P2P as a Promotional Tool

Some musicians consider P2P file sharing an invaluable promotional tool. One prominent example is Kid A, the highly anticipated fourth album by British rock group Radiohead. Months before the album’s October 2000 release date, bootleg versions of songs from the album began circulating on Napster. In September, the entire album leaked to Napster and was downloaded millions of time by users all over the world. Though some predicted that this would cannibalize sales of the album, Kid A debuted at #1 in the US, UK, France, Ireland, New Zealand and Canada. At the time of the album’s release, Radiohead frontman Thom Yorke told Time Magazine that Napster “encourages enthusiasm for music in a way that the music industry has long forgotten to do.” A similar and more recent example can be seen in New Orleans rapper Lil’ Wayne’s album Tha Carter III. Despite the fact that tracks from the album leaked to filesharing services as early as mid-2007, the album hit #1 on the US Billboard charts upon its release in June 2008. Tha Carter III was also the first album to sell more than one million copies in the US during its first week of sales since 2005. An online survey conducted by the Pew Internet and American Life Project in 2004 found that 2/3 of musicians surveyed felt that P2P posed either a minor threat or no threat at all to their livelihoods.

Users Views

Meanwhile, many users felt that P2P services provided them access to music that was otherwise difficult to obtain, such as unreleased tracks, live recordings and out of print albums. Users also liked the fact that P2P services allowed them to download individual songs from albums without having to pay for the entire album. It has been noted that many of the users who turned to P2P services in the late 90's and early 00's felt that commercial albums increasingly contained only one or two high-quality songs, with the rest of the album padded out by so-called "filler".

The RIAA’s Lawsuit Campaign

Despite the lawsuits against Napster and the other services, the P2P userbase continued to grow (see "RIAA v. The People: Four Years Later Report"). To combat this trend, the RIAA started a lawsuit campaign against individuals in 2003. While the RIAA has the right to enforce its copyright, the tactics used in these lawsuits have been extremely aggressive and resulted in the undue harassment of users, some of whom had never even used a P2P service.

The technique employed entails RIAA agents downloading P2P software and then searching for users who are sharing files whose copyrights are held by RIAA member companies. Once such a user is identified, his or her IP address is noted. The RIAA would initially take the list of IP addresses to ISPs demanding that the ISPs reveal the identities of the users in question. This was done through what is called “subpoena” power. A subpoena is a command issued in a pending lawsuit ordering a person to testify or to produce documents. However, the RIAA issued “subpoenas” without actually suing anyone. Many public interest groups, objected to these subpoenas, because they were issued without judicial oversight and failed to protect the rights of those whose identify was sought. Initially, the courts sided with the RIAA. However, in December 2003, an appeals court ruled that the RIAA could not issue a subpoena without bringing a lawsuit against the user in question and thereby subjecting these subpoenas to judicial oversight. After this decision, the RIAA changed tactics filing “John Doe” lawsuit against anonymous persons identified only by an IP address. It now asks the court to force the ISPs to reveal the identity of the user to whom the IP address is registered.

In February 2007, the RIAA began employing yet another technique. It would identify IP addresses of students who had shared files using their school’s network and issue “pre-litigation letters” to the school. These letters would offer a chance to the students to settle with the RIAA rather than face a lawsuit. The RIAA asked that the universities pass these letters on to students. University response to these letters varied. While some institutions complied, others refused and still others punished students who received these letters. As of April 2007, more than 18,000 lawsuits had been initiated (see "RIAA v. The People, Four Years Later report"). Most of the parties sued did not have the resources to fight the RIAA in court and thus, decided to settle out of court. Settlement amounts have ranged from $3000 to $11,000.

The “Making Available” Theory

We mentioned before that P2P file sharing without the copyright owner’s permission is a violation of the copyright owner’s distribution rights because the uploader distributes a copy of the music to the downloader. What happens if no one downloads a file? Is it an infringement of copyright to merely store a file on folder from which someone might download a file?

According to the RIAA, making files available for others to download (whether in a shared folder or on a P2P network) amounts to a distribution even if nobody actually downloads the file. While this theory, called the “making available” theory, is not supported by current copyright law (which requires that the file actually be downloaded in order to be considered an infringement), the RIAA is currently trying to get courts to recognize it as a form of infringement. To that end, the theory has been used in several cases recently, most notably in a case against Jammie Thomas, a single mother from Minnesota who was ordered to pay $222,000 in damages for making 24 song available for download via the KaZaa P2P network.

If accepted by courts, the “making available” theory poses several problems. First, it is based on a misreading of copyright law, as detailed above. Second, without an actual distribution of the file in question, the copyright owner suffers no harm. Yet, as the Jammie Thomas case illustrates, the copyright owner can still reap windfall damage awards. Third, the theory of "making available" frees owners from the responsibility of having to prove their case in court. Fourth, if accepted, the “making available” theory has implications beyond P2P file sharing--for example, radio broadcasters, including webcasters, could be accused of making music available for copying by simply transmitting that music. Broadcasters could then be forced to seek an additional license for distribution on top of the performance license that they already pay. A recent lawsuit against XM satellite radio shows that this is not merely a hypothetical fear.

Thankfully, recent court rulings have tended to discredit “making available” as a legitimate theory of liability. The judge in the Jammie Thomas case has decided to grant a new trial and reconsider the “making available” argument that resulted in the award.

Conclusion

P2P filesharing provides many independent artists an opportunity to promote their music. At the same time, these services have been used to infringe copyrights prompting record labels led by the RIAA to file lawsuits against infringers. While Public Knowledge does not encourage the use of P2P services for trading copyrighted works without authorization, we feel that destroying P2P technology through litigation is not how the RIAA and its member companies should deal with the problem. P2P services became popular because legal download services failed to satisfy consumer needs and desires. During Napster’s heyday, legal download services had small inventories, high prices and restrictive DRM, which prevented users from listening to music on the devices of their choice. P2P services continue to be attractive to consumers today and the recording industry would be well served if it considered means to monetize music distributed over P2P networks.

The Electronic Frontier Foundation (EFF) and the Berkman center at Harvard University have both proposed new business models that would allow the P2P services and major labels to co-exist. In both cases, this model takes the form of a voluntary licensing scheme. Under these proposals, P2P users could continue of engage in file sharing online for a reasonable fee. This fee could be paid through either an ISP or other intermediary and would be distributed among musicians based on the number of times their music was downloaded online. The EFF predicts that as the numbers of users grow, the revenue for artists and labels would increase. Also, under the EFF model, users who volunteer to pay the license fee would not be targeted by RIAA lawsuits.