An industry association tries to rally users to legitimize and commercialize peer-to-peer networks.
Despite legal victories by record labels and trade associations, the growth of peer-to-peer networks continues unabated. BitTorrent and versions of eDonkey remain destinations where people can trade files and get music and video content for free.
DCIA has a charter to help tech companies find the business model to legitimatize and commercialize P2P networks, said Marty Lafferty, DCIA CEO during a panel discussion on P2P. P2P gives musicians a marketing tool and strong promotional platform. Executives said artists can put a hot track on the Internet and push millions of downloads in one week.
The numbers of users and daily downloads on P2P sites are staggering. For example, "The Open Door" album by Evanescence was downloaded on BitTorrent 25,000 times in one day.
"We estimate there are 6 million users on BitTorrent at any one time, triple from about a year ago," said John Desmond, vice president of MediaSentry Services at SafeNet Inc., which provides encryption technologies to protect intellectual property. "You're also seeing a shift to open source and that would explain the rise in BitTorrent."
eDonkey was shut down, but the network lives on and continues to grow because there are so many variations of the client, such as eMule, said Michael Weiss, CEO at StreamCast Networks Inc., the parent company of file-sharing network Morpheus.
The average consumer doesn't know about BitTorrent, eMule and others, or how they work, which is good news for the recording and movie industry, experts said. Lucky, too, for those in the space who are trying to clean up P2P image, others agreed.
Companies need to re-script the message by collectively pulling resources and making it a priority, Daniel Harris, president at MediaPass Network LLC, said in an interview.
"That will come with the next generation of profitable businesses using peer-to-peer technology," he said. "The networks can distribute music securely. It's called permission-based digital rights management. There are tools to circumvent that, but for the most part they will allow you to protect the content."
Rights holders have the ability to put the files on the network and distribute them securely. Harris said not all in the music industry are taking advantage of the distribution model out of fear, lack of control, and being unfamiliar with available tools to protect content.
The industry needs to work toward establishing a certification or permission-based authentication system for approved file sharing that interoperable with many platforms. The site also would need to provide free content, but give copyright holders a way to subsidize content distribution with advertising to get paid.
But the challenge remains with people continuing to distribute pirated works on P2P networks connected by the millions of computers running client applications.
And there's a good possibility file sharing could return to favor. According to a BusinessWeek article, Skype co-founders Janus Friis and Niklas Zennstrom are preparing to unveil their latest venture in beta, a video Web site known as The Venice Project that combines professionally produced TV and video with the interactive tools on the Web.
Consumers will have an option to access streamed content through a secure P2P network, sharing playlists with friends.
Friis and Zennstrom are known for once alienating music labels by creating the Kazaa file-sharing platform prior to founding Skype. The platform faced many lawsuits from the recording industry, which called Kazaa a tool for intellectual property piracy.
That's the stigma the DCIA will attempt to change.
The Business of Going DigitalDigital business isn't about changing code; it's about changing what legacy sales, distribution, customer service, and product groups do in the new digital age. It's about bringing big data analytics, mobile, social, marketing automation, cloud computing, and the app economy together to launch new products and services. We're seeing new titles in this digital revolution, new responsibilities, new business models, and major shifts in technology spending.