The threat of recording industry lawsuits has certainly given pause to peer-to-peer music file-sharing services. Few have dared show their servers on U.S. soil since the Supreme Court in 2005 ruled Grokster and Morpheus could be sued, declaring open season on companies that enable users to swap copyrighted files. On Oct. 30, even News Corp.’s (NWS) MySpace—a social-networking site known for allowing all manner of freedoms—cracked down on the use of copyrighted music, licensing technology from Gracenote that allows the site to review and block songs uploaded to the site.
But the practice of what the recording industry considers illegal music downloading is alive and thriving, thanks to lax copyright protections abroad and the experience of a generation that grew up swapping songs over superfast Internet connections. And lately it’s finding a new lifeline: a business model.”
This year, 300 million to 500 million files were pirated each day, according to Artistdirect, a New York company that tracks illegal downloads through its MediaDefender service, and in some cases, attempts to block them. “The user base has been chased around the Internet because the companies keep getting shut down…but this is a really stubborn, persistent phenomenon,” says Eric Garland, CEO of BigChampagne, an online media measurement firm
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