RIAA gets $115 million from Sharman Networks, Ltd.

(via boingboing)

Ending a years-long legal battle, the recording industry has settled with Sharman Networks, Ltd., operator of popular Kazaa peer-to-peer software.  Naturally, my first question is “How much of that money is going to the artists that the RIAA told us they were suing to protect?”

Record labels and movie studios won their long fight against one of the most notorious networks for online piracy Thursday, but the deal is unlikely to slow the worldwide trade in bootlegged songs, movies and television shows.

The entertainment industry’s settlement with the operator of Kazaa was hailed as a milestone because it ends an era in which backers of file-sharing networks could make millions of dollars a month luring people to their services with pirated goods.

. . .

Online piracy, meanwhile, continues.

“I don’t think anything has been accomplished here,” said Michael Goodman, a senior analyst with the Yankee Group in Boston. “From a legal perspective, this is a yawner. They won the battle, but the battlefront moved on about three years ago. That’s the problem with court systems. Technology and markets move way faster than courts can typically keep up with them. By the time you win that battle, who cares?”

Kazaa once accounted for nearly half of all online file-sharing, but its popularity has plummeted in the five years since its owners were sued for encouraging piracy.

. . .

Under the terms of the settlement, Kazaa will introduce filtering technologies to ensure that users can no longer share copyrighted music, film or software files. Sharman has paid $115 million to the recording industry, according to sources familiar with the negotiations. Studios received a separate undisclosed sum, reported to be in the tens of millions of dollars.

Sharman Networks issued a statement, saying the agreement cleared the way for Kazaa to offer licensed content.

“The settlement marks the dawn of a new age of cooperation between peer-to-peer technology and content industries which will promise an exciting future for online distribution in general and Kazaa users in particular,” said Nikki Hemming, chief executive of Sharman Networks.

Here’s what that all means

  • Sharman Networks, Ltd. promises to stop people from sharing coprighted material on the Kazaa network (impossible, by the way)
  • The recording industry get $115 to pay lawyers to continue going after music fans who like to hear music before buying (which we all know is illegal, but hard to stop in this age of 98% crap music)
  • Sharman Networks, Ltd. has aspirations to fail in the legal music download business the same way Napster has (with the extra burden of competing against Apple and iTunes)
  • The recording industry and Sharman Networks management types tell people that a new age in licensed digital music distribution is upon us (the same new age that has successfully been built up and practically controlled by the iTunes marketplace)

So we’ll see what happens from here.  Somehow, I doubt anyone on the consumer end will notice.

[tags]RIAA, Kazaa, Sharman Networks, Recording industry, Peer-to-peer[/tags]