Legal threats have file-sharers changing tune

October 09, 2003|By Jon Fortt | Jon Fortt,KNIGHT RIDDER/TRIBUNE

Where pleas from Britney Spears and Metallica failed, a flurry of legal threats seem to be doing the trick: Music downloaders are fleeing file-swapping services in droves, and convenient legal download services are cropping up to fill the void.

Though critics decried the record companies as ham-fisted bullies this past summer for suing 261 people including a 12-year-old girl, the results appear to be just what the industry wanted.

Kazaa usage has fallen 40 percent since last spring when the Recording Industry Association of America began suing students who ran on-campus file-swapping networks. Kazaa, the most popular file-swapping service, had 17.4 million unique U.S. visitors in March, according to Nielsen/NetRatings, a consulting company that monitors Web traffic. In August, the number of Kazaa users had dropped to 10.4 million, and is still falling.

"I think the RIAA has been very successful in intimidating people from using programs like Kazaa," said Jarvis Mak, analyst at NetRatings.

There's more evidence that the tide is turning in the music industry's favor.

Legal music services are cropping up in time for the holiday season. Companies that distribute file-swapping software have formed a coalition and taken to Capitol Hill in an effort to build sympathy and support. Also, the RIAA said last month that 64 file swappers have agreed to settlements, rather than go to court to answer charges that they violated copyrights - and 838 people have admitted in writing to swapping files, and promised not to do it again.

Across the country, users are backing away from swapping copyrighted files.

"After they began suing people - although I don't download enough, in my opinion, to be a prime target - it really came to a point where it wasn't really worth it anymore," said Latanya Johnson, a 28-year-old recruiter in Hayward, Calif.

"I've been holding off," said Noah Robinson, a 27-year-old marketing consultant in New York. "I don't want to get sued. I was never a big user per se, but I do have a ton of music files."

Meanwhile, Apple Computer's iTunes Music Store racked up 10 million song downloads in three months of operation, and it has opened the floodgates of legal online music. A handful of copycat services have surfaced, including BuyMusic.com, MusicMatch 8.1 and a new, legitimate version of Napster. A music store from RealNetworks and a Windows PC version of iTunes should be ready by the end of the year.

So has the recording industry won?

"The record companies are winning a skirmish, but it's still an open question as to whether they're winning the war," said Leonard Rubin, intellectual property rights lawyer with Sachnoff & Weaver in Chicago. "What they're not doing is figuring out how to either restore some favor among music lovers, or work with the system to figure out some way to please these people who they are now offending."

Rubin might be right. The VH1 music channel conducted a national phone poll recently and found about a third of downloaders think the lawsuits will make them want to buy more CDs. Nearly three-quarters of those polled said lower prices would entice them to buy more CDs, however.

It is probably too early for the record companies to declare victory in killing the music-swapping trend. After all, the recording industry seemed to have the piracy problem licked more than two years ago, when it successfully sued to shut down Napster. To the industry's chagrin, however, hackers figured out a more discreet way to share files, and the likes of Kazaa were born.

Kazaa will be tough to kill. It has been downloaded more than 230 million times, according to Sharman Networks, the company that distributes the software - making it the most popular piece of software ever distributed over the Net.

Four other file-sharing companies - Blubster, Grokster, Lime Wire and Morpheus - have formed a coalition, P2P United, to beef up support on Capitol Hill. They want Congress to drive the recording industry to the bargaining table.

As a first step, P2P United last week announced a voluntary industry code of conduct. It includes providing clear steps users can take to limit others' access to data on their computer hard drive. It also recommended clearly posting a notice stating that the file-sharing software could not be used for illegal purposes and could be subject to criminal penalties. Coalition members also will post links to obtain additional information regarding copyright laws.

"It is refreshing to see that P2P United is acknowledging that their members should be more active in educating their users about the consequences of illegal file sharing that is rampant on their networks as well as the other risks these networks pose to personal privacy and security," said Amy Weiss, spokeswoman for the RIAA. "But, let's face it, they need to do a whole lot more before they can claim to be legitimate businesses."

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