The Prosecution:
By Garth Montgomery and Dan Warne
An APC investigation
“This is not a revolution of a new business model — it has always been described as theft”
This article is featured in APC May 2004 Back issues SubscribeAPC: How can copyright be protected and users enjoy peer-to-peer technologies at the same time?
Even before you consider the legitimate online music services, you can see from one look at the pirate peer-to-peer operations that copyright can be protected.
Unfortunately, the P2P pirates only protect copyright when it suits them. It should be no surprise that they are at their best when they are protecting their own copyright and don’t hesitate to sue anyone who takes theirs to conduct business without permission.
The legitimate online music services have already proved that they can deliver music just as well as anybody in the digital environment. They have shown that they can negotiate licences for the music so that current tracks are available, pay the owners of the work an appropriate amount, and manage the distribution of the music online [in a way] that is both safe for the artists and the customers.
The legitimate online music services are proving such effective competition against pirate operations that some pirates can’t wait to get a piece of the legitimate action. They will tell you their vision is for a time when copyright owners get paid.
It must only be a matter of time before consumers start to act on the obvious unfairness of those building big business from other people’s work and turn to the legitimate services for their product.
Despite the obvious contradiction on the P2P pirates’ position, they still want you to join their revolution, as if P2P is some magical musical utopia. In reality it is — at very best — peer-to-business-to-index-to-business-to-peer (P2B2I2B2P), and all the while the user has to bear any number of electronic tags (cookies). No consumer would go into a store which subjected them to this treatment. That’s why most people will tell you outright that they know the P2P pirates are not doing the right thing.
The obvious unfairness of peer-to-peer operations such as Kazaa is the taking of somebody’s work without permission, benefitting from it, and never paying for the work.
This is not a revolution of a new business model — it has always been described by a single word, “theft”. Most people must have wondered how the P2P model can survive, that industry never producing a track or developing an artist.
Let’s not mince words, the heartbeat of the success of pirate P2P operators such as Kazaa is the unauthorised trading of millions of MP3 recordings by system users. An operation like Kazaa could not exist financially without its illegal traffic.
Consumers can already enjoy the benefits of the legitimate online music market and it’s becoming increasingly difficult for the pirates to avoid explaining themselves honestly.
Michael Speck is general manager of Music Industry Piracy Investigations.
The Defence:
By Garth Montgomery and Dan Warne An APC investigation
“P2P technology will continue to shape the way entertainment is consumed”
What can Kazaa offer the record industry, and how can both make money from peer-to-peer?
It is ironic that in the two weeks after the Australian subsidiaries of the major record labels launched legal action against Sharman Networks — owner and distributor of Kazaa — two more independent record labels signed up through our business partner, Altnet, to license their catalogues for paid download. These companies are promoting and selling tracks ranging from Jimi Hendrix and James Brown through to the London Symphony Orchestra.
Why, as the major labels continue to litigate, do their independent counterparts actively license material? Simply because peer-to-peer (P2P) technology marks a new era of digital distribution that, with or without the major record labels, will continue to shape the way entertainment is consumed worldwide.
Two years ago Sharman Networks and its partner Altnet entered the P2P market with a blueprint for a complete end-to-end licensing solution. Our entire existence was based on the principle that rewards should be distributed to all stakeholders — artists, copyright holders, distributors and consumers.
Through Kazaa, every time an authorised, licenced file is downloaded and shared, the parties involved in creation and support are properly compensated. In total, licenced (copyright-protected) files, including music, games, films and software, are downloaded around 50 million times by more than 60 million Kazaa users each month.
For 18 months now, the major record labels have been presented with this licensing solution. They have rejected the opportunity to encrypt their music at source and distribute it securely through Kazaa. [These companies] continue to deliver music in a format that lacks any effective anti-copying technology, and now demand that applications such as Kazaa should somehow be able to mop up their mess online.
The major labels now consider music Web sites to be the Holy Grail of digital distribution. However, with rapid convergence of media, consumers today are looking for a much more immersing experience than audio downloads alone. With peer-to-peer, rich media content such as live concert videos, movies and games can be (and are) marketed to a global audience through one seamless shopfront at a tenth of the cost of serving from a Web site. Record companies can reconnect with the buying public by offering an incredibly compelling “carrot”, rather than continuing to alienate them with the litigation “stick”.
In the mid-’80s, the major movie companies tried to eliminate the VCR through litigation. Video later became its single biggest revenue stream. Now, in 2004, entertainment companies are trying to do the same to peer-to-peer [technology]. I firmly believe that history will repeat itself — to the benefit of everyone.
Nikki Hemming is the chief executive officer of Sharman Networks, owner and distributor of peer-to-peer program Kazaa.
Found by Janett999
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