2. Peer-to-peer technology overview Peer-to-peer (P2P) technology capitalizes on the use of Internet and other networks by making use of “distributed, interconnected computers to communicate faster, more flexibly and more dynamically” (Taylor, 2007) According to MPAA, (http://www.mpaa.org/) P2P enables Internet “to (1) make files (including movies and music) stored on their computer available for copying by other users; (2) search for files stored on other users’ computers; and (3) transfer exact copies of files from one computer to another”
3. 2 effects The sampling effect, emerges when individuals want to see if they like a song or a movie before buying it. The substitution effect, when people download music and movies instead of buying them. (Birgitte Andersen, 2002) This effect generates most controversies about P2P because it leads to copyright infringements.
4. Questions to be answered How should stakeholders respond to the P2P challenge? Can Governments stop the illegal file sharing? How important are the social norms?
5. P2P is all around P2P is a global phenomenon and it seems unstoppable. Past experience shows that even though P2P websites are closed, many new others are opened somewhere else. The reality is that users like to communicate with the world and share things.
7. The stakeholders and their stakes On one side, there are the music and movie producers which see P2P file sharing as stealing and lost revenues. Some artists oppose to P2P file sharing because they see the threat of new artists which are promoted for free through this technology. On the other side, there are the Internet users who see the technology as a way of sharing files with the great Internet community. The P2P idea started from sharing content among friends, but later on, the communities grew larger and larger in the same time with the Internet penetration increase. Legislators are on another side. They are caught between the industry’s claims and the ones of the users. The main dilemma they have to address is how to maintain the P2P benefits while minimizing the harm it causes to artists.
8. Lessons from the past One of the most famous is the VCRs case. In 1976, Walt Disney Productions and Universal City Studios sued Sonny for copyright infringement when it launched the Betamax VCRs. There are some important lessons to be learned from this precedent. The first one is that law looks for the balance between the rights of the content creator and the way his/her creation can generate new value when it is used by others. The second one is that the balance is set after a technology has matured. This may be a hint that realistic copyright laws will be adopted only after industries and users have reached a compromise. Finally, the third lesson is that history repeats itself. Legislators cannot anticipate the tech innovations and industries cannot seek legal protection each time an innovation threatens their status quo
9. The law and the social norms “if people can be made to act properly because of social norms, rather than because of fear of legal sanction, then the desired behavior can be obtained at less cost.” (Lee, 2002) Attempts to enforce the law are expensive, especially in the cases of global phenomena like P2P file share. In addition, regulators lose trust when they oppose the wishes of the masses and take the part of the few powerful parties. Industry also incurs high loses because of bad publicity.
10. P2P content as public good Content shared through P2P has the qualities of a public good: it can be consumed or enjoyed by communities, it doesn’t lose its value by use, it has high development costs and it can be reproduced cheaply (non-rival good). (Lessig, Free Culture: The Nature and Future of Creativity, 2005) These characteristics facilitate some people to free ride.
11. The solutions Limit copy right protected material sharing. For instance, people could pay an extra fee for the Internet connection. This solution would be easy to implement from an administrative view. Internet service providers (ISPs) would probably want to receive assurances of protection from liability from their subscribers’ actions. (Gervais, 2003)
12. The solutions Reduce users’ motivation to download illegally copyright material. Some companied apply successfully existing business models to reach this objective. For instance, Amazon business model can be seen as the reverse of the Gillette one. (Lee, 2002) In the Amazon case, the books sold at $4 discount are the blades and the Kindle, sold for more than $250, is the razor.
13. Conclusions P2P technology is a global phenomenon which impacts users, legislators and entertainment industry. Each party will have to compromise in the future to reach a common agreement. The solution to the P2P dilemmas may be the new business models. Some organizations stopped the fight against the masses attachment to P2P. They have leveraged this new trend into successful products and services.
