2004-07-12

Is p2p going legit?

Sometimes you just can't convince the company that you want to work with that you're the right company to do business with via traditional business methods; that's when many companies will resort to what I'll call The Backdoor Business Model.

This requires alot more effort on the part of the company pitching its business, but as I've seen over the years, it is an often times successful method.

First, you need to have your product, in this case p2p application that entails the distribution of music and movies over the internet. If its a new technology then it will require some substantially non-infringing uses and you will need to spend lots of time and money with lawyers and in the courts to have a ruling adjudicated in your favor.
U.S. District Court Judge Stephen Wilson ruled in favor of online file-sharing services Grokster and Morpheus, saying the two companies are not contributorily liable for copyright infringement by users of their service. MGM Studios v. Grokster, LTD. (April 25, 2003) [pdf]
Meaning that your target, here the MPAA, who has been unable to vanquish you from the marketplace, may be forced to deal with you -- especially if you have lots of users -- current estimates put forth by the MPAA indicate that 1/4 of internet (read broadband) users download movies.

Then what happens is that maybe they'll want to work out a licensing deal with you
One anti-piracy mechanism for studios involves working directly with P2P networks on payment programs for legitimate downloads ... Distributed Computing Industry Assn., members include Sharman Networks (owner of P2P network Kazaa), whose goal is to commercialize P2P for legitimate distribution, says it is in "very private discussions with some of the majors at the moment." [link]
unless congress eradicates your existence with a new law.

It will be interesting to see whether the MPAA pursues this licensing strategy which has the potential of legitimizing p2p, especially in light of the music industry's continued campaign to criminalize it. See also: Streamcast testifies before Congress that major labels are blacklisting peer-to-peer software companies and requests an investigation into the "anti-competitive conduct in restraint of trade by the music industry."

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