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Swapping goes legal

Topher Hopkins listens to music on iTunes on his Apple Powerbook laptop Wednesday, in Eagle Rock, Calif. The major recording companies have begun taking steps to legitimize peer-to-peer, or P2P technology. (Associated Press / The Spokesman-Review)
Associated Press
Topher Hopkins listens to music on iTunes on his Apple Powerbook laptop Wednesday, in Eagle Rock, Calif. The major recording companies have begun taking steps to legitimize peer-to-peer, or P2P technology. (Associated Press / The Spokesman-Review)

LOS ANGELES — Four years after it shuttered the original Napster with a legal assault, the recording industry is taking a different approach to online file-swapping: If you can’t beat ‘em, join ‘em.

Recording companies have begun taking steps to legitimize the peer-to-peer technology that lets computer users share songs, video and other files with one another online.

However the U.S. Supreme Court rules in a file-swapping decision expected as early as today, the technology appears irrepressible.

In the last few months, major record labels have signed licensing deals with companies working to field file-swapping services that would block unauthorized files from being traded online.

“There’s only two options here,” said Michael Goodman, an analyst at The Yankee Group market research firm. “You either license it — and you find a way to license it and monetize it — or you don’t license it and it gets traded anyway.”

Some 330 million tracks were purchased online last year from online stores such as Apple Computer Inc.’s iTunes. But around 5 billion were downloaded from free file-sharing networks, he said.

Meanwhile, recording companies have sued 11,700 computer users for file-swapping. Of those, 2,500 cases have been settled, typically for about $3,000 each.

The Supreme Court is considering whether companies behind unrestricted file-sharing services — Grokster and Morpheus — should be liable for copyright infringement. The case’s outcome could speed the way for licensed peer-to-peer services.

Even so, it remains to be seen whether those industry-endorsed alternatives can attract people who now tap open file-swapping networks using such programs as eDonkey, BitTorrent and Kazaa.

“When it comes down to it, why is somebody going to pay for something they can get for free?” said Mac Padilla, 21, a student who lives in Los Angeles.

The industry may know the answer at least in part as early as next month, when Peer Impact, one of the licensed file-swapping services, is slated to launch.

Its software can be used to find and purchase tracks from an initial catalog of a half-million songs from all the major labels, said Gregory Kerber, head of Saratoga Springs, N.Y.-based Wurld Media Inc., the firm behind the service.

After a user buys a song from Peer Impact, future buyers get it from that member — or others who have gotten it in the meantime — instead of from a central server. Users have to pay for each track they download, but sharing songs they’ve purchased from Peer Impact earns them credits they can spend on the service.