[LINK] (Bizarre?) Kazaa Settlement

Adam Todd link at todd.inoz.com
Sat Jul 29 20:55:47 AEST 2006

I was going to but thought no one was really interested in my view :)

Anyway, to express it, I think the Plaintiffs have decided they need the 
Kazza concept to actually beat the market, especially with online 
distribution and downloads etc being a core future business.

Kazza is an existing, functional business and operation that works and 
people are familiar with, why destroy it and then invest in making it again.


At 05:33 PM 29/07/2006, Roger Clarke wrote:
>[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 ($151 
>million) to the major record companies and movie studios, which had 
>accused Kazaa of aiding the illegal copying of music on the internet.
>Sharman Networks said the agreement, which follows a court ruling against 
>Kazaa in Australia last year and a US Supreme Court decision against other 
>file-sharing services, cleared the way for it to offer "the broadest range 
>of licensed content over Kazaa".
>The chief executive of Sharman, Nikki Hemming, said: "All the parties 
>involved now recognise the time is right to work together, and we are 
>looking forward to collaborating with the music and motion picture 
>companies to make P2P an integral part of the future of online digital 
>Peer-to-peer network technology, or P2P, allows users to share computer 
>files over the internet, including music and movies stored in digital 
>form. Kazaa was a pioneer of peer-to-peer network software.
>Under the settlement, Sharman would pay the record companies "in excess of 
>$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 very encouraging."
>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 
>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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