In my latest column for Information Week, I talk about the Hollywood attempt to re-create the Napster Wars, suing all the funded, legit companies that want to do Internet video, like YouTube. When the record companies did this to Napster, all it did was ensure that the P2P market was saturated with companies that had no interest in doing deals with the record companies — instead, we got rogues like Kazaa and AllOfMP3, whose business-model was built around the difficulty of being sued offshore, not paying the record companies for the use of copyrights.
Now the TV and movie people are following suit — and there's every chance that they'll succeed at scaring off all the legit Internet distribution companies. Which will just make ThePirateBay into the world's biggest, most successful video distribution system.
Napster had an industry-friendly business-model: raise venture capital, start charging for access to the service, and then pay billions of dollars to the record companies in exchange for licenses to their works. Yes, Napster kicked this plan off without getting permission from the record companies, but that's not so unusual. The record companies followed the same business plan a hundred years ago, when they started recording sheet music without permission, raising capital and garnering profits, and then working out a deal to pay the composers for the works they'd built their fortunes on.
Napster's plan was plausible. They had the fastest-adopted technology in the history of the world, garnering 52,000,000 users in 18 months — more than had voted for either candidate in the preceding US presidential election! — and discovering, via surveys, that a sizable portion would happily pay between $10 and $15 a month for the service. What's more, Napster's architecture included a gatekeeper that could be used to lock out non-paying users.
