July 4, 2005 — The music industry has been telling us for years that peer-to-peer (P2P) file sharing is a bad thing. But a New York company has decided the record labels had it wrong and that it merely needed to harness P2P’s power.
Wurld Media announced last week that Peer Impact, its P2P online digital download service, has now signed agreements with all four major labels: Sony BMG, Universal Music Group, Warner Music Group, and most recently, EMI Music.
Instead of itself redistributing music, Wurld says that Peer Impact offers a viable peer-to-peer alternative to unauthorized services and allows members to act as “paid redistributors” of authorized music content. The company says that the Peer Impact service allows consumers to purchase music and then earn money by sharing their music with others.
Currently in beta testing, Peer Impact says it will launch with a large catalog of “pristine industry inventory, not filtered or commingled with unprotected content, spyware, viruses, or pornography.” Wurld adds that its recent agreement with EMI will make the music company’s repertoire of catalog and current artists’ music available for purchase through the Peer Impact service.
Peer Impact says it is also negotiating partnerships with independent music labels, video game publishers, and motion picture studios, with the goal of offering “the most complete and diverse catalog of content for its members.” Wurld’s Greg Kerber explains, “Peer Impact isn’t just a network where you spend money, it’s a network where you can earn cash to buy more music, and the catalog is growing daily.”
What remains to be seen is whether this type of distribution has the right incentives built in to allow it to thrive. Wurld says its approach is based on the idea that “consumers form the backbone of the fulfillment aspect of Peer Impact.” According to the company, members who leave their computers on, and become a source for fulfillment when others purchase a file, are given credit for the sale and can use their credits towards future purchases through Peer Impact.
EMI’s Ted Cohen adds that his company sees Peer Impact as “the first of what we hope will be many legitimized P2P services.”
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