February 1, 2006 4:00 AM PST

File-swapping leaders nearing D-day

The young chief executive of MetaMachine, distributor of eDonkey file-sharing software, appeared six months ago before a U.S. Senate committee and said his network--the world's most popular--was ready to turn over a new leaf.

Now Sam Yagan and his company are nearing the point when they'll have to deliver on that promise.

Music industry insiders say that pressure is building for eDonkey's makers and other peer-to-peer software companies to reach a final deal with record labels, turning off the free music and movie swapping that has gone on long after Yagan said it would stop. Yagan himself declined to give details on negotiations, but says he's hoping to have a final deal soon.

"I honestly had expected everything to move more quickly," Yagan said. "We look forward to a settlement (with the record industry) very soon. It's not months away, that's for sure."

News.context

What's new:
Companies that make and distribute file-sharing software are under increasing pressure to settle their disputes with the record industry, which has been cracking down on illegal downloads of music and videos.

Bottom line:
Peer-to-peer software companies can shut down, merge with or be acquired by an existing online music service or devise ways to prevent illegal downloads and allow users to pay for the files they swap. But the software companies point out that converting to a legal, industry-sanctioned service can be very expensive.

More stories on this topic

eDonkey is the largest of the peer-to-peer software companies that have yet to make official peace with entertainment companies. But many others, such Lime Wire and BearShare, are at the same critical juncture, and the decisions their executives make over the next month could transform the face of file swapping.

The companies are facing recording and movie industry attorneys emboldened by last summer's Supreme Court ruling saying that file-swapping services could potentially be held liable for people who use their software to download movies, music and software illegally.

In September, the RIAA sent a round of cease-and-desist letters to big file-swapping software companies threatening imminent litigation if they didn't agree to settle and change their business models. A few, including Grokster, WinMX and I2Hub, have since closed their doors.

But the 28-year-old Yagan is among the few who have tried to keep their services alive while figuring out how to morph into industry-approved businesses.

It hasn't been easy.

Narrowing options
With the threat of an expensive lawsuit looming in the not-so-distant future, eDonkey and its peers have only a few choices in front of them. They could shut down. They could sell the company or merge with an existing or planned online music service. Or, as Israel-based iMesh has done, they could try to build a service that filters out unauthorized swaps and charges consumers fees.

eDonkey has been in talks with existing and planned legal peer-to-peer services, according to sources familiar with the discussions. iMesh Chairman Bob Summer declined to comment on specific negotiations but said his service is eager to acquire the user bases of other file-swapping companies, such as eDonkey.

CONTINUED: Trying to go legit…
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28 comments

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Whack-A-Mole
This is funny.. Napster - WinMX - Kazaa - Edonkey

Doesn't really matter, they're all the same and there will always be another ready to take the place of the exiting service.
Posted by bobbutts (21 comments )
Reply Link Flag
That's right..
..bobby-o! Heck, I haven't used clunky e-donkey in atleast two years.
Posted by lewissalem (167 comments )
Link Flag
Mashboxx is Vaporware
John you keep on writing that Mashbboxx is a legitamate service but Mashboxx has'nt even made it to a closed beta stage as yet Mashboxx is Vaporware as it currntly stands.

Mashboxx sent me an email saying they have had unavaidable delays in getting to beta .Wayne Rosso promised the service would be avalible November last year and that was after he promised it would be avalible in September last year and IMesh is a Musicnet Store with a crippled Gnutttella p2p client tacked onto the end of it .

Peer Impact is the only sucessful industry aproved Peer to Peer service that is up and running .
Posted by matt_ (5 comments )
Reply Link Flag
Where are people supposed to find oddball stuff
I like Blugrass Music. Yet services such as iTunes for the most part stick there nose up at such. I'm not talking about todays stuff, I Am talking about stuff from 40's 50's 60's and so on. I' am will to pay a fee similar to iTunes.

But, some stuff just can't be found.
Posted by pjonesCET (42 comments )
Reply Link Flag
It's Generational.
The legal paid for mp3 services have constantly taylor their online music libraries for today's younger generation or else they don't get enough new customers and become irrelevant and lose profits. They have to do this all while not alienating the general public at large. This is the way the music and entertainment industries work.

The older generations can find plenty of their own blugrass and 50's - 80's classic pop, rock and soul tunes on the paid for mp3 sites like Rhapsody, mp3.com and iTunes for $9.99 per month and $.99 per track.

And BTW sure it can be found eventually you just have to keep on waiting searching for the post to appear. :)
Posted by msims (66 comments )
Link Flag
When It Can't Be Found
I agree; older music and genres that aren't part of the main stream/Top 40 lits are going to become extinct to those of us that enjoy them. That, for me, is the really sad part of this entire P2P issue. When I actively participated in file sharing, before the legal issues became clear and I stopped, I found some amazing recordings that I either had never heard or cannot be purchased. One such item was a recording of the announcement of the death of a major music performer as it was announced on a radio station in Europe over 20 years ago. Now, I don't know who originally got this broadcast recording to post it, but for me being a major fan of the musician it has been a treasure! I dare say things like that will no longer be available under any P2P or pay-to-download service be it iTunes, Peer Impact, etc. That's just sad.
Posted by Teched to Death (5 comments )
Link Flag
so true.
People have pirated games for decades which have always pushed the boundries of network traffic and user desire to get.

mp3s are simply smaller and more mobile, there's no way the RIAA will be able to stop this. At the very bottom of it are emails. If the users want, they will be able to exchange mp3s over email.
Posted by CaughtThinking (5 comments )
Reply Link Flag
Everyone wants to roast the chicken...
... let's see if the the chicken itself wants to get on the spit. =)
Posted by cxar71 (13 comments )
Reply Link Flag
Convenience = 2 orders of magnitude
Before Tivo I could have programmed my VCR to tape all my favorite shows, swapped in tapes at the appropriate time and essentially achieved similar performance.

I didn't. Given the same choice, I wouldn't do it today either.

If people have to be more involved/connected to do this stuff it will easily drop by two orders of magnitude. So, while stopping this sort of software won't stop the piracy it will certainly decrease it substantially.

My 2 cents...
Posted by pwinterrowd (18 comments )
Reply Link Flag
Try Streamsharing.com
This is where its all heading - software that allows you to view each others media without the download hence "stream sharing" - meaning any size video, mp3's or pictures or documents can now be searched and looked at instantly - also adding content is easy just click and drag no uploading needing!

Simple , easy <a class="jive-link-external" href="http://www.streamsharing.com" target="_newWindow">http://www.streamsharing.com</a> to download! enjoy!
Posted by xtme (4 comments )
Reply Link Flag
Please refrain from the term 'illegal downloads'
File sharing of copyrighted material may or may not be illegal, but the term 'illegal downloads' is never correct. Those who choose to share copyrighted material without permission of the copyright holder can be engaged in an illegal act, but person who is downloading the material cannot possibly know if the content being downloaded is in fact what the uploader claims of the content. For all the downloader knows the copy is a term paper or picture. Also, even though material that is copyrighted is shared, there are instances where the uploader may be on legally solid ground.

I have been downloading material for most of my life. Frankly, even visiting a website is technically downloading and is almost always copyrighted material.

Shame on CNet for spreading this lie. As a technical source it should know the difference.
Posted by MythicalMe (51 comments )
Reply Link Flag
WinMX not dead
While the official servers are dead, there is a hack the re-enables usage..

<a class="jive-link-external" href="http://www.slyck.com/winmx.php" target="_newWindow">http://www.slyck.com/winmx.php</a>
Posted by taosk8r (2 comments )
Reply Link Flag
Looked up this also
A more detailed description of the hack:

<a class="jive-link-external" href="http://www.slyck.com/news.php?story=925" target="_newWindow">http://www.slyck.com/news.php?story=925</a>
Posted by taosk8r (2 comments )
Link Flag
File Swapping has a Defense-Legal and Powerful
The copyrite laws are very specific. Consumers are allowed to make a copy of any copyrited material for their own personal keep. I grew up on the media of 8-track. I bought a lot of music in this format. When it went out of style, I bought the cassette. The 45 and the LP were among other formats that I paid for. I am entitle to copies of all the music I paid for Legally. My records are scratched, my cassettes are faded, and the record player is obsolete as with the 8-track. I have paid for the same songs several times over and If I need to download these songs from others, then so be it. The music industry did not complain when they changed the format to keep people like me having to purchase these songs over and over. They made billions convincing me I had to re-purchase. And now they complain. This is their problem not mine and I resent their power to convince everyone they can have it both ways. I have a rite to copies of all the material I have paid for and they are not going to tell me that the law changes whenever it becomes inconvieniant for them.
Posted by Legal Defense (1 comment )
Reply Link Flag
Not any more.
A recent change to copyright law makes it illegal to store any portion of a copyrighted work in a "shared" location. This of course makes every media center PC illegal, since it does not limit scope of acceptable use. It seeks to fight P2P networks that are more difficult to shut down such as Bit Torrent where you don't need all of the file to start sharing it.
Posted by zaznet (1138 comments )
Link Flag
are you nuts?
Don't get me wrong, I'm on the side of the "pirates", but your argument makes as much sense as saying the pair of jeans I bought are worn out and out of style, so I am free to walk into the store and shoplift a new pair of Levis that are not worn and more contemporary.

If we want to make any progress against the powers that be, we need to keep our arguments legitimate.
Posted by skeptik (590 comments )
Link Flag
RIAA short vision and greed
If the recording industry had its way every time it flapped mega dollars in front of our law makers we still be back in the AM analog radio days. At every turn they are suing for copyright violation. Assume they won and forced the old Betamax machines out of existence they surely would not have been able to make mega dollars if that would have happened. Then they argued that if code was written to break their DVD's and got the Digital Rights Act passed. They also sued RIO an original MP3 play for copyright violation and now look Apple Ipod and apple itunes is selling millions of songs for the industry. Now they target peer to peer networks, first Napster and now E-Donkey. Their total control and grip on the whole industry has gone absolutely berserk just this side of crazy. The definition of illegal is in the eyes of who makes the laws. Usually that means who has the gold. So the more money they get the greedier they become. Instead of becoming user friendly they want total control. Even pharmaceutical have a period where they can recoup their cost before going generic why not the same in the recording industry? One last issue to ponder Michael Jackson has the rights to the Beatles music, Lisa Presley sold her interest in Elvis music, and the last big thought to ponder is that Sony/Viacom owns the rights to "Its a Wonderful Life". In this last case all of the original actors like Jimmy Steward are dead and even the original studio does not exist yet a company which was not in existence at the time now owns the movie. Now thats insane.

Lastly the definition between legal and illegal is who persuades law makers to write the rules. Maybe if the people formed a strong enough lobby group but &.. I forgot its not about the people any more its about money and big business. Maybe someone should enforce the law of a person carrying a lantern in front of a car so we dont scare the horses its a law never removed from the books. What would people say if they received a fine for that? Its really time to review the laws and how technology is changing them instead of keeping people in the dark ages.
Posted by chicago_guy2 (73 comments )
Reply Link Flag
replacing my vinyl to MP3
hi i use P2P to replace my vast vinyl collection and turn it in to MP3's. i think the record industry has a duty of care to replace all my vinyl tracks with MP3's under the variable format licence, i have over 130,000 vinyl singles and more than 10,000 vinyl lp's, as i no longer have a record player to play them on. the record industry should provide a change of format free to all who already have vinyl. i have already spent 1000's on my music and if i have to transfer each vinyl to mp3 i could be here to the end of time, and why should i have to purchase more CD's just for the same tracks? i understand that the record companies are going broke and they have to blame someone for there own failings. lets face it most of today's music is so bad and the charts are a fix as usual
Posted by bernhug (6 comments )
Reply Link Flag
Why should they?
Why should the record company provide you with a free service? Where is their requirement when you purchased your LP to provide it in 8-Track, then Audio Tape, then CD, then DAT and finally mp3 or any other format yet to come?

They DO have a requirement to recognize that downloaded songs are not going to go away, and they have done that recently with the ever growing downloads of paid for music.

They should recognize the market you present. The problem is proving to the record companies that you own each of these and there-fore should have a digital copy available (at any price, free or otherwise). Do you still have all of your reciepts for every LP? Do you have all of them in their original case? Have you actually taken care of each to ensure it's continued play?

There is a potential for a market here, but it has serious obstacles. Had a LP been destroyed by water, fire, damage or spousal upheaval the record companies should not, nor could they, be held responsible to replace your misshaps. Owned and later lost an LP? What about the dozen that have been loaned out never to be returned?

I hope the RAII sues you for downloading music. Why? So you can bring your LP collection in to court and show that you have downloaded songs you alredy own. I patiently await that case to make it before a judge, because it's a very real concern for people who own any media and download the mp3.

And just for an FYI, there are still record players out there.
Posted by zaznet (1138 comments )
Link Flag
you're nuts too?
So if whe change from gasoline to hydrogen, the automakers should provide me with a new hydrogen care because what I really bought was transportation and the method they sold me originally is no longer current?

What would be fair is for you to legally transfer the vinyl to any new format you choose yourself. We can do that. It's considered fair use. With the current digital media we are losing the ability to do even that, and therefore losing our fair use rights.
You're proposing that the industry bears the responsibility to do the conversion work for you since you no longer have a turntable or perhaps your vinyl is damaged. Quite honestly that makes zero sense under any fair use doctrine. Why not just ask them for an extra copy of your CDs while your at it... for the car of course?
Posted by skeptik (590 comments )
Link Flag
A matter of time
It was only a matter of time before the whole piracy issue would hit critical mass. The odd techie person downloading programs is one thing. A person downloading hard to find music, that's another thing two, but every mom, dad, son, daughter and relative you know downloading everything they can get their hands on, now that's a problem.

There are alternatives to piracy, various services exist but they are either not a perfect fit for the user's current needs, or are simply over priced for whatever medium are trying to sell.

personally, if I'm going to download a music cd, i expect to pay less that retail cause if I am willing to pay retail, I'll go to bestbuy and actually buy the CD, at least that way I can get the cover art and jewel case. You don't get thoese when downloading, so I shouldn't have to pay for them!

I saw "Underworld Evolution" in the theater, payed $9.00, loved the movie, hated the movie experience. It was cold, sticky, smelly, lots of talking, and the sound system sucked. The snacks were incredibly over priced.

In short, the RIAA and MPAA want us to stop pirating and start paying full price for everything they shove down our throats. We should stop pirating, but we should also stop going to bad movies and buying crappy music.

That's the key, show them both how we really feel, don't download it or pay for it. When both numbers start going down, they'll freak! "our stuff is so bad, no one will even pirate it!"
Posted by thedreaming (573 comments )
Reply Link Flag
Music downloads too expensive
Legal music downloads are too expensive to my opinion. One dollar a song, that's around 20 for an album; on average. And alot of them don't even come close to 20 dollars in a store, while they come pressed on a cd there.
Posted by MrDeBeuker (1 comment )
Reply Link Flag
in answer to your comments
yes i have every one in its original case,
yes i have the receipts and yes i have a DB's of every track i have singles and lp's.
and whilst i dont mind contibuting a small amount to obscene profits the music industry makes each year. i dont see why i should..! (singles cost$6+ &#38; CDLPs $18+) and having already paid for each track at least once, and most songs get released several times in the course of a few months if it didnt do well the first time of release. and i have them as well.
Posted by bernhug (6 comments )
Reply Link Flag
 

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