Posted on 24-9-2002
Music-Swapping
Service Gains Stature
in
New Deal
By MATT RICHTEL, NYT
The operator of the KaZaA (www.kazaa.com)
music-swapping service plans to
announce a partnership today with one of Europe's major Internet
access
providers in a deal that underscores their mutual benefit from
a method of
exchanging songs that has raised the ire of record companies
worldwide.
The deal, the first of its kind, appears to give KaZaA a new
ally in the
fierce legal and policy debate that has pitted the record companies
against
KaZaA and similar services, including their renowned — but now
dead —
predecessor, Napster. The record companies have accused the
services of
abetting the illegal free exchange of billions of music files,
and, in
turn, of causing a decline in record sales. The deal also underscores
the
potential common interests of high-speed Internet access providers
and
organizations that deliver complex digital media. Internet providers,
including Tiscali, have said that one way to convince consumers
to pay for
more expensive high-speed access is to offer them content, like
movies and
music, that takes more time — an often excruciating amount of
time — to
download using slower dial-up connections.
Mario Mariani, senior vice president for access and media business
of
Tiscali, a public company based in Cagliari, Sardinia, that
is listed on
the Nuovo Mercato in Milan, said he hopes for "great success"
in adding to
Tiscali's modest base of 100,000 high-speed users. The rest
of the
company's customers access the Internet through dial-up phone
lines. Mr.
Mariani said he did not believe, as the record companies assert,
that KaZaA
promotes music piracy, and stated, "We are really against piracy."
He added
that he believes that KaZaA and other music swapping services
will put
pressure on major record companies to develop new forms of distribution,
and that the deal with Tiscali will help prompt such development.
"This is
an important step in creating a legal market," Mr. Mariani said.
"Music and
the Internet is the biggest market where there is a big demand,
but not yet
an offer to meet the demand."
In fact, though, there is a nascent legal market, and Tiscali
profits from
it as well. On the company's Web sites in the various countries
where it
operates — among them Britain, France, and Germany — Tiscali
offers music
from major record companies in the United States and Europe
through a
service called OD2. Record companies in the United States and
Europe,
facing wide criticism that they have fallen behind in technology,
have said
they cannot afford to emulate KaZaA and services like it, which
allow users
to exchange songs for free over the Internet through their home
computers.
The companies say they are trying to find a balance between
meeting
consumer demands and making a level of profit they deem acceptable.
Sharman Networks, which is based in Australia, boasts that 120
million
people have downloaded its KaZaA software; the announcement
of the deal
with Tiscali is part of the latest release of KaZaA's software,
called the
KaZaA Media Desktop.
Whether a new legitimacy will result from the deal with Tiscali
and whether
it will be blessed with legality remain to be seen. The Recording
Industry
Association of America, which represents the major record companies,
has
sued KaZaA in federal court in Los Angeles, alleging copyright
infringement. The association is hoping for an outcome similar
to that in
its case against Napster, which was forced to shut down after
a judge found
it guilty of assisting copyright infringement. For its part,
Sharman
Networks contends that KaZaA is different from Napster in at
least one
fundamental way: its service is a pure form of "peer-to-peer"
exchange, in
which the company's own computers play a more limited role in
enabling the
exchange of music than did the computers of Napster. Users of
KaZaA and
similar services, like Morpheus, store music on their own computers,
but
they also use their own computers to help others search for
the music they
want. Specifically, the software looks around the network of
users for
those with the most powerful computers, turning those computers
temporarily
into hubs that other users can tap into to search the rest of
the network.
As Napster did before it, Sharman Networks argues it cannot
control how the
KaZaA service is used and cannot be held responsible for users
who exchange
copyrighted files without the permission of the copyright holder.
Earlier
this year, a Dutch appellate court agreed, saying the responsibility
lies
with the users, not the music service. But a number of American
legal
experts have said KaZaA and other such peer-to-peer services
are less
likely to prevail in United States courts. They point out that
while
KaZaA's servers are not implicated in each music search, those
computers do
serve up advertising to KaZaA users; as a result, KaZaA profits
directly
from the free exchange of copyright music files. Jonathan Zittrain,
an
associate professor at Harvard Law School, said the significance
of the
deal between Sharman Networks and Tiscali is likely to be more
a cultural
one than a legal one, noting that "all hands to this conflict
recognize
we're at a cultural point of inflection." This deal, he said,
implicitly
lifts peer-to-peer networks out of the online demimonde of casino
sites and
tasteless pop-up windows to the better tended world of Internet
access
providers.
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