPirate" will not be able to contest without revealing his identity. And the court has also ordered LimeWire to turn over a variety of documents by the end of today that might point to the person responsible. These include:

(i) a list of all current and former employees of the Defendant who, to Defendants' knowledge, have had possession or knowledge of the private key used to sign the LimeWire SIMPP file in the past year, and (ii) a list of all known LimeWire software developers, programmers, or other employees who, to Defendants' knowledge, would have been capable of excising the features that were removed from LimeWire 5.6 beta before it was redistributed as the LimeWire Pirate Edition.

When the Pirate Edition was released, LimeWire adjusted the announcement on the homepage of its now shuttered site to read that "all persons using the LimeWire software, name, or trademark in order to upload or download copyright works in any manner cease and desist from doing so." And while LimeWire feels the need to appear to be proactive in tracking down the pirated version, MetaPirate said in an interview with Ars Technica that his ability to recreate LimeWire is simply due to the filesharing software being open-source. When asked if MetaPirate was a former LimeWire employee, he responded, "I am an agent provocateur for the RIAA, and you can quote me on that."

A New York district judge last Tuesday issued a cease-and-desist order, demanding that LimeWire immediately close its doors. And while LimeWire has said it has plans to institute a redesigned service, based on legal and licensed music subscriptions, it seems like many of the site's users may have gone elsewhere for their torrents, rather than waiting for a revised version of what was once the most popular file-sharing app.

The exception is BearShare. Much like LimeWire, BearShare was once a Gnutella-based application. But in May 2006, BearShare was ordered to pay $30 million in settlement with the RIAA. Following that decision, BearShare altered its offerings via the Gnutella framework, limiting file-sharing. And its current iteration is, as the site proclaims "100% legal."

Despite these restrictions, BearShare has seen a 780% increase in US downloads since Tuesday. And it reports its daily US downloads went up from 8000 to 62,400. The company does not say, however, whether or not these new sers are actually paying for their downloads. (That is, I believe, what the RIAA believes will save all those poor suffering record labels.)

Even though the LimeWire alternatives have seen an influx of traffic over the past week, the fallout from last week's decision - and the still-to-come decision regarding the dollar figure attached to the judgement - remains to be seen as to how it will impact file-sharing services and users.

Judge Wood found earlier this year that Limewire had knowingly participated in copyright infringement "on a massive scale" after the RIAA, along with several major record labels, brought suit against the company. And while the RIAA wanted the site shut down then, Limewire was given a reprieve to build a new copyright-friendly technology.

The courts will next decide how much LimeWire will be assessed for the damages it has caused the record industry.

While shutting down LimeWire may be a blow to file-sharers, it seems likely that many LimeWire members will move to a new client rather than ceasing sharing altogether.

In March of this year, they launched an iTunes-esque music store. Now, according to the LA Times, LimeWire plans to add more social features to its service. Better late than never.

"Users will be able to create their own private file-sharing networks with friends and/or family members, with greater control over what gets shared with whom. In a recent interview, Kevin J. Bradshaw, Lime's chief operating officer, described it as the ability to create a 'personal publishing platform' that delivers photos to family members or homework assignments to students."

Clearly, the social features are less about being social and more about being anti-social. It doesn't take a huge intuitive leap to realize that this new feature set also offers the ability for users to step out of the larger sharing community and form trusted sharing networks with other users.

The question is: will these smaller networks truly protect users who are sharing the types of copyrighted content that draws the ire of the RIAA? Or will the desire to get the latest and greatest music and videos continue to expose these smaller networks to the same problems that have plagued the larger community?

Other P2P services have tried a variety of ways to avoid litigation. So far, at least as far as the "-sters" go - Napster, Grokster, and Aimster - none has met with a great deal of success.

With current economic conditions causing even the most successful companies to reduce expenditures, can LimeWire continue to fend off the legal eagles and make a success of its service? We'll just have to wait and see.

LimeWire Store

The site claims that they will be adding thousands more tracks per day, but the big question is: from where?

It wasn't that long ago that the RIAA went after LimeWire's P2P service, claiming "LimeWire has sat back and continued to reap profits on the backs of the music community." LimeWire countersued, claiming antitrust violations among other things, claims which the judge in the matter promptly dismissed.

And today, the RIAA case against LimeWire continues (Arista vs. LimeWire). The current status has fact depositions and expert reports as needing to be provided to the court by March 31st, 2008; rebuttal reports are to be provided by April 30th and expert depositions by May 31st. By the looks of it, this case will be ongoing for quite some time.

So where does LimeWire expect to get all the tracks from? It seems highly unlikely that the same industry that is still involved in a hot lawsuit against LimeWire's P2P software is going to hand over rights to songs that will soon be integrated with that very same P2P software.

Even Napster, which re-launched with support of the recording industry offering legit tunes, has yet to pull off a successful online store. As of January 2008, the company was showing a nearly $10 million loss in the most recent quarter, giving it only 18 months to until it will need another cash infusion or go bankrupt. (It's also a bad sign when the CFO resigns, as did Nand Gangwani in Dec. 2007).

So, LimeWire expects to not only do what Napster could not, but do so without the support of the record labels and while being sued? Who are they kidding?

My advice, stick with Amazon for your DRM-free tunes, but if you must sample LimeWire, at least forgo the subscription plan. Something tells me they aren't going to make it.