David: Compulsory licenses, believe me, would be great. I'd be thrilled if they would do compulsory licenses for the Net.
Tim: The reason we can't go there is not because there's not enough money for the artist, but because there's not enough money for the music companies.
Steve: There's not enough compenstation for the record labels to actually sign up with Napster. They want to deal with the distribution on their own terms. So that's why they just came up into this partnership with RealNetworks and they're going to launch Duet probably by the end of summer.
David: Well, you've got AOL Music, MusicNet, Duet -- you've got all these things that all the labels have been promising. It's kind of disingenuous, wouldn't you say, that they keep putting out CDs that are basically open platters of data and still keep trying to come up with secure file formats.
Tim: I don't think secure file formats are the way to go. First, you recognize where the future is going, and then you say, "OK, if that is the future, what are we going to do about it?" You don't put fingers in the dike and try to make that future not happen. When radio first came about people had to say, "Gee, what are we going to do about it?" There's a lot of crud out that this will mean the end of paid content. If that were the case, software has been in the same case for a long time. It's been possible to download software, and I'll tell you, nobody's put Microsoft out of business yet.
David: Microsoft has a very, very active and valid antipiracy program.
Tim: Absolutely. They also have very well-established channels for putting their product in the hands of people so that it's cheaper to pay than it is to steal. Right now we're in a situation where there is no good alternative that makes it cheaper and more effective to do the right thing. If people could pay for music dial tone and have anything they wanted for some reasonable fee, I think they would go there. They might not go there right away, because they've been trained that reasonable is zero, but I think you could do that through re-education. You do some policing and you do some work on that, just like Microsoft polices their license and have put up some little barriers, but they don't lock things up and throw away the key. We went through that with software.
David: I had asked whether or not along with providing people information on Napigator, iMesh and Gnutella, if you could also provide people with information, right along with it, so that it doesn't look as though you're trying to promote illegal activity. I haven't seen anybody write about this, especially from the pro-P2P camp. I see a lot of people saying, "This is the second coming of the Net; that P2P is revolutionary." When I see Intel say, "This is going to revolutionize everything," my BS detector goes up. Anytime anybody says, "This is going to revolutionize anything" in the world of computing or technology -- for how long? For three months? Nine months? Twelve months?
Steve: Well, P2P networks like Gnutella are an old idea though. This was Tim Berners-Lee's original version of the Web. It was supposed to be a two-way enabled Web where every machine acts as a server. Now we're talking about Gnutella being the next web. Well, that's exactly what Tim Berners-Lee was thinking about.
David: At that time it was because we were all using Unix boxes and they were servers, but with the world of personal computing sort of invading the Web as we knew it, that couldn't possibly be the case, and now we're seeing sort of what happens when you scale to that kind of size. I guess I want to give you the chance to talk about P2P, the technology and the architecture, and where you see this going.
Steve: I was talking to Tim before we started about three things that are really going to change everything. Napster's just the tip of the iceberg. Now that broadband connections are starting to get more and more prevelant, and more people are starting to use them, people are going to start jumping ship from Napster over to these alternative file-sharing networks. Even though we think the subscription model should work, I don't really believe it will. The big thing that is coming is MPEG-4, which is currently being developed but hasn't been adopted by Microsoft or RealNetworks yet. Once either one adopts the codec, movies and television shows will be traded online as easy as MP3's are currently. If I miss "The Sopranos," I'm not going to need my subscription to HBO anymore if I can get it online the next day.
David: If it's provided by somebody other than HBO, do you feel good about that?
Steve: The studios haven't provided an easy way for me to get their product online, so in a sense they are getting me into a habit of piracy.
David: And you're saying it's the record companies' fault that we're all trained to feel this way.
Steve: I'm saying what needs to happen is that the movie and television industry need to realize what's happening with Napster and start their own business model before this happens.
Tim: With Microsoft getting into the game with Ultimate TV, they got so many deep pockets to go after, they don't like the way it's going. I think Microsoft is pretty forward-thinking about business models. They think very hard about how to monetize anything they do. I think it is possible, if you have some forward-thinking, technologically astute people at the helm, we can in fact come up with technologies and business models that make this stuff pay off.
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