filesharing and the birth of the digital music industry liisa benmergui dap02s october 28, 2004
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Filesharing and the birth of the digital music industry
Liisa Benmergui
DAP02S
October 28, 2004
Seminar Goals
Discuss peer-to-peer networksHistory: Past events in digital music
distributionPresent state of online music industryVisions of the future
P2P : An overview
Definitions
What is P2P?“Generally, a peer-to-peer (or P2P) computer
network is any network that does not rely on dedicated servers for communication but instead mostly uses direct connections between clients (peers). A pure peer-to-peer network does not have the notion of clients or servers, but only equal peer nodes that simultaneously function as both "clients" and "servers" to the other nodes on the network.”
- From Wikipedia, the free encyclopedia
Important p2p terms
ClientServerServent
Centralised networks
Decentralised networks
Decentralised networks
Hybrid networks
P2P categories
First Generation: Napster
Centralized, infringed copyright laws Second Generation:
Gnutella/FastTrack Decentralized “true peer-to-peer networks” harder to pursue legally
Third Generation: Freenet
Built upon generation 1 and 2 technology Anonymous networks
History and events in p2p network activity
Where did it all begin?
1999 Napster is launched by college drop-out Sean Fanning
Felt there was a need to create a common, “easy-to-use” forum dedicated to sharing music files, namely .mp3 format
In December, RIAA filed a class action suit against Napster. This gave Napster a great deal of publicity, and millions of users
flocked to the service. 2000
In March, Nullsoft unofficially releases Gnutella first client was developed by Justin Frankel and Tom Pepper of
Nullsoft, a division of AOL Shortly after release AOL decides to stop project Gnutella project continued via reverse-engineering
Historical milestones continued
2001 Limewire, main developer of Gnutella-based technology
is released as open source In February, Napster use peaked with 13.6 million users
(source: comScore Media Metrix) Napster ordered to pay 26 million USD in copyright
infringement case
2002 Saw the rise of p2p networks and software development
2003 – 2004 Lawsuits filed against networks, as well as, individuals
Who is against p2p and why?
RIAA: Recording Industry Association of America The “BIG 4”
EMI Sony-BMG Universal Music Warner
MPAA: Motion Picture Association of America
Reasons
Copyright infringement by p2p networksCopyright infringement by individual clientsLack of royalty payments
Reactions
Lawsuits against centralized networksSeptember 2003 RIAA files lawsuits
against individual clientsLobbying for right to outlaw p2p networksLobbying for rights to break into personal
computers, if there is a suspicion of illegal activity
Is filesharing illegal?
No, sharing files is not illegal, if a person has received permission from the files’ creator(s)
Filesharing in theory is based on the fundamental idea of sharing, but it has received a lot of bad publicity due to filesharing network “misuse” by individuals
The birth of online music stores
One person’s misery is another person’s success After Napster, “downloading” became a
household term The profile of the downloader has evolved into
distinct categories Apple was one of the first larger companies to
back this idea and revolutionize the music industry as we know it By cutting deals with the artists themselves, Steve Jobs
revamped the digital music scene
Legal online alternatives: an even shorter history2003
May: iTunes Music store launched in USA Consists of iTunes software Compatible with PC and MAC
October: Roxio’s Napster 2.0 launched in USA
Familiar name, different functionality
The beat goes on
2004 June
iTunes Music store launched in UK
September MSN Music Store
• No software download Virgin online music store
• Beta version of software available
Why buy music if you can get it for free?
Factors
Security issues Consumers are not interested in spyware, pop
ads, or viruses Trusted brands have evolved in this domain
guaranteeing consumers protectionEase-of-use
The publicity showered on p2p networks arguably raised awareness as to how easy it can be to search and download songs off the Internet
Portable MP3, WMA, AAC players have evolved Smaller, lighter, easier to use than ever before
Average consumer will choose price over quality of the music
What is the impact of filesharing on the music industry?
RIAA claims that album sales have gone down
Recent research has shown that filesharing is not a true threat to album sales Clients that are sharing music online are not the
target group of album marketing
Contradicting research: who is right?
Visions of the future
Factors that will affect media distribution Broadband connections will facilitate downloads Rethinking of the strategies to combat illegal
copying Demand for better quality downloads
Conclusion
Filesharing has existed among smaller groups years before Napster came along
Are lawsuits the true answer to this new problem? The fact remains: Peer-to-peer networks do not
seem to be disappearing, on the contrary, clients are on the rise
Businesses must adapt, not deny