ACT I: THE SET-UP

Current system is shot to hell. Heads buried firmly in sand.

A few months ago, the writer and NYU professor Clay Shirky told me he thought DRM was a “nostalgic” idea. Nostalgic is the best adjective I’ve heard to describe how most large entertainment companies think about controlling their content in a digital era. Big media continue to view the situation through rose-tinted spectacles while consumers see red. When being a pirate is the easiest way for people to access the content they want in the format they want it in, then something has gone very, very wrong.

There isn’t a moral defense for stealing in most cases. But there isn’t a moral defense for invading people’s privacy and imposing draconian laws to protect outdated, crumbling business models either. Music and movie piracy is rampant because over the last ten years, the market has utterly failed to provide a wide range of preferable legitimate solutions. If this continues as bandwidth increases and download speeds accelerate, the entertainment industry will be left in ruins. Many think that needs to happen for new business models to form. I think those currently in power simply need to grow a set and confront the reality of the situation.

So far the search for new revenue streams by the big labels and studios has only turned up one that they seem to be comfortable with: the legal department. It’s impossibly difficult and expensive for the average consumer to use music legally in podcasts, on websites, in remixes, or in public speeches for example. But if you do decide to use music illegally, it’s entirely possible that a huge team of lawyers will come at you like a troop of rabid spider-monkeys. Instead of looking at real solutions, all the labels seem to be doing is exacerbating their problems.

Pretending the current laws or legitimate options for consuming movies and music online are in some way going to stop piracy from turning the entire entertainment business into a giant anarchic swap-meet is like pretending recycling plastic water bottles will single-handedly end global warming. The problem is the entertainment business doesn’t recognize the giant anarchic swap-meet for what it really is; a great way for them to make a ton of money.

ACT II: CONFRONTATION

Licenses replace sales. Labels accept reality, or die.

CD sales are in freefall, (the arrival of the Mac Book Air this week was perhaps the final death knell for the format) and the legal department is clearly not a viable long-term revenue stream. A more efficient way to monetize how we consume music online (and other goods with zero marginal production costs) is not to think about monetizing them in terms of sales, but instead in terms of licenses.

This is already beginning to happen. Deals like the “Comes With Music” partnership struck between Universal and Nokia last month may feel like “one step forward, two steps back“, but at least we’re finally heading in the right direction. And the fact that all the majors are starting to work with legitimate file-sharing models like iMeem is encouraging.

The solution we are slowly moving towards is a voluntary collective license for music, which consumers could choose to pay, or not. It needs to work all over the world. National boundaries don’t apply to this kind of information anymore. To pretend they do is as nostalgic a notion as DRM.

Organizations such as ASCAP or the BMI could fulfill this role. This system wouldn’t be a tax; there would be no cap on the amount of money an artist or label could earn, innovation would not be stifled. Bennet Lincoff wrote a paper this time last year which I believe could be the answer. The EFF is also supportive of a similar solution, which they outlined in a 2004 paper:

“The concept is simple: the music industry forms a collecting society, which then offers file-sharing music fans the opportunity to “get legit” in exchange for a reasonable regular payment, say $5 per month. So long as they pay, the fans are free to keep doing what they are going to do anyway—share the music they love using whatever software they like on whatever computer platform they prefer—without fear of lawsuits. The money collected gets divided among rights-holders based on the popularity of their music.

“In exchange, file-sharing music fans will be free to download whatever they like, using whatever software works best for them. The more people share, the more money goes to rights-holders. The more competition in applications, the more rapid the innovation and improvement. The more freedom to fans to publish what they care about, the deeper the catalog.”

Under this system, the internet would work exactly as broadcast radio does. As the EFF proposal points out, “songwriters originally viewed radio exactly the way the music industry today views KaZaA users—as pirates. After trying to sue radio out of existence, the songwriters ultimately got together to form ASCAP (and later BMI and SESAC). Radio stations interested in broadcasting music stepped up, paid a fee, and in return got to play whatever music they liked, using whatever equipment worked best.”

We have a system where infringement by many pirates affects the ability of rights holders to license music legally to the few media companies that can afford it. What we need is a model where infringement by a few pirates will not affect the ability for rights holders to license music to the many law abiding broadcasters who want to use it.
Sure, there is good money in making it very difficult to license music, and charging a few people a lot for the privilege. But it’s likely there is a lot more money in making it very easy to license music to a lot of people for very little.

This wouldn’t just allow individual users to share songs legally – it would create new opportunities for a lot of sites to start selling music, which is a good thing. The entertainment industry has made it very clear it would prefer not to be beholden to a small handful of stores like iTunes, an anti-competitive situation which isn’t great for consumers either. It’s a monumental task, but it would create jobs and wealth and probably a lot of opportunities we can’t even see yet.

ACT III: RESOLUTION

A viable entertainment industry unfolds. New revenue streams spring forth.

The truth is we still need middlemen in the entertainment business. It’s just they stopped doing their jobs properly, so we decided to stop paying them. But if the industry embraces the way millions of people have been consuming their products for the last decade, there will be no longer be a reason for consumers to defend piracy. There will be more money for artists. There will be more commercial opportunities to distribute wider varieties of content. Publishing will grow. There will be a larger entertainment industry with more revenue streams, making more money than it does now. Once the benefits of sharing content in a more liberal fashion are widely understood, our definition of fair use will likely change as well, meaning a wealth of new non-profit driven content and culture will be created at the same time. I think that definition will look something like Tim Wu’s: “It is time to recognize a simpler principle for fair use: work that adds to the value of the original, as opposed to substituting for the original, is fair use. In my view that’s a principle already behind the traditional lines.”

Confronting the reality of where the traditional lines really are, and where the new ones have been drawn by the consumers (the people who really make the rules) is the only long-term solution to the pirate’s dilemma the entertainment industry faces. It is, in this instance, the only way the industry will ever stop piracy. It is the right thing to do, and it will force the rest of us to start doing the right thing too. When the entertainment industry decides to grow up about file sharing, the rest of us will have no choice but to do the same.

For those who are interested, my book: “The Pirate’s Dilemma: How Youth Culture Is Reinventing Capitalism” is out now through Free Press, and probably soon on a BitTorrent tracker near you ;).

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.

Despite the differences these four guys sometimes have, they all believe that no other P2P protocol performs better than BitTorrent at the moment. However, there’s no doubt that there will be changes in the future.

“Technology is always evolving and I have little doubt that 5 or 10 years from now we will be using a different protocol” says Justin from TorrentSpy. Peter (aka Brokep) from The Pirate Bay also thinks new protocols will take over eventually. “There will be other alternatives,” he said “Not necessarily ours but others will come.” Niek from mininova has more faith in BitTorrent but expects that the protocol will evolve rapidly, an opinion shared by Gary from IsoHunt.

Most of the admins also predict that mainstream production companies will eventually embrace BitTorrent and P2P and some of them hope to play an active role in the transition from old to new media distribution. Below you can read the full responses to the question I asked them: What do you think the future holds for BitTorrent and your website?

Niek from Mininova

I’m sure that we’ll see quite a few changes in the P2P landscape during the next couple of years.

From a business perspective, I notice that content producers recognize more and more the advantages of P2P distribution models (see e.g. the Pariah Island case). We all know that DRM is close-to-death, and major studios are now rethinking their business models, which is a good thing. We’d like to see Mininova play a major role in this shift, so stay tuned for some related announcements the coming weeks :)

Looking at the technical side of things, I expect that the BitTorrent protocol will evolve rapidly. See for example (audio and video) streaming, which is already possible and supported by several clients. Other interesting developments are BT-capable chips and TOR-like functionality. New protocols (like the one proposed by The Pirate Bay) might arise, but only time will tell whether these will substitute BitTorrent. Personally, I think BitTorrent can go a long way with some extensions and modifications.

Having said that, Mininova’s only focus won’t be BitTorrent: when the “next big thing” arises, we’ll definitely consider backing it.

Justin from TorrentSpy

I don’t really concern myself with the future of BitTorrent the protocol but I do care about peer-to-peer as a technology platform. Technology is always evolving and I have little doubt that 5 or 10 years from now we will be using a different protocol. However I firmly believe that the use of peer-to-peer for everything from data transfer to shared CPU power will take the Internet to the next level.

If we look at TV you will already see this trend. Media use in our society is transitioning from someone else deciding what you want (push) to something that allows what you want, when you want it (pull). Right now you turn the TV on at 8pm to watch your favorite show or skip channels until you stumble across something interesting. The future is a demand system where you can buy and watch an episode the network has “released” any time you want. Tivo is a first step in this direction.

Surprising as it may seem, this can be done pretty easily today, but is tied up in complex licensing schemes, conflicts between producers and distributors, and a wide array of selfish interests. Unfortunately many companies use their power and influence to halt and punish innovations they cannot think of ways to make money with. The monopolies tried to stop the VHS, DVD, and MP3 player, but thankfully failed when they took it to Court. Now Imagine for a second all the amazing products they did manage to squash…

Gary from IsoHunt

With so much momentum of content behind BitTorrent, I don’t see it going away anytime soon. Unless there’s a far superior and open protocol that is superior to BitTorrent in efficiency and convenience, for which BitTorrent is pretty hard to beat, I see we’ll like have new developments by extending the existing BitTorrent protocol. Although Bram Cohen talked about Merkle trees as a major revision in improving BitTorrent, and that didn’t go anywhere (at least not in open source). When BitTorrent Inc. do significant enough closed source changes to the protocol, BitTorrent will fork or new open protocols will rise.

For future of BitTorrent sites and IsoHunt, I’ve always been an advocate of open and public access. The more sites try to go underground, the more reasons the authority think there’s something dark at work and more they will take sites down by force – Oink and other private trackers for example. I’ve been blogging about P2P and its economic sense/legitimate use cases for a while (latest one on independent music), and I believe that’s what will give BitTorrent continued adoption and acceptance as a de-facto protocol and internet standard. It’s like the WWW: if people didn’t use the early web for other purposes than for porn (which was prolific in the web’s early days), the governments might have a different view and regulations on the internet now. It’s not what copyright infringement or “piracy” may be occurring, on P2P, BitTorrent or the internet. It’s what new use cases we nurture that benefits both end users and content producers, that will correct the stigma behind P2P and BitTorrent and accelerate their acceptance. Development on isoHunt and our other sites will for sure be done with this in mind.

Peter aka Brokep from The Pirate Bay

First of all, I don’t think it’s easy to predict the future. But I do think that it’s very important to be very promiscuous when it comes to the protocols we use. BitTorrent is currently the best but this might change. There will be other alternatives, not necessarily ours but others will come.

In five years things are probably very different from today, technology wise and politically. The latter thing is the biggest issue, not the technology. I would foresee that streaming is bigger and the companies still try to frame their users to use their locked down systems, maybe not DRM but rather streamed with their clients (like the BT DNA system) which will contain other copyright protection scams.

What do you think?

It’s great to hear the opinions and predictions of the leading BitTorrent admins, but what do you think the future of BitTorrent will be? Will we be all using a new protocol 5 years from now, will BitTorrent sites change, will TV and movie producers embrace BitTorrent?

Let us know!

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.