Tuesday, June 28, 2005

The P2P Backlash on MP3 Sales?

Mark Evans
http://evans.blogware.com



Now that the U.S. Supreme Court has ruled P2P services such as Grokster are liable for the actions of their users, a big will be the impact will be on MP3 players. Whether anyone wants to admit it, MP3 players such as iPods have become popular because people can load them up with free hundreds, if not thousands, of free songs downloaded using P2P services. Anyone who thinks all that music has been dutifully ripped off CDs or bought legally is delusional. If the "pipeline" to free music disappears or shrinks will this make MP3 players less compelling? If this happens, will the iPod suddenly become yesterday's story? I'm willing to bet Apple will attempt to downplay this scenario as far-fetched while talking up the success of iTunes. Maybe the legal downloading music business will receive a much-needed boost from the court decision. I suspect it may cause some people to think twice about using a P2P service. Then again, the concept of music for free is still very much alive and well - especially within the key 15 to 24 year-old demographic - if you look at the number of users and songs available on Kazaa, Limewire, BitTorrent, et al. You may be able to wound the P2P beast but killing it is going to be extremely difficult - even with highest court in the U.S. weighing in. Addendum: Michael Geist, who has become a go-to P2P legal expert, believes the court ruling has no impact on P2P users because there are already laws that address downloading. Instead, he said the decision makes it clear P2P service providers are now legally vulnerable. For people still intent on downloading, the challenge may be finding a service if Grokster, Limewire, etc. decide it's not worth the legal hassle. Then again, I'm sure someone could easily set up a P2P service in a country not adhering to WIPO, and snub their nose at the U.S. Supreme Court.

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