A Nation of Pirates
Panicked by digital plunder, the entertainment industry fights back
Technologically, too, the strategy may be a loser's game: Developers--who call themselves "P2P soldiers"--are already planning next-generation peer-to-peer programs that completely mask user identities or dice up the delivery of files so that they cannot be identified or traced easily. "The new goal in P2P is true security and identity masking," says Jorge Gonzalez, cofounder of zeropaid.com, a file-trading portal.
Material girl? Trying to digitally outsmart the bootleggers has had embarrassing results in the past. Hackers foiled Sony's expensive CD-copy-control technology by drawing around the edges of the disks with a permanent marker to hide key data. This spring, pop star Madonna tried to booby-trap peer-to-peer networks by loading an obscenity-laced tirade masquerading as files of songs from her new CD. Bootleggers retaliated by hacking her Web site and making the tunes on sale there available free.
Finding a legal--and profitable--way to give people what they want could be a better solution. Even if the lawsuits work, says Josh Bernoff of the Forrester Research technology consulting firm, "[the industry is] still going to have to create legitimate alternatives." After several failed attempts to launch music download sites, record labels have found their first hit with Apple's iTunes. The service, which offers more than 200,000 selections at 99 cents per download, has sold more than 5 million songs in its two months online. Unlike earlier services, iTunes allows users to transfer their digital music files to other devices such as MP3 players, charges no subscription fee, and offers unique features such as 30-second previews of songs before the user is charged for a download. "New and very effective," file-trader Gonzalez calls it. The music industry has also lured some CD buyers by packaging new-release CDs with bonus DVDs full of extras, including music videos by the artist.
But ultimately, the creative industries may have to adapt to a new role in which they act more as publicists and less as distributors, perhaps earning a percentage of the artists' revenues. "Record labels will have a promotional role," says Bernoff. "They will be like agents in a lot of ways, where they help artists to get big." Trouble is, today's pirates may not want to pay more than a song for that service.
With Seth Rosen
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