Does video have a Napster problem?

By Jim Kerstetter , Greg Sandoval and Elinor Mills
Staff Writer, CNET News.com

Published: March 13, 2006, 4:00 AM PST

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news analysis It was a heavy-metal drummer who provided the defining moment for the original Napster and peer-to-peer music networks.

In May 2000, Lars Ulrich, the bombastic drummer for the band Metallica, personally delivered a list of 335,000 screen names of people suspected of music piracy to Napster's Silicon Valley office. With that giant stack of names came the beginning of the end for freewheeling music exchange services.

News.context

What's new:
Music and television producers are heading toward a file-sharing showdown, as more and more consumers buy the Net pipes necessary to bring in and send out video files.

Bottom line:
Despite a spate of file-swapping lawsuits, it's not all bad news for TV and movie producers. They have far better alternatives than the music industry did when it was doing battle with Napster, and the better-known video-sharing sites seem to have learned the hard lessons of their music predecessors.

Fast-forward six years. The new threat in Internet-enabled copyright infringement is centering on video. YouTube, the most trafficked of the video-sharing sites, has recently been asked to pull three videos--two skits from NBC Universal's "Saturday Night Live" and an American Airlines training bit--from its site owing to possible copyright violations.

But what's going on with YouTube, which promptly yanked the videos when NBC contacted it, pales in comparison to the growing legal concerns about video peer-to-peer networks. Increasingly, it's looking like music and television producers are heading toward their own file-sharing showdown.

"I think there is a fast and loose game being played by many people who are aggregating video online and selling advertising on their Web sites. And I think that there will be a day of reckoning," said Steven Starr, chief executive of Revver, a site that lets people distribute their videos and make money off ads when people watch them. "I don't believe you can build a sustainable business on copyright infringement."

So far this year, more than 50 people in the U.S. have been sued for allegedly swapping copyright movies online using peer-to-peer networks, according to the Motion Picture Association of America. Last month, the MPAA sued five sites that allow users to search for allegedly pirated files. It also sued file-swapping software provider eDonkey and several newsgroups, and shut down the Razorback2 file-swapping site network in Switzerland.

The spate of suits raises troubling questions for TV and movie producers, who, as more and more consumers buy the Net pipes necessary to bring in and send out video files, are reaching a crossroads their counterparts in music hit six years ago. About 67 percent of Americans who access the Internet at home now do so with a broadband connection, according to Nielsen/NetRatings. That's up from 31 percent five years ago.

"I don't believe you can build a sustainable business on copyright infringement."

--Steven Starr, CEO, Revver

Couple that with the popularity of TiVo digital video recorders and even software for recording video on the PC, as well as easy-to-rip DVDs, and the technology is there for a vast amount of video piracy. That doesn't mean "The Lord of the Rings" trilogy will start flipping around the Net like Metallica's "Unforgiven" did six years ago. But it does mean that short clips such as funny "SNL" skits or favorite moments from "The Simpsons" are ripe for the picking.

Like Napster, services such as eDonkey and BitTorrent provide technology that allows users to search for and access files over a peer-to-peer network. With newsgroups, also called Usenet, the files uploaded are stored in pieces on the Usenet servers around the world and not on individual computer users' hard drives, like with peer-to-peer.

The services are having a big impact on the Net. More than 60 percent of Internet traffic is being taken up by peer-to-peer swaps, and about 60 percent of those swaps involve video content, according to recent data from network infrastructure company CacheLogic. Though it's difficult to estimate how much of that video is pirated, analysts say it would be naive to believe most or even a great portion of it is legal.

As the music industry found out in the late 1990s, once that pirated material hits peer-to-peer networks, it's impossible to put a lid on it. And cracking down on the networks can be a futile effort, because many of them operate underground or are run out of countries without strong copyright protections.

Representatives for eDonkey could not be reached for comment. But a BitTorrent spokeswoman extended an olive branch to the MPAA. "I think we can play in the sandbox together," said Lily Lin, director of communications for BitTorrent. "We're working with the MPAA about finding a model where consumers can get the digital content they want in a legalized way."

Last November, BitTorrent announced that the studios had agreed to notify BitTorrent if anything in their search engine infringed on their rights. In turn, BitTorrent would promptly remove it, said Ashwin Navin, president and co-founder of the San Francisco company.

"Our hope is that they would replace that material with content that they would like to see distributed by our technology," Navin said.

BitTorrent itself has never been sued, said Lin, but so-called BitTorrent trackers have been targeted. Trackers are not operated by BitTorrent. A tracker is a Web server operated by an individual that serves as one of many hubs--or coordination centers--used by the BitTorrent file-sharing protocol. Like other peer-to-peer networks, files are typically not stored on the tracker but on computers that connect to it.

So what to do about it? If you're the MPAA, you sue and sue again. "In general, we look for people who are using technology to facilitate online piracy for people on the Internet to get illegal files," said MPAA spokeswoman Kori Bernards.