Harnessing the Power of P2P, Looking Back

brajesh writes "It has been seven years since Napster, the first widely-used peer-to-peer music sharing service, was released, and it made a major impact on how people, used the Internet. NY Times has an article about Napster and how it quickly grew into an Internet phenomenon - not to mention the music industry's bête noire until it was shut down by the courts four years ago. The article also mentions Shawn Fanning, the creator of Napster and his new venture, along with other efforts like new version of Grokster, Apple's iTunes, trying to cope up with growing concerns of Copyright Violations and corresponding backlash against P2P file-sharing."

Comments

Napster never lost his case, justice did.

[k00110]

Actualy if Napsters had has many lawyers and money as the Majors "babels", they would be where iTunes is right now. The ways laws work should be changed so people with the most ressources don't get an advantage over those without.

Isn't it funny?

[MightyYar]

Everyone who used Napster thought it was the coolest thing that had happened to music in a long, long time. How messed up is our system when something that universally praised met it's demise?

Hmmmm

[Sv-Manowar]

It's amazing how napster and the other p2p programs have really revolutionized the internet, before home pc's were common I knew no-one who would have over maybe 50 CDs. Now when I talk to anyone, they have a full iPod and tons of songs. Instead of hounding the net, the music industry should be celebrating how it has helped people find new bands and new genres that they like.

Re:Hmmmm

[Jerry Coffin]

Instead of hounding the net, the music industry should be celebrating how it has helped people find new bands and new genres that they like.

This would only make sense if the music industry really wanted to serve their customers -- and based on their actions, that's quite apparently not the case at all.

First of all, I'm pretty sure that while the recording industry makes lots of noise about how much revenue they're losing due to P2P, they also have good enough financial analysts that when they're being honest with themselves, they realize that the real loss is essentially zero.

First of all, the ability to actually search and find what you want to a large extent makes the recording companies irrelevant. Until recently, bands fell into two discrete categories: those with recording contracts, and those without. Anybody without a contract remained essentially a nonentity. Many bands were quite willing to sign virtually any possible recording contract, because even if they realized it was horribly unfair, they still ended up far better off than without it.

Most of this derived from two things: distribution and promotion.

With P2P, both of those are largely nullified. The P2P network provides absolutely anybody with essentially instant, worldwide distribution. Likewise, searching means people can find what they really want instead of depending on the record company promotions to tell them what they want.

Now, it's true that the majority of what has been distributed over P2P networks has been material copyrighted by the record labels. Frankly, I doubt that's what they really cared about though -- what they cared about was the fact that if Napster (for example) had been allowed to survive for very long, there would have been a migration away from "their" music, and they would have faced utter irrelevancy.

For them, this isn't a matter of boosting sales by an extra few percent -- it's a matter of outright survival. They probably also realize that it's really a losing battle. As an industry they're currently providing no value, and despite attacks on their intelligence, they're smart enough to realize that if they provide no value, they'll die.

What they're doing right now is (I suspect) mostly a delaying tactic, trying to maintain some degree of relevance until they can figure out how to put themselves back onto the mainstream.

I suspect iTunes (and its ilk) will be a large part of that. Contrary to implication elsewhere, while iTunes is certainly a way for people to download music, it's most assuredly not a p2p network. iTunes is a perfectly average centralized network where you're downloading music from ITMS' servers. It's centralized and controlled in almost exactly the same way as traditional music publishing was. In fact, in the long run it probably creates a situation even MORE favorable to the recording industry.

With traditional brick and mortar distribution, the big distributors (Best Buy, Sam Goody's, etc.) had quite a bit of power over the recording companies. Most of this power derived from the fact that building thousands of record stores was expensive and difficult, so the supply of national distributors was fairly limited. The Internet and non-P2P record distribution like iTunes changes that: it takes virtually nothing to set up a reasonably usable international recording distribution network. ITMS is way out in front right now, but I'm pretty sure Apple realizes that there are thousands of other people with the capability and resources to put together a reasonably competitive offering in a matter of months.

This means ITMS has virtually not power when they bargain with the record labels. Previously the record labels probably had something like 80% control over the music stores. I'd guess with Yahoo! Music, ITMS, MP3.com, etc., they see a chance to have more like 95% control, and they like that idea a whole lot.

ITMS (for one) may seem a lot like Napster in a