The Discerning Downloader

Those who have read this blog before know that I strongly believe that the Big Content industries' major weakness in the fight against file sharing is that they lag behind consumers in their exploration and exploitation of new technologies. A recent survey from TorrentFreak seems to confirm that.

The survey shows that uTorrent has made massive gains in market share among file sharers (now enjoying over 60% share), primarily at the expense of Vuze, the second most popular Bit Torrent client (now with about 14%). So, what, you ask, does that have to do with the tech savvy-ness of file sharers? Well, one of the main draws of uTorrent is its extremely small footprint, consuming as little as 14 MB of RAM while downloading. Vuze, the former number one Bit Torrent client, by comparison, requires approximately 80 MB of RAM. The huge uptick in market share for uTorrent tells us that either: 1) the average Bit Torrent user now understands that minimal RAM consumption allows them to download files "in the background" while performing other tasks, without experiencing degradation in system performance; 2) the average Bit Torrent user is easily influenced by word of mouth and uses uTorrent because someone who understands #1 told them to; or 3) some combination of #1 and #2.

Whether by true understanding or by influence, the file sharing legions are coming to embrace not only free content, but also the most efficient means of obtaining that content. This growth of efficient client usage will permit more users to remain online while they perform other computer-based tasks, both allowing them to download more and, likely of more concern to the industries, make greater numbers of files available for download by others.

This is yet another sign that the real issue facing Big Content is the gap between their understanding and usage of technology and that of their (former) consumers. Until that gap is spanned, the downward slide of content sales will continue.

A Generation Lost: How the Music Industry Lost 30 Years or So of Income

A research study released today in Great Britain shows that, despite knowing that downloading music is illegal, young people 14-24 continue to download music by whatever technological means available (see original story below). These studies seem to pop up monthly, while the lobbyists and paid-for politicians on either side of the Atlantic try to legislatively put their fingers in the dike. The content industries need to realize that they have complacently fallen so far behind technologically that they simply cannot, and will not, recover their old business model for at least a generation.

For decades, consumers happily rushed to stores to buy the latest releases from their favorite bands. From Elvis to Bill Haley, Buddy Holly to the Rolling Stones to Nirvana to Blink-182, people wanted their tunes and they were willing to pay for them. The portable record player gave way to the car 8-track player. Enter the Walkman, and then the Discman. Then, in the late 1990's some inventive and intelligent folks outside the music industry realized a vast improvement in the solution to the music portability puzzle that had so clearly intrigued people over the previous generations. Along came MPEG Layer 3 technology - you know it as MP3 - and what was a stroll became a sprint en masse.

First players like the Rio took slow steps into market acceptance. Then the Yepp player did the same. More tech savvy citizens got into the mix and along came Napster. The sprint was now a rushing stream. Up went Internet bandwidth, along came Kazaa and the iPod...and then the stream became a torrent - Bit Torrent to be exact. Over the course of less than a decade, the content industries stood by, heads in the sand while technology created by individuals and corporations alike realized all of the ease-of-distribution dreams that the content industries had always dreamed of. Every person in the world could quickly receive a copy of what they had long been willing to pay for. They could take that copy with them anywhere they went - and they wanted to do so. And the content industries stood idly by, deer in headlights, heads in the clouds...the euphemisms go on and on.

Had the industry recognized the changing tide, they would have been able to harness the wave and ride it into an explosion of success and far greater distribution. But instead they turned their backs one year, fought with all their might the next, and shrugged their shoulders the next. What was left? An entire generation who was raised on free, easily distributed, easily duplicated music and movies. Music and movies that these consumers still want.

The content industries will not recover these consumers as paying customers. It simply won't happen. Well, unless they can come up with a technological methodology to put the genie back in the bottle. Suing customers has proven costly and ineffective. Occasional talk of "educational endeavors" to apprise young people of the copyright laws have gone nowhere. And legislation will only breed more cynicism, cost more money, and lead right back to suing or pushing for prosecution of customers.

The only answer is to use all of that money and might to develop new technologies that once again make the industries' products ones that the customer must buy if he or she wants to obtain it. Until then, customers - teens and twenty-somethings - who have grown up with free music and movies at their fingertips will have no reason to change their thinking. Try telling people that we're now going to drive on the left side of the road or that they will have to use coin-operated telephones at home. Simply put, it just doesn't compute. And for a whole generation who got loose from the gates while the industry snoozed, music will always be free and the old way simply won't make sense.

The content industries can regain their paying market. It just isn't going to happen in this generation unless they start being as smart as those who have slayed their previous model and develop another model that proves that paying for the music consumers love is a necessity, not an option.

Link: Original Times Online Story: Young people ignoring attempts to combat illegal music downloading

"Making Available" Is Not Enough for the RIAA to Show Infringement

I was recently interviewed for a story in EcommerceTimes.com discussing the District of Arizona's decision in Atlantic v. Howell, the latest RIAA file-sharing case to make it to a trial court. While the court's holding in its denial of summary judgment is not Earth-shattering, it does slightly alter the landscape on which the RIAA will work going forward.

The court's holding, requiring actual distribution for a showing of infringement, certainly weighs against the RIAA’s “making available” argument. This is not the first time that the argument has been shot down. The RIAA bases the “making available” argument largely upon a Fourth Circuit case called Hotaling v. Church of Jesus Christ of Latter-Day Saints. They can’t seem to find any other case that clearly says that infringement can occur without actual distribution. That case involved a library making microfiche copies of books and the decision seemed to be largely policy based. Its use by the RIAA has been unsuccessful in other cases and it failed in Perfect 10 v. Amazon where the plaintiff also tried to argue that “making available” constitutes distribution.

In Atlantic v. Howell, the court is essentially saying that the RIAA can absolutely prove that files were available from Howell’s computer via Kazaa. However, because there’s a question as to who made those files available through Kazaa, there’s a genuine issue of fact and summary judgment is inappropriate.

The court also emphasizes that infringement requires a copy to change hands between unauthorized parties. That express statement by the court is the biggest loss for the RIAA here, but it doesn’t stop their cause.

This holding is useful by other people in fighting summary judgment, but it may not save them from an ultimate finding of infringement. The court seemed to disagree with the Electronic Frontier Foundation’s opinion that MediaSentry’s downloading as part of the RIAA’s investigation cannot constitute distribution because MediaSentry is an authorized agent of the RIAA and therefore cannot infringe RIAA members’ own copyrights.

The bottom line is that Howell may make it more difficult for the RIAA to win on summary judgment, but it won’t completely get defendants off the hook. The “making available” argument is moving in the direction of being a confirmed loser. But, by this court’s logic, MediaSentry’s act of downloading may be sufficient to complete the act of distribution by the defendant. If that argument holds up at trial, the RIAA still wins.

Universities Catching on to Traffic Shaping for Peer to Peer Prevention

Last year I gave a presentation on the potential liability of universities and employers for copyright infringement stemming from peer to peer file sharing by students and employees. In my comments I advocated that universities and employers protect themselves by instituting policies of blocking such network traffic by closing ports known to be used for this type of activity. In the time since, many universities appear to have elected to slow the tide of peer to peer file sharing by using network traffic shaping instead (see, for example: link). While this practice is in the spirit of stopping illegal downloading by students, it is treading on dangerous ground in the face of a largely failing RIAA legal attack against students, which may soon realize it can turn its focus toward the universities' deeper pockets as contributory infringers.

I commented several months ago that I see at least one argument that could be used to show that universities forfeit DMCA safe harbor protection by engaging in traffic shaping. The traffic shaping practices that have become seemingly commonplace over the last several years give the universities undeniable knowledge of the type of activity occurring on their networks. Network administrators in charge of traffic shaping implementation must periodically review the efficacy of their policies and procedures. In doing so, they review the statistics related to the shaped traffic. Because the network using traffic shaping often segments particular activity - such as file sharing - for special handling, the network statistics now present to the administrator, and the university by respondeat superior, clear data regarding the improper activity occurring over its network.

17 USC § 512(a)(2) provides:

(a) Transitory Digital Network Communications.— A service provider shall not be liable for monetary relief, or, except as provided in subsection (j), for injunctive or other equitable relief, for infringement of copyright by reason of the provider’s transmitting, routing, or providing connections for, material through a system or network controlled or operated by or for the service provider, or by reason of the intermediate and transient storage of that material in the course of such transmitting, routing, or providing connections, if—
***
(2) the transmission, routing, provision of connections, or storage is carried out through an automatic technical process without selection of the material by the service provider

Universities using traffic shaping to slow file sharing without stopping it are now inserting human oversight into their technical processes. Content deemed to be infringing is "selected" for slower transmission. The practice of network traffic shaping may be bringing universities dangerously close to the line of contributory infringement for illegal downloading by students.

Audio Available: APLF Presentation on Secondary Liability for P2P File Sharing

The audio recording of my presentation "Secondary Liability of Network Providers for Copyright Infringement through Peer-to-Peer File Sharing" is now available through the website of the Association of Patent Law Firms (APLF). Full event details can be viewed here. The PowerPoint presentation is also available.

• Link: www.aplf.org/events/roundtables/2007-02-22.shtml