The DCIA Tries to Cozy up to the MPAA

[Drake]

On June 17, the Cato Institute sponsored an event that focused on P2P and copyright law. The Distributed Computing Industry Association (DCIA) took part in this event and, once again, demonstrated that their sole desire is to turn the FastTrack network into a pay service.

DCIA CEO Marty Lafferty tried to cozy up to the MPAA during this event by encouraging the MPAA to work with FastTrack to distribute their content. “Mr. Valenti, end the major studio boycott of peer-to-peer. Urge your members to work with us to counter copyright infringement and commercially develop file sharing to its full potential.”, said Lafferty. Lafferty then went on to say, “We do not agree with those who claim that 'swapping movies and music 'without compensating rights holders 'doesn't really hurt anybody’.

It seems that the DCIA is now parroting the same propaganda the RIAA has been spewing concerning file sharing hurting rights holders. It’s clear that they are against the free exchange of information and want to capitalize on their large, but shrinking user base before its too late.

Lafferty went on to say, “DCIA Members Digital Containers, Clickshare, and SVC are adding even more advanced digital rights management and new commerce engines to further distance P2P from the old-architecture centralized download sites favored by the music industry. Our Members Relatable, Predixis, and Shared Media Licensing (SML), are working to address unprotected files entered by consumers into P2P distribution.”

He then went on to propose the following steps:

- Entertainment content inventory (using Relatable software to create
and monitor a fingerprint and file-metatag database).

- Rights holder registry (comprising all interests for each piece of
content, where multiple parties are entitled to remuneration).

- Content verification (matching acoustic IDs with rights holder data to enable revenue allocation -- and the option to have high-quality files supplant inferior ones).

- Rules application (addressing allowable content usage, SML-based user
incentives, and benefit considerations).

- Digital rights management (adding encryption and licensing-features
for open format copies of identified content).

- And payment services (facilitating a range of user-fee collection and
content-provider payment options, from per-unit to actuarial).

Sharman Networks has played a large role in shaping P2P. The RIAA has taken them to court on more than one occasion and tried to make file sharing illegal. They might have succeeded if Sharman Networks didn’t oppose them. Sharman has several anonymous investors and as a result, they have the financial resources needed to fight the RIAA. Many file sharers have supported Sharman throughout their battles with the RIAA, but have always questioned Sharman’s true motives.

It should now be crystal clear that Sharman Networks (the largest group involved in the DCIA) doesn’t give a damn about file sharers. If they did, they wouldn’t be working on incorporating advanced DRM and trying to form alliances with the RIAA and MPAA. If they were to strike a deal with the MPAA, you can be sure that Sharman Networks would do everything in their power to hunt down anyone who is sharing “unprotected” files on their network.

According to Slyck’s statistics, on January 11, 2003 there were 4,194,808 file sharers on the FastTrack network at the same time. On January 20, 2004, that number fell to 3,770,372. On January 30, 2004 if slipped to 3,407,587. The latest statistics show that their average online user base is now 2,479,381.

The FastTrack network has quickly deteriorated and instead of improving their technology, Sharman Networks has spent their time trying to come up with schemes that would make them rich. There’s no reason why file sharers should support a P2P network that wants to add advanced DRM to their network and charge its users. Sharman Networks will always be remembered for their successful battles against the RIAA, but unfortunately they will also be remembered for turning their backs on file sharers.

[Ryoko]

...but unfortunately they will also be remembered for turning their backs on file sharers.

So the largest network that commits sodomitical acts upon current copyright laws has turned its back on the mob of thieves that built it, eh?

Oh, how sweet it is...how sweet it is.

[WitchHunterRobin]

The latest statistics show that their average online user base is now 2,479,381.

It's not that low. The average is still around 2.9-3.2 million. They always seem to get the statistics for the FT network at slow times (i.e., at 3 in the morning) to create the image that the user base has been rapidly deteriorating. I have no trouble finding what I am looking for.

[chacho]

if only sharman execs read this article...

[eclectica]

DCIA = RIAA Lite

Current members from this page:

Altnet
BlueMaze Entertainment
Claria Corporation
Clickshare Service
Digital Containers
Go-Kart Records
Grokster
INTENT MediaWorks
One Love Channel
Predixis
Relatable
Seamless P2P
Shared Media Licensing
Sharman Networks
Trymedia Systems

[SlyckTom]

It's not that low. The average is still around 2.9-3.2 million. They always seem to get the statistics for the FT network at slow times (i.e., at 3 in the morning) to create the image that the user base has been rapidly deteriorating. I have no trouble finding what I am looking for.

If we were losers with nothing to do at 3 am, then you may be right (which makes me question why you are so familar with their stats at 3am...) Otherwise you're just making an invalid assumption.

Anyhow, I usually do them after 7 pm when I have unwinded from work...The times are always there anyway.

[SlyckChuck]

With all the whining the industry does about p2p labeling us as thieves, how appropriate it is to witness the industry yet again stealing the technology they are so bent on destroying. One would have to guess who the real thief is.

[moculon]

if all the industry plans on doing is licensing the same rubbish content to p2p providers as is currently licensed to the rubbish central d/l sites then there is no point, except it'll rake up the costs of broadband to consumers for no real reason. (use their u/l to distribute the rubbish instead of corporate b/w).

however, if it eventually brings compatible, easy to use formats... ie a format my parents for example could cope with downloading, watch with some device on the tv, their portable, and in the car it would be great. some people (most probably?) will pay a fair price for something like that. pirated material of low quality and taking hours to convert, and some degree of experience is a major advantage the legal film business would have if they embraced technology. i may even pay a few dollars to have a copy of a movie i could use in reasonable ways and save myself some hassle. after all your time not spent converting movies is spent at the pub!!

[dcia]

The “sole desire of the Distributed Computing Industry Association (DCIA)” is not as this article asserts in its lead paragraph “to turn the FastTrack Network (FTN) into a pay service,” but rather to foster the commercial development of all P2P (and more advanced distributed computing applications) for legitimate purposes.

The DCIA is technology-neutral, seeking to ensure not only that all three current leading P2P platforms flourish (not just FTN), but also that even newer open-source approaches can legitimately develop as well. The DCIA sees the future as more open, not more closed; more decentralized, not more server-client architected; and more efficient, not more expensive.

This is decidedly not about turning any software application “into a pay service,” but rather, about finding innovative ways, commensurate with all of the implications of these new technologies, to compensate content creators who, in many cases at this juncture, have been left out of the equation. At the same time, the speed, accuracy, and quality of file-sharing software for content delivery will continue to improve.

The distributed computing industry, still barely in its infancy, has rapidly demonstrated remarkable development abilities. Its track record of advancements, particularly with respect to the quality of user experience – in performance, security, convenience, choice, versatility, and more – is already unparalleled in the technology sector.

The only unique danger to P2P software users, which has emerged during this time, is the threat of RIAA lawsuits for alleged copyright infringement. This threat, however, is now expanding, with the MPAA’s launch last week of the second-phase of its explicitly anti-P2P-and-anti-fair-use “education” campaign targeting America’s youth. And clearly the MPAA is now setting the stage to file its own file-sharer lawsuits.

To characterize the DCIA’s demand of the MPAA last Thursday and, in another venue, the RIAA last Friday, to end their boycotts of the P2P distribution channel, as “cozying up,” is certainly an unusual view of that action. And to characterize this as an FTN-only move is plain wrong.

The legitimate business solutions that the DCIA seeks will only be acceptable if they further benefit consumers as well as satisfying content creators. They will most certainly include free-to-consumer options, with higher quality and greater reliability than today’s already very good offerings – but without the threat of entertainment industry lawsuits.

If just half of the resources being spent on litigation and other incarnations of divisiveness, including such overtly destructive actions as file blocking, spoofing, and decoying, were redeployed to creative and constructive solutions, all affected parties would be much better off today.

Rather than as this article maliciously claims, “that the DCIA is now parroting the same propaganda the RIAA has been spewing concerning file sharing hurting rights holders,” the DCIA is now doing real work to develop positive solutions based on identifying and building upon common ground between content creators and their P2P-using fans.

File-sharing distribution and related digital production technologies are and will become even more threatening to major record labels, large performance rights organizations, massive retail infrastructures, and other “go-between” entities who pre-P2P held important places in brick-and-mortar distribution chains. Now, with a narrowing of the space between creators and their fans, these entities may no longer be of value unless they dramatically reinvent themselves.

The DCIA is absolutely not “against the free exchange of information” and totally disagrees that this is about Sharman Networks wanting to “capitalize on their large, but shrinking user base before it’s too late.” This statement attributes an incorrect objective to Sharman Networks and assumes an inaccurate condition of its Kazaa Media Desktop (KMD) user base.

What the DCIA IS against is the unresolved copyright infringement issue that increasingly threatens P2P users and takes resources away from industry advancement.

The solutions the DCIA seeks are more open, not more closed; more flexible, not more rigid; more creative; not more constraining. The DCIA wants to see authorized P2P content distributed in ways that take advantages of the technology’s ability to offer consumers more choices – including ones that remain FREE – not fewer options. This is all about creating more value, not less.

And any “for-pay” offerings need to reward P2P users for the facts that they are paying the bandwidth, storage, transmission, etc. as well as some of the marketing costs.

As the article correctly states, “Sharman Networks has played a large role in shaping P2P.” The DCIA believes that Sharman Networks would appreciate the observation that its opposition to the anti-P2P litigiousness of the entertainment industries has had a strongly beneficial effect. Even more importantly, the DCIA knows that it appreciates the support and loyalty of its users. And its “true motives” have been easily evident and transparent to anyone who has closely observed it during its two years of existence.

It is patently false and the worse kind of slander to say that “Sharman Networks doesn’t give a damn about file sharers.”

There is ample evidence that Sharman Networks’ overriding motive has always been and continues to be to commercially develop KMD for the benefit of consumers. It has focused its efforts on adding new features, launching new releases, improving software performance, and offering its users additional choice and control.

Specifically, it has made such advances as integrating anti-virus software, introducing security safeguards to prevent inadvertent sharing of private information, developing an advanced family filter to enable parents to protect their children from being exposed to undesirable content, and offering the alternatives of an ad-free premium version as well as a continually upgraded ad-supported version.

Sharman Networks wants to solve the one remaining problem in a way that will further benefit its users and all consumers, while also responding fairly to bona fide claims from the creative community, and that is one of the primary reasons it helped found the DCIA.

While DRM and associated technologies are clearly part of many of these solutions, tools for promoting and ensuring fair use are just as important.

Key to any viable solution is that it respects the openness of the Internet – regarding access, standards, and intellectual property. Creativity, honesty and innovation are exactly what are needed in this environment.

The article could not be more wrong in its maligning assertion that “If they were to strike a deal with the MPAA, you can be sure that Sharman Networks would do everything in their power to hunt down anyone who is sharing ‘unprotected’ files on their network.” That would involve a fundamental violation of several of its core principles and could only be claimed by an incredibly ill-informed opponent of the company.

Hollywood has targeted Kazaa almost exclusively in its legal, legislative, and negative PR activities, not only because Kazaa is the largest target and so clearly represents the power of P2P, but also because it believes that, as with Napster, if it focuses all of its powers on victimizing a single player, it will prevail.

That the Kazaa brand is still standing is a testament to at least two factors, neither of which is unusual-investment benefits: 1) the success, despite unprecedented levels of harassment, of Sharman Networks leadership in improving the user experience provided by KMD, and 2) the inexorable power of P2P technology – which is arguably a manifestation of the broader force of technological progress itself.

Sharman Networks has always seen the ultimate role of P2P software providers as legitimate participants on the distributor side of the extraordinary new phenomenon of “super distribution” bringing benefits to both consumers and content rights holders far superior to preceding distribution channels.

The $0.99 per track a la carte price charged by old-architecture centralized music download stores was established to be non-competitive with CD sales so that major labels could maintain their retail price control. It is not a reasonable charge to Internet users and is even more unfair to P2P users.

And any credible solution will have to continue to provide as one of its options for consumers an alternative that is made available at no-charge to them.

After helping launch the DCIA, Sharman Networks has sought neither to control nor subvert its mission, which has been outlined above.

Sharman Networks is now just one of 20 Members in the steadily growing DCIA, including companies who are competitive with Sharman Networks and/or each other, as well as companies who have no affiliation with it at all, but have legitimate roles to play in existing or prospective business solutions.

The DCIA does not advocate untenable positions nor argue disingenuously for solutions that cannot be supported by all affected parties.

Finally, according to P2P usage measurement conducted by BigChampagne, Comscore Networks, Nielsen/NetRatings, and others, FTN file sharing remains robust and steady, and the global market for P2P generally continues to expand at a healthy rate.

Sharman Networks is focused primarily on improving its technology, and will be introducing additional new features, upgrades, plus new-and-improved releases going forward.

It is making multiple efforts to increase its value to its software users, including by supporting the DCIA to eliminate the one unique threat P2P users now face – entertainment industry lawsuits. The DCIA can attest to the fact that Sharman Networks does want to grow its business, but it can also unequivocally state that Sharman Networks does not take for granted the support of its users, to whom it is dedicated to providing an ever-improving experience.

[eclectica]

The article could not be more wrong in its maligning assertion that “If they were to strike a deal with the MPAA, you can be sure that Sharman Networks would do everything in their power to hunt down anyone who is sharing ‘unprotected’ files on their network.” That would involve a fundamental violation of several of its core principles and could only be claimed by an incredibly ill-informed opponent of the company.

What core principles of Sharman Networks would that violate? I would like for you to recite them here.

Such a scenario would be likely judging by how Sharman Networks has already devoted its legal efforts to blocking access to Kazaa Lite and KCeasy; programs which connected to the FastTrack network without generating any money for Sharman Networks. The company is intent on blocking any non-commercialized access to its network.

[Ooble]

That was a very well-formed argument, but too vague in my opinion. As Electica said, what are Sharman's core principles? We are judging them on how they've presented themselves in the past - we can't get into the minds of their staff. From the point of view of a P2Per, Sharman has acted atrociously - please, provide examples of how they've acted for the good of P2P file-sharing without trying to fill their own pockets.

[thats_kiff]

From the point of view of a P2Per, Sharman has acted atrociously - please, provide examples of how they've acted for the good of P2P file-sharing without trying to fill their own pockets.

There are none, Sharman always intented to make money out of Kazaa in anyway possible. Maybe way back when the Kazaa and FT licenses were just purchased by Sharman Networks you could kid yourself into thinking SHarman had good intention's. But if there were any, they have now been devourved by greed and no doubt won't be seen again...

[wayne rosso]

Love the DCIA's post in response to your story. What a pile of horse s**t!!! These guys have no shame whatsoever. It's like some knucklehead buys a house in the neighborhood and then appoints himself president of his own homeowners association. A complete carpetbagger.

[Drake]

To characterize the DCIA’s demand of the MPAA last Thursday and, in another venue, the RIAA last Friday, to end their boycotts of the P2P distribution channel, as “cozying up,” is certainly an unusual view of that action. And to characterize this as an FTN-only move is plain wrong.

On p2pnet, you posted this:

Instead, it is actively conducting “shuttle diplomacy” between parties on all sides, several of whom are involved in serious litigation. Despite the degree of difficulty, the DCIA is making gradual progress with the major players. Specifics of such efforts obviously must remain private pending the outcome of court cases.

Sharman Networks has been trying to entice the RIAA into working with them for a long time and recently – through the DCIA – they have tried to entice the MPAA. It sure looks like they’re trying to cozy up to the enemies of P2P since they are having closed door meetings with them and not trying to protect their users from lawsuits.

Rather than as this article maliciously claims, “that the DCIA is now parroting the same propaganda the RIAA has been spewing concerning file sharing hurting rights holders,” the DCIA is now doing real work to develop positive solutions based on identifying and building upon common ground between content creators and their P2P-using fans.

A statement can not be called a malicious claim when it’s true. Marty Lafferty said, “We do not agree with those who claim that 'swapping movies and music 'without compensating rights holders 'doesn't really hurt anybody’. I did not invent this quote. Many artists would agree that P2P has helped them and several studies/surveys have showed that P2P has not negatively affected music sales. Nikki Hemming used to speak out about how P2P helps artists. I wonder if she agrees with Lafferty’s view of P2P.

The only thing the DCIA is working on is a scheme to profit from P2P and its user base.

The DCIA is absolutely not “against the free exchange of information” and totally disagrees that this is about Sharman Networks wanting to “capitalize on their large, but shrinking user base before it’s too late.” This statement attributes an incorrect objective to Sharman Networks and assumes an inaccurate condition of its Kazaa Media Desktop (KMD) user base.

I would, once again, like to quote Marty Lafferty. “Our Members Relatable, Predixis, and Shared Media Licensing (SML), are working to address unprotected files entered by consumers into P2P distribution.”

This statement alone shows that you are against the free exchange of information since you are working on ways to prohibit the sharing of certain files.

What the DCIA IS against is the unresolved copyright infringement issue that increasingly threatens P2P users and takes resources away from industry advancement.

What resources have been taken away from industry advancement? P2P means peer to peer. Your vision of P2P is not really P2P, it’s a pay service.

The solutions the DCIA seeks are more open, not more closed; more flexible, not more rigid; more creative; not more constraining. The DCIA wants to see authorized P2P content distributed in ways that take advantages of the technology’s ability to offer consumers more choices – including ones that remain FREE – not fewer options. This is all about creating more value, not less.

Nonsense. The DCIA wants to implement advanced DRM. DRM is very restrictive and certainly not flexible. Adding DRM and charging your customers will not provide P2P users with more choices. They will, however, make Sharman Networks and other companies in the DCIA a lot of money. That’s what your struggle is all about – money, not P2P.

As the article correctly states, “Sharman Networks has played a large role in shaping P2P.” The DCIA believes that Sharman Networks would appreciate the observation that its opposition to the anti-P2P litigiousness of the entertainment industries has had a strongly beneficial effect. Even more importantly, the DCIA knows that it appreciates the support and loyalty of its users. And its “true motives” have been easily evident and transparent to anyone who has closely observed it during its two years of existence.

Perhaps you’re right. They have been transparent and we should have known from the start that your true motives were to capitalize and profit from P2P.

It is patently false and the worse kind of slander to say that “Sharman Networks doesn’t give a damn about file sharers.”

Again, it’s not slander if it’s true. Sharman tried to eliminate Kazaa Lite. A hacked program that got rid of the spyware KMD installed on computers. Kazaa Lite allowed P2P users to hide their shared folders before KMD ever had this feature. If Sharman Networks really cared about their users they would be working on ways to protect their anonymity online instead of cozying up to the enemies of P2P.

While DRM and associated technologies are clearly part of many of these solutions, tools for promoting and ensuring fair use are just as important.

DRM is not part of the solution. File sharers will not accept any form of DRM. If you are successful in convincing the MPAA or RIAA to work with you and then implement your advanced DRM, your user base will quickly evaporate. It’s funny that you mention fair use since DRM goes against it.

Key to any viable solution is that it respects the openness of the Internet – regarding access, standards, and intellectual property. Creativity, honesty and innovation are exactly what are needed in this environment.

Intellectual property laws are a joke. They stifle creativity and innovation.

The article could not be more wrong in its maligning assertion that “If they were to strike a deal with the MPAA, you can be sure that Sharman Networks would do everything in their power to hunt down anyone who is sharing ‘unprotected’ files on their network.” That would involve a fundamental violation of several of its core principles and could only be claimed by an incredibly ill-informed opponent of the company.

Lafferty is the one who said that they are working to address unprotected files. You can spin the facts as much as you want, but the quote is there for everyone to see.

That the Kazaa brand is still standing is a testament to at least two factors, neither of which is unusual-investment benefits: 1) the success, despite unprecedented levels of harassment, of Sharman Networks leadership in improving the user experience provided by KMD, and 2) the inexorable power of P2P technology – which is arguably a manifestation of the broader force of technological progress itself.

Baloney. The main reason why Kazaa is still standing is because many file sharers aren’t even aware that other P2P applications exist. Kazaa’s “inexorable power of P2P technology” pales in comparison to what other P2P networks offer.

Sharman Networks has always seen the ultimate role of P2P software providers as legitimate participants on the distributor side of the extraordinary new phenomenon of “super distribution” bringing benefits to both consumers and content rights holders far superior to preceding distribution channels.

Super distribution or super profit? Consumers won’t benefit when Sharman Networks charges them. Sharman Networks benefits.

[wayne rosso]

Well, looks like the DCIA won't be offering to buy their way into Slyck's good graces like they buy their way into "sponsoring" industry events and conferences. Seems like that's the only way they can promote their agenda as the press seems to have caught onto them. Frankly, Anna Nicole Smith could do a better job of making the p2p case. She's actually more intelligent.

[icecold]

I think that one of the reasons that Sharman network pulled kazaa from "download.com" was to show the record industry that they are putting forth an effort to show the recording industry that they are willing to work with them on establishing some kind of pay service. I wouldn't be to surprise if one day you hear that Sharman and the Recording industry has teamed up, and if that were to happen...you can bet your last dollar that they will do everything in their power to put in end to the other p2p network's.

[Bizzare]

Kazaa... the inexorable power of P2P technology – which is arguably a manifestation of the broader force of technological progress itself.

I had to re-read that sentance a few times.. couldn't seem to stop laughing.. When exactly did Kazaa become "technological progress".. I have seen something that I suppose could be labled "the inexorable power of P2P technology", but it was MIRC.. and its a helluva lot older

[mpfenton]

...
It is making multiple efforts to increase its value to its software users, including by supporting the DCIA to eliminate the one unique threat P2P users now face – entertainment industry lawsuits. The DCIA can attest to the fact that Sharman Networks does want to grow its business, but it can also unequivocally state that Sharman Networks does not take for granted the support of its users, to whom it is dedicated to providing an ever-improving experience.

How tedious...

Basically, you claim DCIA wants to stop lawsuits and make everybody happy. Who doesn't want to stop the lawsuits and make everyone happy? Isn't it a bit arrogant to assume otherwise?

I wish they would come to their senses and stop suing people but that ain't gonna happen.

It's not about the music. It's about the musicians.

They want complete control over artists. Anything less they won't accept. What? You think they're just going to hand over their empire to someone else? That's naive in the extreme.

Industries don't make billions of dollars a year by making those kinds of compromises. Get real.