Kazaa Agrees to License -P2P Suit Settled
The future of P2P
So Kazaa follows Napster- a re-birth...and Hollywood.Media partners anew:
Excerpts from The International Herald Tribune July 28, 2006 (By Eric Pfanner):
LONDON The music industry and Hollywood movie studios said Thursday that they had settled lawsuits against a longtime nemesis, the owner of the digital file-sharing network Kazaa, freeing that company to transform itself into a legitimate online distributor of films and music.
Sharman Networks, a privately held company that is incorporated on the Pacific island of Vanuatu and operates Kazaa from Australia, agreed to pay $115 million to the major record companies and movie studios, which accused Kazaa of aiding the illegal copying of music via the Internet."
"All the parties involved now recognize the time is right to work together, and we are looking forward to collaborating with the music and motion picture companies to make P2P an integral part of the future of online digital entertainment," Nikki Hemming, chief executive of Sharman Networks, said.
Kazaa has been earning revenue primarily from advertising, and Kennedy said the recording industry would not object if it persisted with an advertiser-supported model, rather than charging users, as long as it pays the proper royalties.
Such a model would differentiate Kazaa from other online music services, which typically charge users for downloads or subscriptions. Digital music offerings are proliferating, including several from companies that use peer-to-peer technology.
The movie industry has also begun to embrace peer-to-peer technology as a means of distributing its content. Several download-to-own services, which allow users to purchase digital files of films via the Internet and watch them as they would a DVD, have also been started.
P2P is shorthand for "peer-to-peer" network technology, which allows
users to share computer files with one another over the Internet, including things like music and movies stored in digital form. Kazaa was a pioneer of peer-to-peer network software.
Under the settlement, Sharman Networks will pay the major record companies "in excess of $100 million," said John Kennedy, chief executive of the International Federation of the Phonographic Industry. Several executives who were briefed on the agreement said the total payment was $115 million; they did not provide a breakdown of payments.
Under the settlement, the music industry federation said, Kazaa has agreed to license music from the four major recording companies - Universal Music Group, Sony BMG, Warner Music and EMI Group - which own the vast majority of music copyrights. Independent record labels are not included in the settlement, but would be free to pursue their own licensing deals with Kazaa, executives said.
"We are under no illusion that this solves everything," Kennedy said, noting that other file-sharing services thrive. "But this is very encouraging."
In making the switch to a licensed, royalty-paying business, Kazaa would follow Napster, one of the original file- swapping services, which was reborn after an adverse court ruling in 2001.
Kazaa said it would take steps to prevent unauthorized distribution of material via its network in the meantime.
"We are working on new technologies with the content industries," said a spokeswoman, Felicity Campbell. "They will be unlike anything you've seen before."
Bookmark: 
