Trend: Illegal File Sharing Sites Go Legit

The interesting trend, here, though, is that a lot of companies and services that were previously known for being 'illegal' hubs for file sharing are now trying to go legit. Napster, the grandfather for Kazaa and most of its brethren, is now a respectable paid service, and the Pirate Bay may offer a legal version of its service soon.

As Eric Pfanner pointed out in the New York Times, we are now getting to the point where using legal services like Spotify or Lala are actually so much more convenient than illegally downloading music. Given this trend, it makes sense for centralized services like Kazaa to slowly drift to a legal model. At the same time, decentralized file sharing options like BitTorrent, which don't depend on a single company to work, will still continue to be popular. Chances are, though, that users will probably share less music through torrents over the next year or so, as more cheap and free options allow users to legally access music more conveniently.

Hard Drives, Best Buy, Kazaa, Terrastar, and Soft Drinks

There are considerable holes in Thomas' story, however. Among other things, she took her computer to Best Buy to get her hard drive replaced under warranty, exactly two weeks after MediaSentry informed her that she had been caught sharing these files. She then went ahead and brought this new drive in as evidence and swore under oath that the hard drive had been in the computer since 2004. According to a witness from Best Buy at today's trial, the drive must have been dead when Thomas took it in for repair, but it would be impossible to tell if she broke it accidentally (as she claims), or if this was done on purpose (breaking a hard drive is pretty easy, after all).

During the first day of her retrial, however, an expert witness who examined Thomas's computer also noted that an external hard drive had been hooked up to the computer, a fact that was new to the defense attorney.

Thomas' defense lawyers also produced a list of Thomas' purchases at Best Buy, but, as our friends at Ars Technica point out, if this was meant to show that Thomas was still buying a lot of music, this plan backfired, as she had bought a lot of soft drinks (seriously?), DVDs, and video games at Best Buy, but only one CD.

Thomas also generally used 'terrastar' as her handle, and the files on Kazaa were shared under that name. Given that Thomas' computer was password protected, what's the chance of somebody else using her login? In addition, Thomas also claims that she had never heard of Kazaa before this whole affair began.

It will be for the jury to decide if she is really guilty of these charges (judging from what we have seen, our best guess is that she will be found guilty), but the real problem isn't even really about her guilt or innocence. The real question here is if she really inflicted over $200,000 in damages by sharing 24 songs, as the music industry claims (or any damage at all). When the previous judge, Judge Michael Davis, Chief Justice of the Minnesota District Court, granted Thomas this retrial, he argued that the actual cost of the songs would be under $54 and implored Congress to address these damages, which he considered disproportionate, especially because Thomas didn't try to profit from her act.

1. Not all P2P downloading is illegal. Some people may be downloading a digital copy of an album or single that they own, a practice called format-shifting that the recording industry has said they won't sue for (and theoretically exists within fair use guidelines).
2. Do the numbers include fake MediaDefender files people are downloading? If a person downloads 5 fake tracks before finding the one they're looking for, is that 6 downloads or 1?
3. Some people download solely to improve share ratio on BitTorrent sites, but don't actually have any desire for the files they're downloading.
4. People are obsessed with discographies and might download an entire set of albums when they really only want one or two songs.

I would add that there is a fifth reason that TorrentFreak failed to mention, which is perhaps the most important reason why illegal downloads don't equate to lost sales. People download music they wouldn't pay for. Not all of the music people download from P2P networks is music that they would buy in stores or via legit download sites were the downloading option not available. Many times people download music that they hear in passing simply because they can, but not because they like it enough to buy it (in fact, it is precisely that they don't like it enough to buy it -- just enough to hear a few more times -- that they download via Kazaa or BitTorrent instead of pay for it).

In fact, I'd go so far as to guess that the majority of music people download via P2P networks is not music they would buy in stores. Further, a recent study showed that P2P downloading actually leads to more purchases of CDs in stores. We've set up a poll below to test that theory. For anyone who has ever downloaded music illegally via a P2P network, please respond to the anonymous poll below.

There was one thing the IFPI definitely got right in their annual report. "Progress in the digital music market is being hampered by lack of interoperability between services and devices," they wrote (emphasis mine), hinting that DRM that ties consumers to a specific devices or service is bad for the industry. This is something that consumers have long been aware of, and that the record labels are finally starting to catch on to.