Sharing is a community thing and has been since the time of Adam. (Think Apple – Eve, not Jobs)

But Ipoques’ latest report states that P2P file sharing is down 6.9% year on year.

They go on to explain that the drop is balanced by http traffic from sites like Rapidshare. Users are moving to this kind of site in droves, sick and tired of being harassed by companies like Media Defender, Bay/TSP and DTECnet. And sick of Governments legislating SafeHarbour Acts that require ISP's to disconnet the users.

Smart users figure that if their download looks like port 80 http traffic then it is less likely to be interdicted, interfered with, or have the brakes applied to it by ISP’s who want to stay out of trouble with content companies.

At Perceptric, we have a theory, the harder and higher the level of interdiction, the greater the pushback from the p2p community.
 
Anecdotally, it is the author’s hypothesis that the real P2P “buzz” is almost over. That interdiction, filtering, Denial of Service attacks are all pretty much about to become a moot point. After all – where is the fun in collecting grains of pretty coloured pink sand on a beach when you live on the beach?
Lack of scarcity eventually cures the P2P download-desire from even the most dedicated downloader.  

Many readers would know that I regularly conduct tests of the P2P networks for anomalies, memes and themes.

It rises in the East.
A curious statistic that P2P file users are now more likely to be located between the middle east and China. This is the new P2P majority.

One of my recent research efforts was to research all Tom Cruise movies spanning the period 1986 – 2009 to determine whether P2P traffic hurts or assists Box Office sales.

Cruise’s most current movie, Valkyrie shows some interesting statistics. I noticed this morning that out of the 1120 connections – 912 were from China.

Source: Perceptric Pty. Ltd. Corporate Data

(All 1120 connections – some lines represent 50+ connections – i.e.: Reverse trace-route on this map shows the city relating to the IP address.)

My first thought was, “What are Chinese people doing watching Tom Cruise in English?”

China is an interesting study for anyone wanting to understand the potential benefit or harm of P2P activity on a country. It does not have the same onerous ISP “Safe Harbour” reporting provisions imposed on it by the government.

The Chinese cinema industry now ranks third in the world behind Hollywood and Bollywood.
Up until mid-2004, prior to production, every script had to be submitted to the Film Censorship Committee of SARFT in order to be considered for a potential filming permit, thereby making the film “legal” for distribution in the 3200 Chinese cinemas.

Recently film industry restrictions have been loosened somewhat to facilitate a growing Chinese film industry. However, before this breakthrough – many Chinese filmmakers worked “underground” with illicit “non-censored” Chinese movies being distributed via street markets and Chinese internet users.

Chinese cinema celebrated its centenary in 2005 with 250+ films produced that year setting a new record as television began to dominate the Chinese entertainment market in the early 1980s. In 2005 the Chinese economy grew a staggering 9.8%, but the film industry reported phenomenal growth: 22.6% for the same period.

Due to the decreased censorship, people’s interest in cinema was revived. Community sentiment went from “The film is merely government propaganda” in the 1990’s to the point where cinema ticket sales continue to grow at an aggregate 33% per annum

Even so – Chinese officials still consider that western films add to a widening “cultural deficit” and as a result it is impossible for Hollywood studios to vertically integrate through the value chain by owning a majority share in the theatres. As a result of this policy Hollywood has never reached market dominance.

So now I repeat the question…..  “What are Chinese people doing watching Tom Cruise in English?”

At least 912 Chinese people who downloaded Cruise’s “Valkyrie” movie would have seen what a final solution revolution looked like in another place and time where the state had absolute power.

The statistics on Chinese film production in 2005 was:

Number     Type
3              Blockbusters (over 100 million RMB Production budgets. E.g.: The Promise)
10            10-50 million RMB
240          1.5-3 million RMB (These films are restricted to TV and/or DVD release only because of budget constraints).

Therefore, if Chinese people want a big screen experience during each calendar year, they are restricted to a choice of 13 domestically produced movies – plus overseas Hollywood content.

The average wage in urban areas in 2006 was 1750 yuan a month or just under $US60.00 per week, and the imperative according to western movies is that capitalists speak English.

So if your daily entertainment budget (after feeding the family) equals $1.30 – are you likely to spend it on visiting the cinema? Or would you buy 20 blank DVD’s and visit a friend’s place who has an Internet connection?

Hollywood may turn its back on China and figure that it is too hard to make a buck there. But the Chinese are definitely not turning their backs on Hollywood. And when a billion Chinese have their hard discs full of Hollywood content and act as seeders within P2P networks the total ubiquity of all content will not be far away.

And as we all know scarcity drives price.

So once all content is universally available, what will it be worth per unit?

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