Can P2P networks beat iTunes on authorised downloads?

The album Jupiters Darling, the latest work from Seattle's favourite power-ballad sisters Ann and Nancy Wilson, was released in June. It came out simultaneously on CD and as a downloadable file employing "Weed" technology from Shared Media Licensing on peer-to-peer networks.

Unlike the illegal file-sharing more commonly associated with P2P networks, the secure Weed format is not free. It results in artists receiving 50% of all sale proceeds, which range from 50 cents to four dollars per file.

According to Weedfiles.com, the system allows a music fan to download any number of Weed files and listen to each one on his computer three times for free. The fourth time the fan tries to play the song he is prompted to buy it. If he does not buy the song, it locks and cannot be played again on that computer until he buys it. If he buys the song, he can play it on that computer, burn audio CDs or transfer it to portable devices.

After a music fan buys a file he can then resell the file by posting it on his web site or a P2P network, e-mailing it to a friend or even burning it to a CD-ROM. If someone else buys this copy of the file, then the song's rightsholder receives 50% of the sale price.

Additional revenue from the sale is distributed three levels back in the distribution chain: 20% goes to the person the buyer got the file from, 10% and 5% respectively to the people one and two levels up. Weed charges 15% for managing transactions and parcelling out payments.

According to the Distributed Computing Industry Association (DCIA), 30,000 CDs of Jupiters Darling have been sold so far, and 2,000 digital tracks have been purchased. In the past week, said the DCIA, the number of tracks purchased through the Weed file-sharing process has outnumbered those purchased through iTunes, although it does not state by how much.

"The future is here," said DCIA CEO Marty Lafferty. "DCIA Member companies today deliver the final proof that artists can be fairly compensated AND consumers can enjoy the benefits of P2P file sharing."

The music industry has shown no signs of embracing the use of P2P networks to share DRM-protected files; but representatives have indicated that they would consider it as a way forward (see the link below).

The industry continues to suffer the effects of music piracy – up 13% in the past year, according to figures released yesterday by the BPI (British Phonographic Industry). This growth in piracy is six times greater than the growth in legitimate album sales.

According to the BPI, music piracy brought in just over £56 million in the UK last year, a figure equivalent to 4.2% of the legal market. Much of the increase in commercial piracy is the result of the increased involvement of organised crime, said the BPI.

According to BPI Chairman Peter Jamieson:

"Let no one be in any doubt of the seriousness of these figures. Though illegal file-sharing has grabbed the headlines for much of this year, on market stalls and at car boot sales around the country criminals are ripping off artists, they are ripping off the people who invested in the music - the record companies - and ultimately they are ripping off the consumer. Stealing the music of today damages the music of tomorrow."