From foe to friend: Kazaa founder turns music piracy crime fighter

[DaBees-Knees]

http://www.theage.com.au/digital-life/mp3s/from-foe-to-friend-kazaa-founder-turns-music-piracy-crime-fighter-20090821-etgj.html

A few short years ago, Kevin Bermeister was the music industry's public enemy number one, pursued by lawyers and private investigators over his file sharing business Kazaa. Now Mr Bermeister, who paid out a reported $150 million in a 2005 legal settlement with the majors, has created a new weapon against music piracy that could make him the industry's new best friend.

Called Copyrouter, it is technology that detects when a user is trying to download a copyright-infringing version of a song from a peer-to-peer file sharing network, and replaces it with a legitimate – paid – version. The user is asked before the download if they agree to pay for the copyright-protected version through their next monthly ISP bill.

In an ongoing Australian trial, preliminary results revealed yesterday suggest around 30 per cent of the diverted transactions result in the user agreeing to pay. The idea is the technology could ultimately be rolled into an “all you can eat” or subscription model for music bundled with the bill from your internet service provider (ISP).

“When I started Kazaa in 2001, we went to the music industry and said 'We think we can move piracy to a paid model',” Mr Bermeister said yesterday. “That's how we started. We got in trouble because we got too close to the piracy, because the industry wanted to make a point, because of a variety of reasons.

“But in the end we remain very focused on what we believe is the driving factor behind consumers that use P2P and that's convenience... people drift towards the most convenient solution.”

Not just the free one?

“It's powered by free, but if it wasn't convenient it wouldn't matter, people wouldn't go to it even if it was free.”

He argues that ultimately consumers, rights-holders and ISPs will benefit from consumers paying for content, dismissing privacy concerns by pointing out that Copyrouter only looks for “absolute acts of infringement”.

The technology, developed by Cisco, works at local ISP level by identifying the unique bit sequence that exists in a particular file. If that file is an infringing copy of a song, its number is stored on a database, owned by Bermeister's company, called the Global File Registry.

Up to 300 infringing versions of copyrighted songs may be “mapped” to the one legitimate copy, so when a user attempts to download an infringing copy, they are automatically steered to the legitimate version.

Mr Bermeister, who runs his US company Brilliant Digital Entertainment from his home in Sydney, announced the preliminary results of a three-month Australian case study involving 8000 customers of three small ISPs at the Australasian Music Business Conference at Olympic Park yesterday.

“The labels are very excited and anxious to see something come to fruition,” Mr Bermeister said. “The ISPs are cautiously optimistic and I think deservedly so.”

A US trial of the system is expected to begin later this year.

Privacy advocates are sceptical about the anti-piracy service.

“This is a silly way of going about it – it presupposes that people don't know what they're doing is wrong and in most cases they do,” said Geordie Guy, spokesperson for Electronic Frontiers Australia. “An ISP ... has no right to be interfering with what people are doing online. This is just another one in a string of recent attempts by individuals formerly associated with businesses that were doing the wrong thing to get on the right side of the industry. We saw it with Napster too.”

Kazaa was relaunched in July for US consumers only as a paid file-sharing service.

This system brings up a few interesting questions. One of which is, how far can an ISP, or site, legally divert a legitimate request by a user?  Particularly if they are doing it for profit. Virgin Media in the UK recently added paid advertisements to an "ERROR 404" message. Be sure that in both these cases they are doing it to make money to which they are not entitled. If you equate it to the post office. It's the same as someone opening any orders that you post and diverting them to a company that the post office owns. I can't see many people standing for that and I am certain that it would be considered totally illegal.  

[GhostShip]

What the headline does not make clear is that Kevin Bermeister the guy claiming all the credit for kazzaa actually licenced the technology after it was set up by others who actually designed the system and authored the code.

Niklas Zennstrom and Janus Friis have made a small fortune out of P2P. The Swedish duo formed Kazaa and FastTrack as well as several companies connected with the network. They have been responsible for licensing the code to iMesh, Grokster and StreamCast. Court documents show that they take up to 40% of the revenue of Kazaa. The industry estimates that Sharman earns $175 million from their P2P application annually. If this is the case then the Zennstrom and Friis may be sharing up to $70 million from Kazaa on an annual basis.

Just another fat-cat business guy sponging off the work of others, nothings changed I see.