<br><br><div class="gmail_quote">---------- Forwarded message ----------<br>From: <b class="gmail_sendername">Pablo Ortellado</b> <span dir="ltr"><<a href="mailto:pablo@riseup.net">pablo@riseup.net</a>></span><br>Date: Mon, Jul 27, 2009 at 12:48 PM<br>
Subject: [G-POPAI] More P2P Services Try To Convert To Licensed-Content Models<br>To: <a href="mailto:gpopai@lists.riseup.net">gpopai@lists.riseup.net</a><br><br><br>More P2P Services Try To Convert To Licensed-Content Models<br>
<br>
It's a familiar pattern: After amassing a huge<br>
user base by providing unauthorized access to copy-<br>
righted material, an illicit online service tries to get<br>
back in the good graces of the recording industry,<br>
only to fall off the radar screen of its once-avid fans.<br>
The experiences of Napster, iMesh and eDonkey<br>
have demonstrated how tough it is for brands built<br>
on the promise of free music to convert themselves<br>
into moneymaking businesses. Now the Pirate Bay,<br>
Kazaa and LimeWire are attempting to navigate a<br>
successful transition to legitimacy, reaching out to<br>
labels to remake themselves as fully licensed en-<br>
tertainment services.<br>
"Just because you joined the club doesn't mean<br>
you get to make money," says Mike McGuire, a<br>
media analyst at the Gartner Group. "You have to<br>
create your own branded experience. It's all about<br>
how you execute on that and create a compelling<br>
alternative to the services out there. Not just the<br>
free [peer-to-peer] networks, but all the legitimate<br>
networks . . . That's going to be tough."<br>
More than half of active P2P users cite free music<br>
as the primary reason they use file-sharing serv-<br>
ices, according to Gartner data. Other reasons in-<br>
clude the ability to access content not otherwise<br>
available on licensed services. And when a P2P site<br>
shuts down or tries to go legit, users tend to mi-<br>
grate to the next replacement--from Napster to<br>
Kazaa, Kazaa to LimeWire and so on.<br>
But Wayne Rosso, the former Grokster and Mash-<br>
boxx CEO who's now advising Sweden's Global<br>
Gaming Factory in its efforts to make the Pirate<br>
Bay legitimate, says any new music service faces<br>
challenges these days.<br>
"It's extremely difficult no matter who you are,"<br>
he says. "Let's face it: You're in a market with two<br>
competitors--Apple and free. To make a dent, you<br>
have to come up with something that's really novel."<br>
Global Gaming plans to charge users an unde-<br>
termined monthly fee that will let them download<br>
music. But it would give them the option of lower-<br>
ing that fee if they let Pirate Bay use their comput-<br>
ers for online data storage and Internet bandwidth<br>
optimization services it plans to sell. The company<br>
would use the combined computing power of Pi-<br>
rate Bay users to provide virtual lockers for clients<br>
interested in backing up files online, help route In-<br>
ternet traffic for easier and faster media transmis-<br>
sion and other services. The more computing<br>
resources users volunteer for these services, the<br>
less they would pay in monthly fees.<br>
"It's a bank shot," Rosso says. "There's a lot<br>
of moving parts to it. However, it has the poten-<br>
tial to be huge." Rosso didn't provide a specific<br>
timetable for Global Gaming's plans.<br>
Kazaa, meanwhile, is counting on an inno-<br>
vative billing system to put it over the top. The<br>
company has launched a $20-per-month stream-<br>
ing-only subscription service in the United<br>
States that allows users to add their monthly<br>
payments to the mobile phone bill of participat-<br>
ing carriers--including AT&T, Sprint and T-<br>
Mobile--rather than provide a credit card. The<br>
company also plans to add Internet service<br>
providers to its list of partners.<br>
Although the service is pricier and less flex-<br>
ible than other subscription plans on the mar-<br>
ket, Kazaa CEO Kevin Bermeister says that 18<br>
months of testing various models with 10,000<br>
trial users suggests the offer will succeed.<br>
"We think people will pay as long as the abil-<br>
ity to pay was as convenient as the ability to steal<br>
music," he says. "The price of course is high,<br>
[but] the convenience of the billing platform is<br>
enabling us to get to the higher price point."<br>
Leading P2P network LimeWire, which still<br>
faces copyright infringement suits from the ma-<br>
jors, also intends to embrace a licensed-content<br>
model, according to CEO George Searle.<br>
The first step toward this goal was the com-<br>
pany's launch last year of the LimeWire Store,<br>
with content from CD Baby, the Orchard, IRIS<br>
Distribution and Nettwerk Music Group, among<br>
others. The store offers a la carte sales and an<br>
eMusic-like subscription model. The next step<br>
is to replace the P2P service with a standard ad-<br>
supported service and an optional subscription<br>
tier, sharing revenue with licensing labels.<br>
"Quickly forcing conversion to a paid serv-<br>
ice doesn't work," Searle says. "In order to re-<br>
claim P2P users, it's critically important to<br>
preserve the core user experience. A quick tran-<br>
sition to a service that might be label-friendly,<br>
but devoid of consumer appeal, is going to fail."<br>
--Antony Bruno, Denver<br>
<br>
<br><a href="http://www.gpopai.usp.br" target="_blank">http://www.gpopai.usp.br</a><br></div><br>