Wu: Grokster's future

I want to disagree with Doug and some of the other expressed views of Grokster.

The important question is this: how does the Grokster decision affect the future of content distribution? In my view the decision will actually settle matters more than people think. To use a Lessig term, Grokster is zoning filesharing -- as between highly illegal, highly illegitimate operations on the one hand (like WASTE and some Bittorent clients), and highly respectable, legitimate operations on the other (iTunes and the new Napster).

Let me put it this way. Many believe that Grokster will merely means more litigation, but I think that view is too lawyerly, premised on the vagueness of the standard, instead of on the incentives that Grokster creates. What company, after Grokster, would seriously want to try and start on a Kazaa model, minus advertising? It is just too risky. The companies in the middle are killed by Grokster. The obvious bets are now to go totally underground, or totally above ground. And neither now presents a hard legal question. That suggests, though I may live to eat these words, that for now the age of filesharing litigation, at the intermediary level, is over.

That doesn't mean the transformation of the industry is over by any means. The recording industry is still in trouble, and consumers will segregate between above- and under-ground distributiion based on their wealth, time, and computer ability. But the technological successors to CD distribution will not be Kazaa-style companies; they will be iTunes-style. Or so it looks from here.

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Specific responses to Douglas and Lior. Doug, you say ""The silver lining here might be this: the studios and the legitimate technology companies might now have an incentive to team up and offer licensed services." But doesn't that "silver lining" already a name: iTunes? What the Groskter decision does, as I keep saying, is to bless the iTunes model, and that will be its lasting legacy.

Lior, I think you too casually assume that there is some incentive to want to risk a lawsuit and become the only company to survive Grokster/Sony after years of litigation. But what rational business would do that, given the malleability of the Grokster rule, and the questionable returns of being a successful P2P company? Especially when compared to either going completely underground, or going legit? It would have to all be for glory.

Comments

[Andreas Bovens]

Tim, you say: "Grokster is zoning filesharing -- as between highly illegal, highly illegitimate operations on the one hand (like WASTE and some Bittorent clients), and highly respectable, legitimate operations on the other (iTunes and the new Napster)."
I have some issues with the services you compare.
"WASTE": WASTE promotes itself as a piece of software that "is designed to enable small companies and small teams within larger companies to easily communicate and collaborate in a secure and efficient fashion, independent of physical network topology" (cfr. http://waste.sourceforge.net/ ). Furthermore, the filesharing capabilities of WASTE are limited to small user groups. So, I am not so sure you can call WASTE "highly illegal", and think it even falls within the stricter lines drawn by the Grokster decision.
"some Bittorrent clients": to me, it seems like Bittorrent (as in "Bittorrent protocol") also passes the Grokster test, as it was originally intended to share large files on the net (or at least promoted as such) -- its makers will certainly have a hard time defending it when it comes to a lawsuit though. I fail to see however what makes "some Bittorrent clients" more illegal than others. Could you elaborate on that?
"iTunes and the new Napster": those aren't filesharing services, but online music stores that were started in cooperation *with* the music industry (hence the DRM, hence the payments). In other words, the zoning of iTunes and the new Napster as "legal" already happened before Grokster.