By Susan B. Shor E-Commerce Times
09/06/05 11:30 AM PT
"You're not going to stop people from writing code," said Michael Goodman, senior analyst with Yankee Group. "Unlicensed file sharing will migrate to these countries that don't care." He added that file-sharing networks will just use the model of offshore casinos, which operate in countries that don't prohibit them and whose owners also live in those countries.
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File-sharing network Kazaa must alter its software to try to stop illegal music sharing, a federal judge in Australia ruled yesterday, but one analyst said the ruling won't change peer-to-peer file-swapping at all.
"In the end it's about as relevant as anything else these industries have done. Trying to pin down file sharing is like grabbing sand slipping through your fingers," Michael Goodman, senior analyst with Yankee Group, told the E-Commerce Times. "Is [the ruling] the final nail in coffin for Kazaa? Who cares?"
"The court system and legislation can't keep up with technology. They're always fighting yesterday's battle," he added.
Users Have Moved On
Much of the music downloading that violates copyright laws now happens on BitTorrent and eDonkey, he said, adding that file-sharing networks will just use the model of offshore casinos, which operate in countries that don't prohibit them and whose owners also live in those countries.
"You're not going to stop people from writing code," he said. "Unlicensed file sharing will migrate to these countries that don't care."
Thirty record companies had joined together to file the lawsuit against Sydney, Australia-based Sharman Networks, which owns Kazaa. Sharman Chief Executive Nikki Hemming and Sharman software partner Altnet were also found guilty of copyright infringement and ordered by Judge Murray R. Wilcox to pay 90 percent of the record industry's costs for the lawsuit. Kazaa said in a brief statement that it will appeal the decision.
Similar US Ruling
In June, the U.S. Supreme Court ruled that file-sharing companies could be held liable for any copyright infringement that occurred over their networks. That case involved Grokster and StreamCast Networks' Morpheus.
Goodman said he has been arguing for years that both record labels and musicians should embrace file-sharing and create new business models around it, but from the Recording Industry Association of America's reaction to the decision, it is clear that that is a long way off.
"This decision reflects a growing, international chorus: those who promote theft can be held accountable no matter how they may attempt to escape responsibility," an RIAA statement said. "A corrupt business strategy of attempting to hide offshore is not off limits to the enforcement of rights by creators or law enforcement."
Kazaa's network operated from the island nation of Vanuatu off the Australian coast, but its executives lived in Sydney and Los Angeles, leaving them open to lawsuits in nations with laws against copyright infringement.
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The CEO of Playlouder, Paul Hitchman, said he is "confident" other music labels will sign similar arrangements soon with ISPs in America and Europe. He called the deal between his company and Sony BMG the "most important development in digital distribution since the invention of the MP3 format."
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Supreme Court Ruling Deals Blow to P2P Firms June 27, 2005
"The ruling is going to unleash a new era of legal uncertainty on America's innovators," Electronic Frontier Foundation (EFF) senior staff attorney Fred von Lohmann said. "By focusing on intent, the Supreme Court has opened the door for lawyers to sue to see the minutes of engineering meetings, the drafts of marketing plans and internal e-mails. That's an expensive proposition."
Music Swapping Moving Away from P2P March 25, 2005
The findings could have broad implications for the music industry, which has touted the rise of paid sites and the drop of P2P activity. The report says that about 36 million Americans, or 27 percent of U.S. Internet users, download music or video files from the Web and that half of them have found ways to swap their files without using legal sources or P2P networks.
Record Labels' Suit Against Kazaa Starts in Australia November 29, 2004
The trial is expected to last as long as three weeks. It began with attorneys for five major record labels -- Sony BMG, EMI and Warner Music among them -- arguing that Kazaa software is used by 100 million people worldwide and that as many as three billion music files change hands monthly.
Kazaa Pulls Skype Voice into P2P November 23, 2004
The telephony will be limited to computer-to-computer calls using the Kazaa P2P application, Skype and the Internet. The two technologies complement each other, analysts said, because VoIP is basically a form of P2P.
Feds Raid P2P Users, RIAA Pushes Lawsuits August 26, 2004
U.S. Attorney General John Ashcroft said the crackdown sent a message to "those who steal over the Internet," with Assistant Attorney General Christopher Wray adding the crackdown represented the first federal law enforcement action against "criminal copyright infringement using peer-to-peer networks."
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