[LINK] (Bizarre?) Kazaa Settlement
Roger.Clarke at xamax.com.au
Sat Jul 29 17:33:35 AEST 2006
[No-one else has posted this, so I guess I'd better. 5 years on,
with tens of millions having gone into the pockets of lawyers, the
music industry appears to have finally understood what Kazaa was
actually all about]
Kazaa forced to play a new tune
The Sydney Morning Herald (reprint from the NYT)
Date: July 29 2006
Eric Pfanner in London
THE music industry and Hollywood movie studios have settled lawsuits
against a long-time nemesis, the owner of the digital file-sharing
network Kazaa, which will try to transform itself into a
royalty-paying online distributor of films and music.
Sharman Networks, a privately held company that is incorporated in
Vanuatu and operates Kazaa from Australia, agreed to pay $US115
million ($151 million) to the major record companies and movie
studios, which had accused Kazaa of aiding the illegal copying of
music on the internet.
Sharman Networks said the agreement, which follows a court ruling
against Kazaa in Australia last year and a US Supreme Court decision
against other file-sharing services, cleared the way for it to offer
"the broadest range of licensed content over Kazaa".
The chief executive of Sharman, Nikki Hemming, said: "All the parties
involved now recognise the time is right to work together, and we are
looking forward to collaborating with the music and motion picture
companies to make P2P an integral part of the future of online
Peer-to-peer network technology, or P2P, allows users to share
computer files over the internet, including music and movies stored
in digital form. Kazaa was a pioneer of peer-to-peer network software.
Under the settlement, Sharman would pay the record companies "in
excess of $US100 million", said John Kennedy, chief executive of the
International Federation of the Phonographic Industry in London.
Executives who were briefed on the agreement said the total payment
was $US115 million; they did not provide a breakdown of payments. No
details of the settlement with the movie studios were available.
The music industry federation said Sharman had agreed to license
music from the four major recording companies - Universal Music
Group, Sony BMG, Warner Music and the EMI Group - that own the
majority of music copyrights. Independent record labels weren't
included, but would be free to pursue their own licensing deals with
Sharman, executives said.
Sharman also said it would take steps to prevent unauthorised
distribution of material through Kazaa.
"We are under no illusion that this solves everything," Mr Kennedy
said, noting that other file-sharing services thrive. "But this is
Under the agreement, the major recording companies would not invest
directly in Kazaa but will be entitled to 20 per cent of the proceeds
of any eventual sale of the service, Mr Kennedy said, giving them a
stake in the success of the new arrangement. Music company executives
welcomed the settlement and Universal said it would share the
proceeds with its artists.
David Munns, vice-chairman of EMI Music, said in a statement: "While
the award may seem like a vast pot of money, it will merely offset
the millions we have invested - and will continue to invest - in
fighting illegal pirate operations around the world and protecting
the works that our artists create."
In making the switch to a licensed, royalty-paying business, Kazaa
would follow Napster, one of the original file-swapping services,
which was reborn after an adverse court ruling in 2001.
Kazaa has been earning revenue primarily from advertising, and Mr
Kennedy said the recording industry would not object if it persisted
with an advertiser-supported model, rather than charging users, as
long as it pays royalties.
The New York Times
Roger Clarke http://www.anu.edu.au/people/Roger.Clarke/
Xamax Consultancy Pty Ltd 78 Sidaway St, Chapman ACT 2611 AUSTRALIA
Tel: +61 2 6288 1472, and 6288 6916
mailto:Roger.Clarke at xamax.com.au http://www.xamax.com.au/
Visiting Professor in Info Science & Eng Australian National University
Visiting Professor in the eCommerce Program University of Hong Kong
Visiting Professor in the Cyberspace Law & Policy Centre Uni of NSW
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