July 19, 2004
Volume 5, Issue 6
File Sharing Still Soaring--Up 19%
By Diego Vasquez in Media Life
With recording industry sales on a recent upswing and the Recording Industry Association of America (RIAA) suing thousands of file swappers, the hope within the major labels dominating the music industry is that peer-to-peer (P2P) usage is diminishing.
But that is definitely not the case, according to new numbers released by BigChampagne, a company that tracks Internet file sharing.
Sure, recording industry sales are up about 6 percent over last year. But Big Champagne reports that at any given time in June about 8.3 million people were using P2P software programs such as Grokster or Kazaa. That's up 19 percent over the 6.8 million who were doing the same in June 2003.
Worldwide, Americans make up the highest percentage of P2P users; and it's not even close, says a report to be released later this year by the Organization for Economic Co-operation and Development (OECD) in France.
Using information provided by BigChampagne, the study reports that the US accounted for 55.4 percent of all P2P users in 2003. Germany was second with 10.2 percent of all users. Canada (8.0 percent), France (7.8 percent), and the United Kingdom (5.4 percent) rounded out the top five.
And while audio files are still the most common type of file downloaded using P2P software, they now make up less than half of the total number of files downloaded. In 2002, 62.5 percent of all files downloaded in OECD countries were audio files, with that number slipping to 48.6 percent in 2003.
According to BigChampagne, the downloading of audio files is going down while other files (video, software, games, etc.) become more popular because of higher available bandwidth, allowing larger files to be downloaded more quickly.
Report from CEO Marty Lafferty
 On June 22nd, DCIA Members Sovereign Artists, a progressive music label representing Northwest rock institution HEART, and Shared Media Licensing, an innovative software firm providing "Weed" file-sharing technology, launched a groundbreaking effort.
Their collaboration around HEART's long-awaited album "Jupiters Darling" would mark the first time the work of a mega musical talent was simultaneously released as a CD and as a la carte songs securely distributed online by means of file sharing.
Day-and-date with its availability in retail stores, fans could visit WeedFiles.com to download, audition, purchase, and share individual tracks.
This was not just the "Winwood Woos P2P" style promotional event that previously epitomized such pioneering -- it was bona fide P2P MUSIC SALES!
"Jupiters Darling," HEART's first studio release in a decade, boasts 16 solid tracks of the band's signature sound, combining Nancy Wilson's hard-rocking guitar with the soaring vocals of her sister Ann. It has been met with widespread critical acclaim by All Music Guide and publications from Entertainment Weekly to Tracks Magazine .
Weed files can be freely shared and played. After three free plays, the recipient is invited to purchase the file. Purchased files can in turn be redistributed by means of P2P software applications, such as industry leading DCIA Member distributed programs Kazaa and Grokster, and resulting purchases earn a sales commission for the file sharer.
Last week the P2P effort shifted into high gear in anticipation of HEART's 48-city US tour starting July 22nd and continuing through September 22nd. The entire album plus "Love Hurts," as an EXCLUSIVE track, were made available in the Weed format on Microsoft's high-traffic media guide WindowsMedia.com beginning Friday.
Other DCIA Members are coming on board. Altnet is now applying its TopSearch technology and bringing its global reach to the "Jupiters Darling" P2P sales promotion. INTENT MediaWorks is gearing up its HEART marketing program. And RazorPop is delivering its TrustyFiles cross-platform interoperability to the selling of "Love Hurts" and the entire CD.
"Jupiters Darling" marks the first time ever that a major artist has released an entire CD's worth of material in a format designed to be shared. Stay tuned for results as "DCIA Members put HEART into P2P" - preliminary numbers may be announced as early as this week.
As important as securely protecting HEART's content seeded into file-sharing environments by Sovereign Artists, Shared Media Licensing, and their other P2P distribution affiliates, is continuing work on DCIA's P2P Revenue Engine (P2PRE).
Once fully deployed, P2PRE will ensure that "Jupiters Darling" tracks entered into P2P distribution by fans ripping CDs will be redistributed in the same way as those originated in the Weed format.
To that end, P2PRE Project leader Les Ottolenghi, President of INTENT MediaWorks, will conduct a series of meetings in NY this week with DCIA Member participants Relatable, Digital Containers, Clickshare Service, P2P Cash, and a select group of invited non-Members.
Les notes, "When work on P2PRE is complete, Sovereign Artists will be able to offer each track of 'Jupiters Darling' entered into P2P distribution by consumers simultaneously as an ad-supported promotional version, part of a recurring subscription offering, as well as a la carte - and monetize every P2P transaction.
Consumer Disclosures Working Group
Please contact DCIA Best Practices leader, Elaine Reiss, at elaine@dcia.info, to participate in the Consumer Disclosures Working Group conference call on Tuesday at 5:00 PM ET .
According to Elaine, "Based on significant progress last week, the current goal of this Group is to complete our work product by August 10th. It will be comprised of standard consumer disclosure guidelines for both pre-download and, in response to helpful input from the Hill, operational usage of P2P software programs, and a plan for implementation."
After the Working Group makes adjustments based on feedback from appropriate officials, the DCIA will then create a demo and post it to a non-public part of its website by August 31st for more complete review and comment by interested parties.
By late September, incorporating any changes as a result of this process, a deployment schedule can be put in place for voluntary participation by P2P software distributors. This has the potential to be a very valuable program, benefiting consumers and the distributed computing industry.
The Sound of Inducement
Fox News Channel's July 12th "The O'Reilly Factor" exposed the latest lyrics from major label rap artist, Joe Budden: "Pray that she abort that, if she's talking about keepin' it. One hit to the stomach, she's leakin' it."
Questions raised by this segment were: Why don't lawmakers hold producers and distributors of this filth accountable? How do RIAA members get away with routinely promoting, condoning, and even INDUCING such criminal acts and morally reprehensible behavior?
In the fullness of time, history will reveal the real "bad actors" in the wake of the advent of P2P file sharing. What has been the response to date of the stewards of such illuminating works as Mr. Budden's to the largest audience ever assembled in the history of entertainment?
First, sue the technology innovators for aggregating such an audience. When that failed, sue members of the audience. When that failed, try to change the rules to make it easier to sue more of the audience. When that failed, try to change the rules to force taxpayers to pay for the government to sue even more of the audience. When that failed, go full circle and try to change the rules to be able to re-sue the technology innovators for aggregating the audience.
Fortunately, Congress is exempt from being sued or it might be targeted for its part in these failures, but it is troubling that artists are not. The next tactic may be to sue artists for not encrypting their voices, by using "larynx filters" to prevent unauthorized transmission of their songs.
But then, responsible concerned parties might demand that these larynx filters be used to block lyrics, like Mr. Budden's, whose INTENT IS CLEARLY TO INDUCE CRIMINAL CONDUCT, and that would destroy the business model of these self-proclaimed "pillars" of pop culture.
As objectionable as this material may be, threats to the First Amendment are to the content sector as threats to the Betamax Doctrine are to the technology sector: unacceptable.
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