P2P Future Past Perfect: Industry Commentary
October 15, 2005
It's been six months since the Supreme Court ruling, during which time Kazaa was kablammed Down Under and the music biz became more aggressive with cease and desist letters to major P2P developers. So where is P2P heading? ... Nowhere new.
Let's look at the leading candidates.
- Freenet still hasn't launched. A few dark clients have launched with limited notice. There has been surprisingly little development in this segment.
- Limited P2P services that steer clear of the liability quicksand like Grouper with 100,000 groups and Mercora with 35,000 simultaneous users are finding a strong niche. But they are neither experiencing the breakout success of pure P2P clients, nor significantly displacing existing P2P users.
New distributed P2P networks?
- Newer networks like Ares, SoulSeek, and MP2P have developed solid user bases, but none significant.
Indeed oldtimer Gnutella is making a comeback, based on the stats at Slyck that show G1/G2 poised to overtake Fast Track (Kazaa, Grokster). Gnutella started in March 2000, five and half tech years, or 70 human years, ago.
A generation ago the litigation against Napster at least had a tangible short-term impact. Napster was the dominant market leader. P2P was severely impacted. Centralized P2P networks were obliterated. There was no standard bearer for two years until technology innovation produced decentralized networks with Gnutella and Fast Track.
Today is a different story. The litigation against the makers of Grokster, Streamcast, and Kazaa will have so little effect that it's not resulting in technological innovation from either consumer demand or developer supply.
The future many warned the entertainment industry about is already here. The Gnutella resurgence provides a clue. Gnutella's appeal is not its primitive technology, but its open protocol that attracted a large developer community with dozens of clients.
Ironically the innovation is not technological, but social. P2P is going back to its open source roots. In response to industry litigation and high business risk developers are increasingly returning code to the wild. They are giving it back to the community with major clients like Shareaza and Limewire opening up, open distros like eMule, and more to come.
Shutting down or converting the top P2P clients will have little effect on the overall open P2P networks. Only a tiny fraction of file sharers will stick around for the euthanized versions that RIAA finds acceptable. We've already seen millions of people stampede from Kazaa to eDonkey and other clients in response to big music's initial and only effective interdiction program. As the top clients stagnate, die, or transition, their users will migrate to friendly analogs. eDonkey fans will change horses to eMule, Limewire users will chill with Frostwire, and Kazaa folks will frolic with MLDonkey.
A hundred clients have already bloomed using today's existing P2P protocols. Thousands more will bloom totally legal on the highways of download.com, the hamlets of SourceForge, the side streets of Google, the back alleys of IRC and personal web sites, the countless foreign villages of Russia, China, and the world, and even the hush of the darknets.
This evolution exposes the exponential futility of the record industry's litigation against the top P2P companies, as well as the senseless Supreme Court ruling that bases liability on mind reading and smart marketing. (Sam, next time leave your MBA at home.)
The recording labels had little to lose and much to gain when they shut down Napster 1.0. Today the cost-benefit analysis is reversed. Forcing the P2P leaders out of the open P2P business merits only a limited win. The PR is always good. But the industry, current networks, and unauthorized downloads will continue unaffected. The loss however will be huge.
These companies are not all poster children for corporate and consumer good. Some distributed plenty of destructive spyware. But they have been forced to adopt fully legal business practices precisely because they are large and corporate.
The large P2P companies serve a critical purpose in this next generation P2P ecology. They form and support positive industry associations and groups like the DCIA, P2P United, and P2P PATROL. They work with government. They serve as the voice for consumers. They sell legitimate entertainment products. They promote smaller artists and content developers. They develop legal uses of the P2P networks. They are the focal point for mutually beneficial business models. By virtue of their size they exert influence over the P2P networks and other P2P software developers. They set standards for software quality and performance and user experiences and expectations.. Their for-profit corporate structure and US presence ensure a business orientation with accountability and rationality. They are the bulwark against bad actors, from child pornographers to virus-writers to anti-copyright vigilantes to scam web sites.
While the top P2P companies exist, Hollywood and the government have some influence over P2P.. Without them who will be responsible? There is only the mob and the capriciousness of contributing programmers. At best, these developers are amoral. As a whole they are not knowledgeable about business, are not in the US, and do not cooperate with copyright holders or authorities. At worst, they are anarchists.
Who will consult with the FBI or testify at the next FTC Workshop or US Senate Committee on the Judiciary, Ashraf from Pakistan?
Marc Freedman is a digital entertainment consultant and frequent industy speaker. He has his own consulting practice FutureVision, and is a contributing analyst for The Diffusion Group, a digital home research consultancy. Marc serves as CEO at software developer RazorPop. He writes at the P2P Insider and Digital Music Future Weblogs.