sharman networks limited/kazaa
... to survive in the peer-to-peer sector but also to play an important role in entertainment industries. The celebration of the 11th March 2003 was of KMD’s millionth download, which secures Sharman’s position as the number one peer-to-peer software application in the world. The most downloaded, the largest number of users and the fastest growth. Indeed, in only seven months, the KMD number of copies download has been multiplied by two, which confirms its leader position. A Nielsen study dated of December 2002 also confirms this statement; during the time span of eight months the Kazaa market share has increased of 8.6%. The study also states that the country in Europe that has the strongest rate of market penetration is the Netherlands. In March 2002, on 66,948 visitors who were connected to music websites 17,222 were connected to peer-to-peer websites instead of major website which share only represents 1.48%. According to figures, we can maintain that this phenomenon considered as piracy act, believed to go continue, for 2005 the music swapping will reach 362 millions of euros. The fact that a whole generation is growing up with the notion that you do not have to pay for music obviously appeals. It is difficult to see why Internet users would want to pay for instance twenty euros for an album when they get it for next to nothing elsewhere. Nevertheless, peer-to-peer companies are confronted as Napster was two years ago to a huge barrier: the entertainment industry. Indeed, it is trying to control the trading of digital music or movies. But it is an unrealistic goal to try and control. The cost of controlling the swapping over the Internet would cost entertainment companies more money than what they are losing due to peer-to-peer business. But today the misdeal seems to be different. After explaining why and how recording and movies industries are managing a battle against Sharman Networks, we will analyze how the Motion Picture and Recording Industries might eventually lose the war. IMPACT ON ENTERTAINMENT INDUSTRIES . Kazaa like its predecessor, Napster, has made it possible to download quality audio or video from the Web very quickly causing it to become a worldwide record and video library for free and also an auditioning system for new musicians to develop an audience. But the main legal controversy involved with the swapping is that files are being traded around the Internet without the consent of songwriters, publisher or filmmaker. And it seems obvious, that the use of peer-to-peer technology does not for the most part, meet the requirements set by the Copyright law. A brief overview of copyright law shows that one of the first copyright laws was the Statute of Anne, enacted by the British Parliament in 1710. The first United States copyright statute, passed in 1790, required conditions such as registration, copyright notice, and renewal, as conditions for copyright protection. Moreover, Richard Caves in his book entitled Creative Industries: contracts between art and commerce, said: “if the song is free for the taking, the songwriter reaps no reward for her creative labors”. However, click-by-click, file-by-file, Kazaa has taken entertainment industry market shares. For instance, CD shipments in 2002 were down 9%, on top of a 6% decline in 2001. Moreover, a report by Internet services company estimates between 400,000 and 600,000 movies are swapped online every day. For years people wondered whether all this downloading would affect the entertainment industry’s bottom line, as regards to this figures we can clearly affirm that it is are losing profit. Thus, to protect its economic interests, entertainment industry has deployed various battles strategies including lobbying, litigation and the use of copy-protection technologies. Entertainment industry’s battle strategy can be considered as intense and mainly based on a Copyright war. First of all, to increase their power and their weight in front of that they consider as piracy acts, record companies decided assembling themselves in the form of association. So, in 1958 the Recording Industry Association of America (RI.A.A.), which represents most U.S record labels, was founded. Based on the same model and for the same raisons few years ago, the Motion Picture Association of America (M.P.A.A.) was created. So far, this strategy of lobbying has been very successful; indeed, entertainment industry won a lot of battles as the MP3.com’s purchase by Vivendi-Universal’s, the movie studio’s victory in the Corley litigation, the bankruptcy of Napster (and its acquisition by Bertelsmann), and the enactment of the Digital Millennium Copyright Act, which imposes civil and criminal liability for the circumvention of copy protection technologies. Those examples, show us how industry has had phenomenal success in lawsuits against companies operating file-sharing networks, forcing most of them into shutdown, sale or bankruptcy. And obviously, Kazaa is not sparred in this litigation strategy. Indeed, on 10 January 2003, the Californian District Court handed down a decision that ordered Sharman networks Limited to be joined as a defendant to litigation commenced in California by the R.I.A.A. and the M.P.A.A. This lawsuit demonstrates entertainment industry’s determination to eradicate everywhere peer-to-peer file –sharing networks. The final strategy the entertainment industry use is the deployment of copy-protection technology. By encrypting copyrighted works, the industry can prevent the general public from reproducing their products without authorization. After all, it takes a tremendous amount of skill and time for an ordinary user to crack the copy-protection technology. Nevertheless, this strategy would create a vicious cycle in which the entertainment industries and the hacker community are engaged is an endless copy-protection arms race. Instead of investing resources in devoting encryption technology or law pursuits, the industry would devote their resources to develop artists and improve products, because this strategy hurts artists, the industry and consumers. We can ask ourselves if record companies and movie studios are not losing the copyright use by fighting misdirected battles. Indeed, the entertainment industry is fighting battles everywhere, against legal scholars, college researchers, cryptographers, technology developers, hackers and ultimately consumers (recently pursuit against two Californian consumers). But nowadays, we can observe a shift. Indeed, on 28 April 2003, a Los Angeles court ruled that companies that make software, which allows surfers to swap music files over the net, are not doing anything illegal. It is the ...