MP3 Downloading Still Booming

If Napster is a thorn in the side of the recording industry, then BearShare may be the guillotine poised to slice its neck.

Just months after a federal appeals court ordered Napster to cease its dealing in copyrighted music, a new breed of file sharing is rapidly gaining popularity. The burgeoning swap services are even more elusive, and, for now, unstoppable.

"There are going to be these thousands of parallel distribution universes," says Rob Batchelder, an analyst with the Gartner Group in Stamford, Conn. "The genie's out of the bottle."

If the Recording Industry Association of America had its wish, it might eradicate file sharing for good. But a new report by PC Pitstop, an Internet marketing firm, finds that file-swapping alternatives are increasing as users migrate away from Napster.

With Napster suffocating in litigation, its 70 million users are flocking to other file sharing galaxies like Gnutella (pronounced New-tella), or BearShare, to download MP3s, which are compressed digital audio files that play at CD quality.

PC Pitstop expects the growth to continue among the alternatives in the coming months, as Napster scrambles by court order to filter out copyrighted titles and more users abandon the service.

This mass migration is rooted in what many consider to be the next killer Internet application: Peer-to-Peer (aka P2P). Venture capitalists and visionaries alike are pouring money and brainpower into creating business-class P2P services to capitalize on the movement.

Napster's Weak Spot

While Napster is a P2P application, it is vulnerable to regulation since its services are centralized and can be halted with the flip of a switch. In what is referred to as a hub-and-spoke environment, its central servers (the hubs) locate myriad MP3 files that connect to spoke-like users who have those media on their own computers. Without the hubs, Napster stalls, making it an easy legal target.

Desperate to stay afloat, Napster recently entered into an agreement with three major record labels to legitimize its service through a fee-based system. But Napster users are looking for a free — not fee — solution. And it hasn't taken long to find it.

Obstacles to pay-for-play.

What's GNU?

Enter Gnutella. Created and briefly released on the Web last year by programmers at America Online (AOL), it spread like wildfire before an embarrassed AOL managed to yank it away. But it was too late. To date, Gnutella has been cloned and distributed across the Web by millions of users.

Gnutella is a free, open-source method of sharing files and programs. Unlike Napster, Gnutella is a decentralized system — it is not a company, there are no servers, and there is no CEO to hold accountable.

And even as Gnutella struggles to improve its speed and transfer reliability, applications like BearShare, which utilize the Gnutella technology, are taking hold.

Once BearShare is installed on your hard drive, it locates other BearShare users with whom you may exchange media such as MP3s, image files and other file types, without anyone attached to that cluster. In layman's terms: what has no switch can't be turned off.

BearShare, Gnutella and other applications like it are getting the RIAA's attention. If Napster — the easy target — is slowly being tamed, what to do about this new, decentralized, unyielding beast?

"There is definitely legal basis on which we can address this," says Cary Sherman, senior executive vice president and general counsel for the RIAA, which was directly involved in the litigation against Napster.

"As a rule of thumb, 80 percent of the files are provided by 20 percent of the users. We could therefore target enforcement efforts at the 20 percent of people spreading most of the files," he says.

Potentially, then, if all Napster users migrated to Gnutella, the RIAA would have to file suit against 20 percent of 70 million people, a proposition that Norman Zivin, an intellectual property attorney in New York City, thinks is outlandish.

"As a matter of enforcement, I'd frankly be surprised if they started suing individuals," Zivin says. "First, it won't make them any friends, and it's not cost efficient. One just can't sue millions of individuals since the damages from any one person is not significant."

Usage of BearShare and Gnutella may very well boom in the months to come. In a recent article, estimated that in the month of April, 30,000 people were sharing files at any given moment on BearShare.

Technical Fixes Explored

Sherman says the RIAA has considered implementing certain "technical measures" but would not discuss the logistics of any plans at enforcing copyright laws.

The most likely enforcement mechanism might be to track and record a user's IP address (the location of a machine within a network), and then somehow block the user from accessing the service.

But Michael Andrews, a computer consultant in Baton Rouge, La., sees flaws in this approach.

"Although Gnutella will reveal the infringer's IP address, it's far from a digital fingerprint since many broadband service providers (such as Time Warner's Road Runner) assign these addresses dynamically."

Since a dynamic IP address is one that constantly changes, a blocked user might be able to access the system only seconds later — once his IP address is refreshed.

Further complicating efforts at enforcement, new BearShare-like systems are designed much like the childhood "Telephone Game," where you only know the existence of the computer next to you. In all likelihood, the adjacent computer didn't provide the copyrighted material — instead it was another computer far off on the network that just used your neighbor as an index and/or courier.

According to Andrews, this issue might prevent enforcers from knowing who the actual copyright violator is.

Share With the Bear

While enforcement efforts remain vague, BearShare and other services like Aimster, are rocketing Net-wide, providing a seamless interface and a multitude of MP3s by virtually any artist. For example, at 7 p.m. ET on a recent night, a search for "BILLY JOEL" turned up more than 3,700 entries — Joel's entire collection, plus bootlegged concert songs and other live appearances.

"BearShare is better than Napster ever was," says a source from a software development company in Boston who wished to remain anonymous. "There are more songs, better download speeds, and it's just superior."

But Sherman insists BearShare and Gnutella have limitations, including major security flaws.

"Gnutella has security risks. People don't know who they are dealing with, how their privacy might be invaded, or who is planting viruses on their computers. As security and privacy becomes more of an issue on the Internet, consumers will be more and more inclined to go to legitimate sites, where it is secure and where artists will get paid."

But Sherman also acknowledges that millions of users are still looking to share music. And there are no signs of that slowing down.