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In most countries, the music industry is taking song-swappers to court. But the sheer demand for downloading is forcing record labels, and now movie companies, to work with online retailers to offer legitimate alternatives.
With the advent of faster broadband speeds, the illegal swappers are not just after music.
The editor of UK magazine Rip 'n' Burn, Tom Dunmore, says the film studios today are in the same situation record labels were four years ago.
"It's absolutely crucial that the movie industry embraces downloading and provides legal services now, before the number of people using P2P for movies goes through the roof and people get used to getting movies for free."
Unlike the contracts offered by the labels, the artists own the copyright to their songs and set the price for a download.
Tune Tribe's John Strickland says: "With the advent and acceptance of broadband in the internet space, we're seeing that this is the way consumers are going to download and consume music.
"A major label would offer 16% of the net proceeds. We're providing up to 80% of the gross proceeds back to the artist and label. It's a complete showstopper."
Another shop window for upcoming artists could be the new streaming music websites.
Services like Rhapsody and Napster operate as online jukeboxes, allowing the downloader to try before they buy.
This, according to Ed Averdieck, of the digital music distributor OD2, is the real benefit of streaming.
Marillion's Mark Kelly adds: "All their fans then start streaming the music. They notice that this band have got a little bit of a following here.
Just a few years ago the entertainment industry despised file-sharing as piracy.
But now some big content providers, including the BBC, are looking to harness the power of our PCs.
The BBC is aiming to offer most of its programmes for download next year and it wants to use our computers to deliver them.
BBC director of new media Ashley Highfield, says file-sharing is a great way to control the cost of delivering large files like TV programmes quickly.
He explains: "Every person who comes to us to get a video file of a programme to watch it costs us to distribute it over the internet to them.
"P2P will help us substantially reduce our distribution costs. We send it out once and then people share the programmes among themselves."
An encryption system would lock any files after seven days, making rights management easier to negotiate and control.
- "Peer-to-peer goes legitimate," Dan Simmons, Reporter for BBC Click Online, BBC News, http://news.bbc.co.uk/go/pr/fr/-/2/hi/programmes/click_online/4104827.stm, December 17, 2004
File Name: dan_simmons20041217
Post Date: December 19, 2004 at 12:30 PM CST; 1830 GMT