A peer-to-peer business model for the music industry

Abstract

So far, the most profound problem of the internet-based distribution of music was the ease of copyright infringements (especially due to the emergence of illegal Peer-to-Peer exchange networks) and the little interest of users in commercial music offerings. Hitherto, the music industry tries to confront copyright infringements with technical restrictions and legal sanctions - up to now with minor success. Economic incentives for users to comply with copyrights and pay right-owners have not yet been discussed. The paper on hand introduces a Peer-to-Peer-based business model, which enables the compensation of copyright owners on the basis of economic user incentives and doesn't need technical or legal actions in order to enforce copyrights. Central in this model is the participation of users in the fees charged for the download. Therewith, the idea of Peer-to-Peer is being consequently advanced in the way that users not only participate in the process of distribution but also in the revenues generated. The user takes - besides the role of the music consumer - also the function of a merchant, enabling him to generate monetary revenues. Introducing this kind of incentive to a commercial filesharing system can be an approach to detract from the free systems' attractiveness for users sharing their files. The number of files offered in free filesharing systems will decrease since users will move to a system that offers a monetary remuneration. © 2003 by Springer Science+Business Media New York.