As we all know KaZaA is a very popular file sharing software and has become a major pain in the b*tt for Hollywood. Although the software is mainly known for sharing pirated (music) files, it also has great potential as a marketing tool.
KaZaA already offers a payment mechanism (Altnet) but the problem is that the copy-protected material is minimal (to say the least) compared to the available pirated files. KaZaA is looking for salvation but the major record companies don't really want to cooperate:
Matthew Oppenheim, the recording industry's senior vice president for business and legal affairs, compared Altnet's offer to a robber trying to sell security to a bank. "If this is a company that really wants to be in a legitimate business, they would get out of the illegitimate business first," Oppenheim said. |
But while they build that legitimate business, the companies behind Kazaa have refused to drop the free file-sharing, which brings them undisclosed advertising and other revenues.
"Even though people trade content illegally on Kazaa, if they are doing sufficient volumes of legitimate business, what's the problem?" asks Gabe Zichermann of Trymedia Systems Inc., which distributes video games through Altnet.
The bigger challenge is content.
Since its launch in May, Altnet acquired about 800 items for licensed distribution -- mostly video games and obscure songs. Major movie and music libraries remain unavailable.
According to the article Altnet, which charges artists to post their files, sells 500,000 licenses daily. For Sharman, KaZaA owner, legal sharing offers its biggest revenue potential..
Source: CNN.com
