Kazaa site becomes legal service

 

File-sharing site Kazaa will become a legal music download service following a series of high profile legal battles.

 

The peer-to-peer network has also agreed to pay $100m (£53m) in damages to the record industry.

 

The announcement follows the release of a music industry report that says more than 20 billion music tracks have been downloaded illegally in the last year.

 

File sharing and music piracy are key factors in the recent decline in record sales, according to the music business.

 

"We have won another battle in an ongoing war," said John Kennedy, chairman and CEO of the International Federation of the Phonographic Industries (IFPI). "We move forward with a spring in our step."

 

Kazaa follows other sites like Napster which now offers legal downloads.

 

Mark Mulligan, an analyst with Jupiter Research said the amount of damages that Kazaa are willing to pay demonstrates how big the service had become.

 

"$100m is half of the legitimate music downloads market in Europe," he said.

 

At its peak the site had more than four million simultaneous users. The Kazaa software has been downloaded 239 million times.

 

Legal fight

 

The decision by Kazaa follows a series of legal wrangles around the world. Last year an Australian court ruled that the file-swapping program encouraged users to breach copyright.

 

The Federal Court ordered Kazaa's owners, Sharman Networks, to modify the software to prevent further piracy.The modifications included a filtering system on 3,000 keywords to prevent users finding copyrighted material.

 

It was unclear whether the move prevented music piracy as many file-swappers stopped using Kazaa in favour of other networks.

 

The illegal music market is huge. A report by the IFPI provides a snapshot of music piracy.

 

It focuses on pirated CDs and illegal music downloads which are either swapped through peer-to-peer networks or downloaded from sites the IFPI says are illegal.

 

The report estimates that 20 billion music tracks have been downloaded. It highlights 10 countries that need to step up their fight in tackling music piracy.

 

Some of the worst offenders, says the IFPI, include Brazil and Canada. The two countries downloaded more than two billion tracks.

 

Other offenders, according to the report, include Italy which the IFPI estimates has 2.7 million illegal file sharers.

 

Counterfeit goods

 

The annual study also estimates that 1.2 billion fake CDs were sold in 2005, the same number as were sold in 2004.

 

"We're not sure whether we should be pleased that it has not increased or displeased that it has not gone down," said Mr Kennedy. "We're not proud or disappointed."

 

The IFPI calculates that the global traffic in illegal CDs is worth $4.5 billion (£2.4 billion), down $100m from 2004.

 

The IFPI points the finger at China as the largest producer of pirate discs. It says that 85% of discs produced in the country are illegal.

 

The IFPI also highlights Mexico as a hub of pirate material.

 

The North American country did not feature in last year's report of worst offenders. But in 2005 the IFPI report that "110 million physical pirate products" were sold in the country.

 

As a result, Mexico has become a focus for the IFPI. Last year the body launched a new initiative called Mexico Plus that saw the IFPI working with the authorities in Guadalajara to close pirate market stalls.

 

The initiative saw the number of pirate CD stands fall by 80% in the city and the number of legitimate music sales rise by more than a quarter.

 

The IFPI has also been fighting music piracy on the web, taking a number of individuals and high profile sites like Kazaa to court.

 

According to Mr Mulligan, some of their efforts are now having an effect.

 

"The market is now fragmenting. Unless you are an ardent downloader it is becoming harder to know where to go," he said.

 

Services like iTunes, Yahoo Music and Wippit offer an alternative.

 

The IFPI say the legitimate download market now consists of over 360 sites offering three million tracks for download.

 

The legal download market last year was worth $1.1 billion globally, they say.

 

Watch out, the IFPI are about.

http://news.bbc.co.uk/1/hi/technology/5220406.stm

They gave in to the Man...:P

One word!

BitTorrent

What they don't understand that illegal file sharers spend MORE on music than legal file sharers.

 

You get sent a couple album tracks, you listen you like, you go out and buy the cd.

Yeah, but they don't see it that way, I mean damn they don't know the first rule of business!

Don't treat your costumers as criminals.

But I'm sick of it, cuz it's pointless to prove anything to them.

I just wonder where do they get the money for sueing.

What they don't understand that illegal file sharers spend MORE on music than legal file sharers.

 

You get sent a couple album tracks, you listen you like, you go out and buy the cd.

 

exactly. thats what i did with coldplay.

What other bands wouldn't you have found out about if you didn't sample their music from before hand?

They are just alienating their consumers more and more from them.

What they don't understand that illegal file sharers spend MORE on music than legal file sharers.

 

You get sent a couple album tracks, you listen you like, you go out and buy the cd.

 

you're right. i download music, listen to it .. do i like it? if so i usually buy that bands album or something. i think there is nothing wrong with that.

 

legal downloads are ridicuously pointless to me, music is all the more fun when you have a hard copy, an official copy of the CD, a digital download is just like a sample and still seems highly fake as there is nothing official that comes with it.