Kazaa To Pay Up, Go Straight

from the paying-their-way-to-irrelevance dept

Thu, Jul 27th 2006 8:27am — Carlo Longino

The owners of the Kazaa file-sharing network have settled with the music industry, agreeing to pay more than $100 million in damages to the world's four major record labels. The legal battle against Kazaa has been going on for some time, but Sharman Networks, the company behind it, has decided to pay up and go straight -- apparently now planning to become a seller of licensed content using its P2P system. While it would be nice to see some new models for buying and downloaded content emerge, the turn-P2P-into-something-legit path has been trodden before, with little success, whether it's been Napster (which abandoned P2P), Napster founder Sean Fanning's Snocap, or various efforts from labels or movie studios. The head of the IFPI, the international equivalent of the RIAA, says that Kazaa "hampered our industry's efforts to grow a legitimate digital business", implying that business will now begin to flourish. Well, if nothing else, the future of Kazaa will prove or disprove this common refrain: sure, Kazaa could go on to revolutionize the entertainment industry by delivering products people want, at reasonable prices, in a convenient way and without so many pointless restrictions. But given the entertainment industry's penchant for locking down content and business models, that seems pretty unlikely. What's more likely is that, in the continued absence of better legitimate services, Kazaa users will just move on to the next file-sharing system. It's not the availability of file-sharing systems that's holding the download business back, but rather the lack of attractive legitimate options.

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22 Comments

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Anonymous of Course, 27 Jul 2006 @ 8:34am

Bah!
What bunkum!

"hampered our industry's efforts to grow a legitimate digital business"

We all know the industry's efforts were to stifle anything
that didn't fit the present business model.

Hopefully Kazaa will be successful in this new endeavor
but I fully expect the music industry to try and torpedo it.
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Pirate, 27 Jul 2006 @ 8:37am

Agreed
The last couple sentences sum it up perfectly. People have no loyalty to Kazaa just like they didn't with Napster. People will move on to other P2P clients or make a turn into bit torrents which seem to be increasingly popular. Sorry RIAA, technology will beat you over and over again. It's time to get in the fetal position and recognize it.
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- Franssu, 27 Jul 2006 @ 1:12pm
  
  Re: Agreed
  It's time to get in foetal position and DIE !
  
  ...Tehn some clever people will find a way to make dumptrucks of money by selling music and movies through the tubes.
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Simon, 27 Jul 2006 @ 8:58am

Who gets the money?
After the lawyers cut, who's going to be given this cash? Will Kazaa tell the RIAA which artists material was downloaded and the appropriate royalties paid? My guess is no.
The artists need to understand that the RIAA is only about protecting itself and the millions it makes off of the backs of others. The RIAA realize that they are potentially redundant in the distribution of music as technology brings performers and artists closer together - they are terrified that their customers (both the consumer and the artist) are going to figure out that their existence adds nothing of value to the transaction.
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Brutal_Kanoodle, 27 Jul 2006 @ 9:52am

Bandwidth
If I am paying for something I don't want to waste my bandwidth uploading files. I expect to download the file in a timely manner (megabit*cough*cough) and be able to use it how I want just like if I were to buy a physical object except for the downloading part.
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Sanguine Dream, 27 Jul 2006 @ 10:02am

So..
it looks like the bullies win again. I wish there was some way to get an exact list of where that 100 million goes. How much of it will actually reach the pockets of the artists. If anything the artists whose music is being shared is the closet thing to a victim in this situation. I wish the RIAA couldn't just sue someone for downloading. It would be so nice if they had to prove exactly what songs from what artists were downloaded and only the acutally artist could sue. I'd have no problem settling with Phil Collins if I downloaded his music but screw paying some big suit exec that only sits in an office trying to sue people.
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- samson, 27 Jul 2006 @ 10:45am
  
  Just Curious
  Is there a business model that would attract you capitalist hating commies other than letting you download anything you want for free? These P2P sites are popular for one reason, stuff is free. It is the equivalent to opening the doors of a Blockbuster Video and just letting people loot it. I bet when they finally stopped giving people the stuff for free you guys would say, "There has to be a better business model that making people pay for things." There is a business model for people like you, but it does not work well. It is called Welfare. If you want something for nothing, no business model is going to work well for you.
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  - malhombre, 27 Jul 2006 @ 10:59am
    
    Re: Just Curious
    Ain't it the truth, brother...everyone is just outraged that the organization that these precious artists signed with, of their own accord, the same organization that spent megabucks promoting, manufacturing, distributing, managing, etc, etc, their product, should actually have the gall, the f*kng NERVE, to use legal recourse (oh, sorry, "gangster/thug tactics") to protect themselves despite the fact that they are entirely, totally, completely within their rights to do so (whether we like it or not). Ain't it just tough shit when ya can't get everything ya want fer free?
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  - Mike (profile), 27 Jul 2006 @ 11:16am
    
    Re: Just Curious
    Is there a business model that would attract you capitalist hating commies other than letting you download anything you want for free?
    
    I've never understood this line of reasoning. You claim that people who believe in free market economics (the economics that says price will get driven to marginal cost) are "capitalist hating." Meanwhile, you support a situation where the government regulates the market with barriers -- which seems a lot more like what most people think of as a "commie" gov't.
    
    It is the equivalent to opening the doors of a Blockbuster Video and just letting people loot it.
    
    This has been explained countless times. Copyright infringement and theft are two different things.
    
    There is a business model for people like you, but it does not work well. It is called Welfare. If you want something for nothing, no business model is going to work well for you.
    
    Right, that's why we've pointed out plenty of business models that involve giving away music for free.
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  - Anonymous Coward, 27 Jul 2006 @ 5:30pm
    
    Re: Just Curious
    amen
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Brian, 27 Jul 2006 @ 10:12am

at least torrents are popular
not that i've used Kazaa in years, ever since it became a virus-sharing P2P client and spam up the a$$, shitty quality music and video, mp3s that were not named or tagged correctly, and other crap that you would never really want anyways. Ares seems to be picking up the pace in the P2P world if you're looking for a single file, but the real way to go is with the torrents
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Dis_Grunt_Tell, 27 Jul 2006 @ 10:36am

Of course
Of course the big suits win, they always win, its a commen and all to familure math probblem. Big suit A + Famous Artist B = Cash C. Now Cash C + P2P D= HOLY CRAP WERE A SCARED BIG COMPANY E. Now Using all the math we now have EC / (devided by) D = A big screwed community at large.

Big suits will go faaaar out of their way to sink something that they think is "Scary" which often is something that, if used properly, can be a powerfull tool, and this isnt just limited to Music allll sorts of thingsa are ruined by big buisness, Heck, they're the ones trying to get the internet privtized(not sure I spelled that right) These jerks need to back off
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- AMP, 27 Jul 2006 @ 10:49am
  
  Re: Of course
  Well, at least the big suits can spell, or use spell check.
  
  RE: “...all sort of things are ruined by big business”. Maybe we shouldn’t forget that a lot of things are created and made possible by/because of bug business and the often maligned “big suits greed”. While the **AA’s efforts against file sharing technologies my be a bit misguided, I am not sure painting all big business with such broad brush strokes is the most open mined of approaches.
  
  Most things we use daily are created by big business with the singular goal of making more money.
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Anonymous Coward, 27 Jul 2006 @ 10:41am

Well, since the music industry's ran out of new, decent content.... I guess they are keeping their stockholders happy by suing everyone.

But where will the money come from once they've sued everyone they can?
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Nathan, 27 Jul 2006 @ 11:03am

open-source
Here's the reason the RIAA will never be able to stop p2p technologies: open-source. You can destroy the companies around the programs, but you can't destroy the source code. The industry is going to have to find a way to deal with p2p networks, because they aren't going anywhere.
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FCUK EXECs, 27 Jul 2006 @ 11:43am

alternative solutions
This is to people who commented about how righteous RIAA is and how evil and corrupted all the stealing hackers are..

Here is the alternative the Napster has offered:

"Napster reportedly offered the record labels $150 million per year for starters (plus $50 million per year to indies) for the right to continue to offer its practice of letting users trade unprotected MP3s with each other, albeit with a $10/month subscription fee. Napster's centralized servers would have provided a clear accounting method for paying artists their due (in fact, maybe that's why RIAA members prefer these settlements). "

So why didn't RIAA accept this idea, if it is obviously paying nice sums to record labels and artists? I'll tell you why. Because RIAA and all the middle man wouldn't get paid! Only artists would make money and consumers could purchase more music for less money. So it's obvious that lawsuits and monopoly are a better solution for the blood suckers. It always was that way and always will be.
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Brew, 27 Jul 2006 @ 12:01pm

The Solution
P2P's aren't going away, but a company in Russia has already found the solution! It's called AllofMP3. High quality digital content is sold for a reasonable price, making them multi-millions, while luring thousands if not millions of people like me away from free P2P's. Since I feel like I'm getting my money's worth at AllofMP3, I actually spend more on music a month now than I normally would under traditional models. At the end of the day, isn't that what the record company's care about? It's a win-win!

Most downloaders are generally honest people, but end up bending their moral stance because they cannot justify spending ridiculous amounts of money on music when an alternative exsists.

In my opinion, if the record companys form a similar US model, they will make gobs of money, look like the good guys, and virtually extinguish honest people's desire to download for free.
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- Sanguine Dream, 27 Jul 2006 @ 12:37pm
  
  Re: The Solution
  Most downloaders are generally honest people, but end up bending their moral stance because they cannot justify spending ridiculous amounts of money on music when an alternative exsists.
  
  I am a generally honest person, but I end up bending my moral stance because I cannot justify spending ridiculus amounts of money on music when the music sucks for the most part. Why should I pay $16.00 for an 18 track album when I will end up only liking about 4-5 songs?
  
  I've been meaning to check out AllofMP3(if I can that is). If the price is reasonable then I'll be glad to pay. I'd much rather pay for the 2-3 songs I like on Gorillaz "Demon Days" (I think that's what its called) album at $1 each than to pay almost $20 for the whole thing and not like it all.
  
  In my opinion, if the record companys form a similar US model, they will make gobs of money, look like the good guys, and virtually extinguish honest people's desire to download for free.
  
  Because as far as the big suts are concerned a US-like AllofMP3 would not increase revenues for them therefore its a bad idea. Sadly making more money is more important than being a hero in these dangerous digital days.
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  - malhombre, 27 Jul 2006 @ 2:42pm
    
    Re: Re: The Solution
    Sanguine said: I've been meaning to check out AllofMP3(if I can that is). If the price is reasonable then I'll be glad to pay. I'd much rather pay for the 2-3 songs I like on Gorillaz "Demon Days" (I think that's what its called) album at $1 each than to pay almost $20 for the whole thing and not like it all. Sanguine, at allofmp3 you can probably get the whole album for not much more than US$1 at the default 192k setting since they charge by bandwidth, not by the individual song or album...2-3 typical length songs is usually a chump-change transaction there. But they probably won't be around the US for much longer (surprise).
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Rufus, 27 Jul 2006 @ 9:31pm

WE HAVE A MORAL RESPONSIBILITY TO STEAL MUSIC
Rembmer, the music industry was on the front lines back in the 60s to destroy the Christian foundation of Western society. They have done that. Europe and America have been in a steep moral decline ever since. But we can fight them now using file sharing programs. It is our only way to fight them and it is our responsibility and duty to do so. We can hit them hard where it hurts, in the pocket book. They destroyed our way of life. Now we can pick at them with a million little downloads each day. It's revenge time!
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Mr Rat, 28 Jul 2006 @ 12:52am

Just what Kazaa was always after
This should not be considered a loss for Kazaa anymore than it should be considered a victory for RIAA/ARIA - Kazaa, even when it was in the Netherlands, was after one thing - a license !!!!! - Kazaa has just got what it wanted all along, if anything Kazaa should be sculling the champaign right now - it only took 'em 5 years but eventually the record labels caved into their "demands"........ of course I am not suggesting it will succeed - there will be a slight drop in file sharing for a short time but eventually people will just migrate. What did the IFPI estimate in its 2006 Priacy Report - 20 billion free downloads a year - yeah right like thats gonna change just cos they settled with Kazaa !!!! Good luck RIAA - you're gonna need it !
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Kaye, 27 Sep 2006 @ 2:40pm

Hate to say this....
I know you are all gonna hate me, but if they were allowing copywrited music to be downloaded, then...Big Business or not....What's theirs is theirs, and I pay for one of these services. YES I am a member of a P2P, love it and I download all the time, but if the songs were due a royalty; it's theirs.
However, those really old songs should not get as much monetary value as the newest stuff. I think if someone wants to share their music with you the knock off should not get as much of a compensation cause well, the person who shares it with you has already rented, bought, paid for it once. I mean if a friend borrows your car, and you wanta lend it to him or her... they don't charge you a royalty fee for this do they? Think maybe there is some missing technical information in the story like some illegal stuff..YA KNOW. STUFF and BUSTED? Yeah maybe
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