By Clive Young
New York (July 27, 2006)–The IFPI and RIAA, representing the major record companies around the world, have reached a global out-of-court settlement of international litigation with the operators of the Kazaa peer-to-peer network. While the amount has not been disclosed officially, the AP reported that Sharman Networks–the creators and distributors of Kazaa software–will pay more than $115 million in compensation to the recording industry. According to Wired, Sharman Networks will also make a smaller payment to the motion picture industry, and claims the payments have almost been completed, prior to the announcement of the agreement.
As part of the agreement, Kazaa will also introduce filtering technologies in an attempt to ensure that its users can no longer distribute copyright-infringing files.
John Kennedy, chairman and CEO of IFPI said in a statement, “Kazaa was an international engine of copyright theft which damaged the whole music sector and hampered our industry’s efforts to grow a legitimate digital business. It has paid a heavy price for its past activities. At the same time, Kazaa will now be making a transition to a legal model and converting a powerful distribution technology to legitimate use.”
Nikki Hemming, CEO of Sharman Networks, stated, “It has been our long standing goal for Kazaa to play a significant role in the growing market for licensed online distribution and authorised exchange of copyrighted content using peer-to-peer technology, and this settlement ensures that we will be working together with the content providers to the benefit of consumers, businesses and artists. All the parties involved now recognize the time is right to work together, and we are looking forward to collaborating with the music and motion picture companies to make P2P an integral part of the future of online digital entertainment.”
At one point, Kazaa was one of the world’s most popular peer-to-peer networks for the illegal trading of music and movies, and at its peak had 4.2 million simultaneous users worldwide. In May 2003, Sharman Networks declared Kazaa the most downloaded software ever, at 239 million downloads.
News of the agreement was greeted with mixed reactions from the file-sharing community; many feel that the settlement is a case of “too little, too late,” as Kazaa’s time is largely seen to have come and gone, with filesharers moving on to other networks and technologies, such as Bit Torrent. While Kazaa was once a robust network–the largest of any fire-sharing community–that number has been cut in half by the chilling effects of lawsuit campaigns by the RIAA, and Kazaa losing popularity due to a lack of updates to the software and the FastTrack protocol it is based on.