Over the last couple of weeks I have been having some very interesting conversations with an old acquaintance who is one of the most savvy Internet guys in Australia. He built one of the early ISP's and made a fortune (which he subsequently lost but that's life). He is truly a geek's geek. But its probably better that I don't discuss who he is at the moment... (Some mutual friends will figure that out).

A couple of years ago we had some in depth conversations about copyright piracy and what could - or in most cases could not - be done about it. We were both clear about a couple of things back then: DRM was never going to work. And human nature being what it is, people will always go for the least expensive option.

So that led us to believe back then that the content companies were going to get into ever deeper crap as broadband penetration widened. The music companies have continued, particularly in the US, to apply a sledgehammer to a walnut strategy, pursuing the little guys and making a very small percentage of law suits stick. I imagine that their thought is that the publicity surrounding the law suits will discourage the masses.

So in the last few weeks after a hiatus of probably two years we started discussing this stuff again.

What I found interesting this time around in my discussions with the anonymous friend was to be told of the speed of the growth of the P2P networks. Not only the speed of growth of the downloads, but the growth of the number of networks. And a lot of these networks are mesh networks. That means that there is no central server necessary - your computer and my computer form part of a group where files can be easily shared and are pretty much untraceable.

Now the music companies have been playing Spy V Spy games with content for some time, placing spurious files into the more visible file sharing networks. These are files that have text titles that match with popular downloads (Madonna, Metallica etc) but when the unsuspecting consumer downloads them they find that the file is (1) empty or (2) has a virus inside it. Make no mistake the copyright police is one of the most active distributors of viruses that is out there. 

But the problem is that for the most part people who are active downloaders are also very hip to changes taking place in technology. So once they realize what is happening they migrate to these very sophisticated mesh networks where there are trusted suppliers of content. Of course the copyright police are also aware of this. But they are actually conflicted. They know that their bread and butter comes from providing measurable results to their commercial clients. That comes about most easily if they catch people. Since the amount of people downloading music is growing at a geometric growth curve they don't actually have to work too hard to achieve results. Hence they focus on the tip of the iceberg rather than the mass.

All that means that the fundamental model that continues to be pursued by the content companies is flawed. But it can be fixed. Fixed by a combination of technology and understanding of human nature. And in doing so can produce huge increases in revenues for the content owners.

I would be happy to discuss it with any interested parties!