For many years a lot of the network traffic at universities has been taken up with music sharing. So naturally the big music companies of the world have taken an aggressive stance to try to either (a) shut down the traffic or (b) get paid for it.

One of the more recent solutions from the industry in the US was a service called Ruckus. It was a free, ad-supported service that was an asset of a company that was acquired by a JV entity owned by Universal and Sony. They have now unwound the JV.

You have to wonder whether the sole purpose of the JV was to acquire the company in order to close down the service. The music companies have a very clear view of anything that offers content free, even if it is ad-supported. If consumers start to get used to “free”, the thinking goes, then people will not value the content. So rather than going with the flow of consumer sentiment, they close down the service. That inevitably leads to students continuing to do what students do – and sharing music by some other means. That will inevitably lead to more law suits from the content companies.

It keeps the lawyers happy, and it enables the content companies to keep on claiming that they are losing revenues from declining CD sales. All this at a time when the revenues from digital sales via phones and via iTunes are doing the hockey stick dance… It is not about gross revenues. It is about net profit. Digital sales put virtually 100% of the revenue directly to the bottom line. CD sales don't.

That is the P2P gap.

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Posted in Main Page by Chris Gilbey No Comments Yet