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Online music plays a new tune

Fed up with spyware or fearing lawsuits, file swappers are going underground or giving up

The number of surfers using Kazaa's file-sharing software is down to 20 million people, compared to almost 35 million users less than one year ago, according to research from ComScore Media Metrix.

But the steep decline doesn't mean the death knell is ringing for free and illegal music online. Paid music services may be growing, but so are some of the smaller peer-to-peer services. And many Web surfers are finding new sources and new methods for trading music online.

So in the war against online music piracy, who is winning? It depends on whom you ask.

"The barometer of success for us is not the day-to-day traffic on any particular pirate peer-to-peer network. There will always be a degree of piracy online, just like there is always piracy on the street," says Jonathan Lamy, Recording Industry Association of America director of communications. "Clearly, file sharing is still an enormous problem, and that means that we need to continue the course of deterrence through legal action and offering great legitimate alternatives."

Researchers confirm that file sharing appears to be on the decline. Use of peer-to-peer services is down slightly in a recent survey by the Pew Internet Project and ComScore Media Metrix. ComScore also noted a drop in the use of the WinMX file-sharing service, says Graham Mudd, a senior analyst with ComScore.

However, ComScore notes an increase in the use of several smaller, lesser-known peer-to-peer networks, such as BitTorrent and eMule. BitTorrent, for example, had slightly more than 200,000 unique users in November 2003. By February 2004, the number was just under 400,000.

"There has been some speculation that these services have lower visibility, and it may be more difficult to track users on them," Mudd says. "More savvy Net users may be switching to these applications because they think they can fly under the radar."

The RIAA, however, disputes that assumption. "The nature of these networks is such that if you are distributing music files to thousands or millions of other users, you can be found," Lamy says.

While BitTorrent's usage almost doubled over a three-month period, it remains small. Clearly, not everyone uninstalling Kazaa and WinMX is moving to an alternative service, Mudd says. "The pickup in smaller applications does not make up for the overall decline in peer-to-peer usage," he says.

Some users are switching to legal services, such as iTunes, which celebrated its successful first year in April. (iTunes for Windows users launched last October.) iTunes sold 70m songs in its first year, Apple CEO Steve Jobs said in celebrating the anniversary last month. While admitting that number falls short of Apple's goal of selling 100m songs in its first year, Jobs called the growth "phenomenal."

Ironically, though, the RIAA campaign is also scaring off potential customers, the Pew and ComScore study finds. Sixty percent of people who have never tried downloading music say the threat of lawsuits will deter them from downloading music from any source, legal or illegal, in the future.

The RIAA's actions, intended to stop illegal file swapping, are clearly confusing some people, says Mary Madden, a Pew research specialist.

"This is a mixed message for the RIAA," Madden says. "On the one hand, they have significantly intimidated people from logging on to peer-to-peer services. But there's also the potential for people to be scared away from legal services. People are still very confused about what constitutes legal and illegal behaviour."

After all, some file-sharing services promote premium or other fee-based services, and some also have legal uses, she notes. "So the potential is there for confusion," she says.


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