Stop Press: Kazaa Gets in Bed With Labels Shocker

OK, once again my blog posts are like busses….nothing for a few weeks and then three in 1 day. There’s good reason….Kazaa have settled with the music industry in their gargantuan and long running disagreement. But what is so startling is not so much the settlement (100 million dollars which is more than half of the legitimate European digital music was worth in 2005) but the course that Kazaa is going to take.

Kazaa will be going legitimate, which of course isn’t an entirely new avenue for file sharing networks that have fallen on hard times (Napster was of course a trailblazer for this strategy). But what is key here is that the labels are reportedly taking a stake in Kazaa, which illustrates just how important a partner they consider Kazaa to be and what sort of aspirations they have.

I have a few questions and reservations though:

1 – This is about 2 years too late. Kazaa isn’t what it used to be. Whilst all the behind the scenes legal wrangling has been going on Kazaa’s reputation among the file sharing community has plummeted to potentially irreversible depths. Sharman Network’s strategy of Spyware bundling with the Kazaa app resulted in massive consumer backlash (the ironic highpoint / nadir of this was Sharman successfully evoking the DMA against Google for posting links to rival spware-free Kazaa downloads). So it is questionable just how useful and large this new audience will be and also there are concerns about what such an association will do to the reputation of the music industry.

2 – This is brave move in itself, but will the labels be really brave and go the next step by introducing a system that doesn’t replicate current DRM distribution models but allows continuation of free consumption with innovative DRM optimized to trigger purchase for interested consumers? For example, my colleague Benjamin Lehmann suggested that the OMA (Open Mobile Alliance) standard could be applied to the PC space enabling time / play-limited tracks and even potentially ‘seperate delivery’ of content and rights. This would enable consumers to distribute and pass on the content an infinite number of times, (which of course is exactly what file sharing is about) and the consumer would refer back to a central server to enable various degrees of rights packages.

3 – There is a danger that this route to legitimization of file sharing networks will [further] encourage would be digital music companies to opt for developing an illegal file sharing network in order to bring themselves to the negotiating table with labels. I bet Paul at Wippit is wishing he’d done this now instead of playing the game by the labels’ rules.

4 – Will Niki Heming get her house back?