The Imps of File Sharing May Lose in Court, but They Are Winning in the Marketplace By TOM ZELLER Jr. http://www.nytimes.com/2005/07/04/technology/04link.html?pagewanted=print
NOT more than an hour after the Supreme Court ruled last week against a pair of file-sharing software companies, Hilary Rosen, the former head of the Recording Industry Association of America, had this to say on her Web log at The Huffington Post: "Wow. We won big. Unanimous. That doesn't happen very often," she wrote. "I was right. Winning is a big psychological lift." And yet, she was not sanguine about the future. "Knowing we were right legally really still isn't the same thing as being right in the real world," she wrote. Having arrived at the helm of the R.I.A.A. at precisely the moment in 1998 when revolutionary terms like MP3, Napster, and peer-to-peer were entering the popular lexicon, Ms. Rosen steered the recording industry's antipiracy battle tank. By the time she stepped down in 2003, Napster had been sued into oblivion, its successors, Grokster and StreamCast, appeared similarly fated, and lawsuits against individual file sharers were in the offing. Despite the music industry's legal victories against file sharing, Ms. Rosen wrote, the strategy has not earned the industry any more control over a marketplace forever changed by digital technology - "no matter how many times it was hoped it would." Among Internet technorati, her words brought groans of incredulity. "Why didn't she ever say any of this when she was actually in a position to make a difference?" wrote Michael Masnick, president and chief scribe at Techdirt.com, the blog connected to his technology consulting and corporate intelligence firm. "Instead, she walked the industry down deeper into a hole that is becoming increasingly difficult for them to climb out of." Even the most ardent supporters of Big Entertainment concede that, in the long run, copyright holders are no match for the ability of file-sharing technology to adapt, mutate, evolve and expand. In fairness to Ms. Rosen, it is a stark reality she noted early on. "As a practical matter going forward," she told Salon.com in early 2000, "lawsuits get a lot of headlines and they raise a lot of passion - I understand that. But ultimately the future of music on the Internet is not going to be about legalities and litigation, it's going to be about how are we bringing music to fans." Or, perhaps more accurately, it's about how fans are demanding that music be brought to them. "I have always thought that people were just putting their finger in the dam with litigation and other kinds of enforcement," Ms. Rosen said in a phone call last week. Indeed, almost from the moment in the late 1980's when researchers at the Fraunhofer Institute in Germany developed an audio compression technology that would become known as MP3, disruption of the music industry's equilibrium became inevitable. In the digital age, the music industry faces two basic choices - either make it too risky to upload and download copyrighted files (or to even create software that allows people to do so), or completely rethink the business. So far, the industry has relied on the former strategy. But each new court victory arrives years behind the next digital innovation, born in some college dorm where an abiding geekiness is the motivator and earning profits means little. However valid the industry's desire to protect its products, trying to stop file sharing has become a Sisyphean exercise. Consider the Freenet Project, which involves collective tweaking by participants around the world to develop an anonymous communication and file-sharing software. The Freenet Web site, freenet.sourceforge.net, suggests that copyright enforcement, which requires monitoring of online communications, is inconsistent with freedom of speech. "It is for this reason that Freenet, a system designed to protect freedom of speech, must prevent enforcement of copyright," the project says. Last week's Supreme Court decision "will have little or no effect on file sharing," said the project's founder, Ian Clarke, who is based in Edinburgh. American companies hoping to commercialize file sharing might find life more difficult, Mr. Clarke said, but companies based elsewhere, or anonymous software creators uninterested in profit, "will continue to work on new, faster, and more powerful file-sharing applications, for as long as there is a public demand." And in the borderless, largely ungovernable world of the Internet, it's that public demand that ultimately dictates the future. "It's not feasible to think this will be somehow hammered out as a compromise," said Eric Garland, chief executive of Big Champagne, a company that measures usage on peer-to-peer file-sharing networks. "It is the consumers' increasingly powerful position," he said, that will define the new marketplace. Along those lines, even the file-sharing company Mashboxx, which announced last week that it had entered a deal with Sony BMG to become "the first P2P authorized by a major label," might prove, at 99 cents per download, just a pit stop on the road to a day when music and film content flows freely over the Internet, as it does now in radio and television broadcasts over the airwaves. In Mr. Garland's vision, that might mean charging all users a flat media fee, paid through their Internet service providers, which in turn would pay the studios. In return, copyrighted media files would be unleashed for unrestricted swapping, sharing, sampling and saving - which is, after all, what millions of people all over the world are already doing. The problem, Mr. Garland said, is that even law-abiding citizens now expect to be able to exchange content freely on the Internet. "It really may one day have to become a utility," he said, "like water from a tap." So where does that leave the entertainment industry's victory in the Supreme Court last week? "While I think it has legal value," Ms. Rosen said, "it will be meaningless." You are a subscribed member of the infowarrior list. Visit www.infowarrior.org for list information or to unsubscribe. This message may be redistributed freely in its entirety. Any and all copyrights appearing in list messages are maintained by their respective owners.
