P2P Business As Usual

[apcmiller]

The statistics bandied around by the recording industries belie the fact that not only is P2P well and thriving, as reported in Slyck, but that the numbers seem certain to continue to increase at an exponential rate over the next few years. How successful have the copyright enforcers been in their campaign to kill off P2P? Slyck explores the facts underlying the fear campaign being disseminated by the recording industries. 

People who use P2P – file-sharers - form part of a thriving and growing community, fuelled by high prices, increasing social acceptance and a certain thrill at being able to get for nothing what other people have to pay dearly for. No longer viewed as shady undesirables, trading in pedophilia to fund drug operations and prostitution, the public are starting to see P2P users for what they are, ordinary people. And whilst a few of their number have admittedly paid a relatively high price for that pastime, the recording industry has achieved little in deterring those seeking simply what they want from the internet for free.

Taking account of figures produced by analytical experts such as Cachelogic and Big Champagne, around 60% of the available bandwidth of the Internet is used by file-sharers. This leaves less than 40% of the remaining bandwidth for browsing, emails, electronic transactions and the plethora of other uses that the Internet is put to. Given that the Internet is only available to around 15% of the world’s population at the present time, the continued growth of the Internet, not too mention the economic growth it spurs, result in its being viewed as far more important to the global economy than the stagnating recording industry.

The IFPI, the international voice of the collective recording industry representatives, have issued figures that show that 15,597 filesharers have been served with financial demands for copyright infringement in the US since September 2003. Their figures, drawn from a BBC article, infer that these have been a result of civil lawsuits. This is at odds with the facts, for not one contested suit has been won against anyone file-sharing for domestic purposes, only arguments about who is actually liable. More significantly, no suits have ever been issued in respect of anyone downloading only.

Arguably, a handful of cases have been heard in the USA that involve personal file-sharing, Santangelo, Leadbetter, Chan and Gonzalez, being the names that spring to mind. However, none of these have actually been contested on the basis of file-sharing, simply on the issue of liability. Despite the RIAA spin put on the Gonzalez case, she was not sued for downloading files but simply for distributing 30 of those files, which where in turn downloaded from her by MGM. If she hadn’t been file-haring, she would never have been sued. To this present day there has still not been a single precedent established against those who only download for personal use.

The figures published by the RIAA & MPAA don’t bear analysis, either. In the same breath that they tell us that 15,597 file-sharers have been served with financial demands for copyright infringement in the US, they tell us that there have only been 3,590 settlements. In other words, they have received a financial settlement in only 23.3% of cases. So, if the rest of them, all 12,007 cases, haven’t been taken to court and they haven’t settled, what exactly has happened to them? Statistically it seems that 76.7% of those caught in the USA just walked away. These are not statistics that the recording industries want people to hear.

The odds of being identified and having to settle are therefore of the order of 3,590:60 million, or 16,713 to 1 against. The odds against being taken to court for downloading are therefore an even more staggering 60 million to 1 against. Put into context, people have a 1 in 300 chance of being misprescribed in hospital or a 10 million to 1 chance of being involved in an aircraft collision and dying as a consequence.

In most (if not all) countries, domestic file-sharing continues to be a civil and not a criminal issue. In general terms, uploading or sharing can result in civil action, albeit that the odds are very small. Technically the same could arguably apply to those downloading only. In practical terms, nobody has yet been sued for downloading only, and the prospects of such a case being successful are less than diminutive. In the UK, the prospects of such an action are currently nil, given that the BPI have confirmed they have no intentions of taking such action.

Users of the FastTrack network (Kazaa users in particular, who have accounted for around 94% of those who have received demands for settlement) are migrating to other, safer networks. If the statistics bandied around by the RIAA are to be believed, Kazaa users have certainly shown themselves amongst the most prolific sharers of all, and should therefore be particularly welcome to the P2P community.

A report issued by Napster claims that a substantial increase in sales is being generated by people replacing music that has been lost to them over the years as well as those buying a second time so that they have their music in a more convenient format. The report concludes that people are replacing around 30% of their existing record collections, and many people naturally feel quite aggrieved at being expected to pay twice for the same recording. In addition to this the predicted 37 million new iPod users that Apple predicts will be using their products in the next 12 months and doubtless swell the ranks of those who not only download, but share their files. If Apple takes away the ability to use DRM free MP3 format files, concentrating their market on their proprietary AAC format, their products will undoubtedly lose much of their market appeal. Creative, arguably the inventor of the original portable MP3 player, are conservatively predicting 8 million new buyers of their own MP3 players over the same period. These figures will certainly increase once other mainstream consumer goods manufacturers come on line, such as Philips, Hitachi, Panasonic, Sanyo, Akai, etc.

To spur further growth, many artists are now leaking music to the file-sharing fraternity as part of a cynical marketing strategy, using P2P in the way radio was used over the years. A new brand of independents is starting to emerge, bands that shun the traditional recording contract approach and set out to make their marks before signing with the giants. For example, British band Kaiser Chiefs concede that they leaked material on file-sharing networks to bolster presales of their “I predict a riot” track and subsequent album. The Arctic Monkeys launched on the Internet, driving them to number one chart success. System of a Down have reportedly given up issuing presale releases in the knowledge that their albums are available to file-sharers long before the official release date. In addition, few can doubt that both Madonna and The Darkness, have shamelessly exploited file-sharing networks to bolster pre sales hype. Ironically, they are helping to publicize the availability of free music and attracting new members to our community.

The Grokster case was thought by many to signify the beginning of the end for file-sharing, as the “fair use” defense was unsuccessful. BigChampagne instead tells us that the growth has been unabated, with file-sharing doubling over the past two years. Only this week consumer researchers NPD Group claimed illegal downloads have fallen 11 per cent since the Supreme Court ruled in June that Grokster and other P2P companies were operating illegal businesses. However Eric Garland, CEO of established media experts BigChampagne, promptly disputed those figures.

"BigChampagne's aggregate data show that the period following the Grokster ruling represents a record high," Eric said in an email to Slyck.com. "In fact, in every month since Grokster (June), P2P activity is actually higher than it was in May/June, or at any previous point on the timeline."

Full details from BigChampagne are available in yesterday’s news article.

The future of P2P remains in the balance, although it seems the P2P fraternity is making far more ground than the recording industry. As P2P users approach critical mass, believed to be around 100m, perhaps the recording industries will step back and consider that they have seen this all before when they believed the combination of FM stereo radio and the cassette would signify the end of their world back in the 80s. Yet it inspired an unprecedented growth in music sales, much the same as the VCR did for the movie industry less than a decade later. Surely the lessons learned then should be equally applicable today?

One thing that is certain, the fear, uncertainty, and doubt caused by a handful of generally irrelevant cases against poorly represented members of the general public will do little to stem the rising tide of P2P in the mid & longer term, let alone attract any sympathy for the recording industry. The recording industries will have to live with the fact that file-sharing is simply not going to go away, and that they will have to adapt to survive. The message to file-sharers for the New Year is best summed up business as usual, but don’t get careless.

Slyck News

[Nemesis]

yet it inspired an unprecedented growth in music sales

What alot of people will do is download a single and say "I really like this song" and buy the CD, that is what I end up doing some of the time (only if it is REALLY good though).

others just dont have the resources to find full albums available for download (people who dont know about BT or others) and dont have the patients to download songs seperatley.