MP3 Downloading Still Booming

June 18 -- 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.