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From Milia, Michael Nutley reports on Napster's threat to the publishing, games and film industries.

When Andreas Schmidt, CEO of Bertelsmann's e-commerce group, described Napster as the world archive site for music and suggested that if the US courts could not protect it, the United Nations should, by declaring it a World Heritage Site, the nervous laughter among the Milia delegates suggested that Napster was clearly anything but a joke.

With Forrester analyst Eric Scheirer saying there would always be sites offering free music downloads on the Web, and Forrester Research USA vice president Mary Modahl claiming that young people were habituated to expect online music to be free, Schmidt's bland statements that the music industry needed to respond more quickly to technological change and needed to introduce a new mechanism for copyright control brought little reassurance.

And just in case people in other areas of the entertainment industry were engaging in a little schadenfreude at their record company colleagues' expense, Modahl pointed out the threat also posed to the publishing, games and film industries by Napsterisation.

Although her point was valid, her conclusions were flawed. She suggested books and music were the most at-risk sectors because of the nature of the respective industries and the way the content is produced. In fact, it's purely a question of bandwidth and money.

As soon as broadband arrives and it becomes possible to down-load film or game-sized files in a short period of time, people will start doing it, and P2P networks to let them do so for free will spring up. They will follow the model of Gnutella rather than Napster, being non-server-based, and so all but impossible to shut down by legal means once they're running.

The industries most threatened by such intellectual piracy will be those with the most desirable - that is, mass market - content. So movies and games are most at risk. The film industry knows what the post-P2P future looks like. It only has to think back to the pre-VCR era when its only revenue came from showing films in cinemas and selling them to TV networks. For the games firms, salvation may come in the form of online gaming. If their model shifts from the sale of packaged products, which can easily be Napsterised, to subscriptions to online games, the threat may be minimised.

But the industry with the best chance of avoiding the problem altogether is book publishing. At present, the only people who see books in digital form are the publishers and typesetters. The process of digitising an entire paperback to share the file for free is so time-consuming as to be pointless.

Only if e-books become widespread can the industry be Napsterised. Publishers might regard the cost-savings in producing e-books as a powerful financial incentive. But if they want avoid the problems faced in films, games and music, the only sure-fire solution would be to band together and stop the development of the technology right now.

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Published 15 February, 2001 by NMA Staff

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