The problem is money
The Internet was developed almost by accident, its roots lodged firmly in the world of Academia where progress and the sharing of knowledge take precedence over profits and margins. As such, the Internet is not controlled or ruled by any one country or company - something that troubles large corporations. In fact, Microsoft did not expect the Internet to become as popular as it has been, evident in Word 95 where the spellchecker has no entry for the word “Internet”.

If companies could profit from file sharing applications and people downloading material, there would be no resistance from groups such as EMI or Sony.  Instead, companies think that they are missing out on potential millions, therefore will fight for their right to capitalise. 

I realise the above sounds like I approve of piracy and the downfall of capitalism - quite the opposite in fact. People obtaining materials for free have immediate benefits only. If music becomes unprofitable, we will see a sharp decline in the quality of artists available and a slow stagnation of a market, reulsting in everyone suffering. However, history always repeats itself.  I remember the introduction of audio cassettes, and how people "taping" off music would kill the entertainment industry. That was more  than 30 years ago, and the music industry has become even more lucrative in these 30 years. More recently, the release of recordable CD units to the domestic consumer market has not stifled growth in this area as expected (it is arguable; most media groups have released annual reports lower than in past years, blaming piracy. At a time where stocks and shares are generally in a slump, this can surely be speculation at best). Personally, P2P is a great way of getting those old tracks or vinyl records that you miss. I hear of a lot of people who carry on about how they got this movie and such, but I have neither the time or the inspiration to get a movie that is of poor quality and (in most cases) named wrongly, thus wasting my time.

The damage of file sharing
I am a sceptic. File sharing can be potentially damaging if certain aspects can be met.  Unfortunately, these aspects are extremely hard to prove. File sharing of copyright material can only be damaging if it can be proved that the individuals would have otherwise purchased the media.  Consider that file sharing did not exist; would the average individual spend the money obtaining the same amount of material (usually running into hundreds of tracks) annually?  Of course not - it is unfeasible that the average person would spend thousands of pounds or dollars on music tracks that slightly raise their interest, let alone on tracks that they like. Consider now that millions of people now have access to music they would otherwise not consider listening to. The resulting loss to the music companies is an even zero in a worst-case scenario; people who are not fans of X artist would not pay for their songs without file sharing applications, and are not paying for it whilst downloading them with file sharing programs.  The problem occurs when people are obtaining tracks by their favourite artist for free.

People are still buying albums from stores
In reality, this rarely happens - people are still buying albums from stores as soon as they are released, because these albums become a quantifiable asset to the person.  Computers are not reliable thanks to the huge wave of viruses swimming around on the Internet, so the average person is reluctant to trust their media needs to their all-exploding, ready-to-die PC.  We cannot physically hold a MP3, and that alone puts any consumer off of simply downloading the tracks. Interestingly, Apple have launched a website to download legal music from - if my findings are true, that site should fail quite spectacularly - not just because it requires financial expenditure, but because people are expected to pay for something that they view as not "real". Its like an extended warranty - most people can’t physically grasp it in their hands and say “this is mine” to others, therefore are not interested in it regardless of the benefits. Even files written to an audio CD are seen as a volatile product by many, and are not valued despite what is written on it (largely evidenced by the increase of case less CD-R retail packs). Lastly, you cannot give a CD-R of Justin Timberlake's latest album as a gift - this alone secures a sizable fraction of the current music industry's revenue, especially during the Christmas period.

Now, there is an advantage to be gained for these companies currently moaning and whining - penetration of target groups otherwise unreachable. Radio used to be an excellent semi-advertising medium for music companies, but radio is dying simply because it is too rigid; the station decides what to play rather than the individual.  In a time where the average person is empowered by "on-demand" services such as the Internet, digital TV and 24 hour help lines, file sharing enables people to be given access to what they choose to listen to at any time. It helps people diversify their taste in music with no financial risk.

Legal actions against the fans
Assume that file sharing ultimately accounts for huge losses to companies’ profits. Companies in response will exact their revenge against individuals (already happening via the RIAA) and then the ISPs will be threatened by allowing file sharing traffic to pass through their systems. There are only two consequences from such a public assault. One, everyone is suitably scared and stops using file sharing programs (and all types of pirating techniques). The second (and the most probable) is where the consumer en masse boycott music and media purchases from certain companies.  Do not believe that this cannot happen; several companies in the past have suffered boycotts because of their actions globally (McDonalds most famously because of their strategy of knocking down hundreds of acres of forest to support more grazing land for their cattle led to a huge public backlash. For their credit, McDonalds actually listened to the people and adjusted themselves appropriately).  Suing individuals that pedal copied music for their own profit is all well and good, but taking legal action against the fans, the very people who companies target their wares at is totally counter-productive, and will probably cause more damage than file sharing would do if left unchecked.

The Record Industry Association of America (RIAA), acting on behalf of the major record labels in the USA, has already sued over 240 individuals for their online files haring activities.  On June 25 2003, the RIAA stated that it would start legal proceedings against users that download “substantial” amounts of copyrighted material. This is in effect a warning shot across the bows for all Peer to Peer (P2P) users, the target being to scare people from using programs such as KaZaA and WinMX.  Whether this is the case or the beginning of a major offensive has yet to be seen.

Although the RIAA has significant powers and the backing of extremely powerful entities, they still face problems in stopping the trend in file sharing.  Law and copyright is held firmly in the physical world which is bound by international borders, whereas the medium used to transfer this information (the Internet) operates across the globe, heedless of location. In essence, the RIAA’s powers officially stop on America’s borders, meaning that a file sharer in Texas can be punished; a file sharer in France is immune. However, 56 million people in America file share - if the RIAA can stop P2P in the USA, this will slash a good fraction of the total P2P community. As always, I expect other western countries to follow suit and start their own version of the RIAA.

The subject of file sharing is coming to a climax
Corporate America will not stand idly by for much longer, especially whilst the economic climate flounders.  File sharers will not cease and desist on a technology that has huge benefits.  Simply killing P2P networking will only result in the rise of another protocol to take its place; Napster was removed from the public scene, yet KaZaA, Morpheus and other numerous programs filled the void that it left.  Even if all ISPs worldwide blocked P2P traffic, people will start to use newsgroups or FTP servers instead. The technology can be destroyed; the idea will carry on. Subscription P2P applications are the default answer, but will not work. People in the volumes that use P2P at present will not pay for a unquantifiable product such as a MP3 or MPEG movie.  So is there an answer? In the next part, I will present my solution.

Legal Filesharing: II. The problem is money