1. Group 1
Proudly present…
P2P NETWORKS
Music ROCK, Rolls.
Industry

2. Agenda
• P2P Definition
• Evolution of P2P
• Case Study Question and Answer
Agenda
• P2P Definition
• Evolution of P2P
• Case Study Question and Answer

3. History of file sharing
• Single Server
– Upload file to server
– Server overload and limitation of Bandwidth
– Whole file only
– Separate not work
• Multiple Server
History of file sharing
• P2P
– File Directly send from client to client
– Less load on Server
– No bottleneck

4. Agenda
• P2P Definition
• Evolution of P2P
– Napster
– KaZaa
– Bittorrent
• Case Study Question and Answer
Napster
The first world champion of
free music downloads

5. History
• Founded in 1999 by • at age of 19 !!!
Shawn • Specialized exclusively in
Fanning music in the form of MP3
files
• Presented a friendly user-
interface
Sean
Parker
History
• In February 2001 the program hit global use by 26.4
million users

6. How the old Napster worked?
• Friendly user-interface and easy to use just
– Opened Napster Utilities
– Search for the song you wanted
– Napster Index Server provided the list of the
Napster client which had that song
– Click “Download”
How the old Napster worked?

7. Legal Challenges
• New songs leaked in Napster network before
they were released
• Filing a lawsuit by
– Metallica
– Dr. Dre
– Madonna
– Etc
• A&M Records and others sued Napster in
2000
Legal Challenges
• Napster lost the case
• Could continue its business with non-
infringing uses
• Shutdown its service in July 2001
• Bankrupt in 2002

8. Here and Now
• Acquired at bankruptcy auction by Roxio, Inc.
• Purchased by Best Buy, Inc. at $121 million
• Business Model Changed
– Get Free Stream songs up to 3 times each
– After that (if you like that song) you have to
• Purchase the track
Or
• Subscribe with Napster
– $5 Gets You 5 MP3s and
Unlimited On-Demand Streaming Music
Here and Now

9. What is Kazaa?
Kazaa is a peer-to-peer file sharing application
using the FastTrack protocol and owned by
Sharman Networks.

10. How was it used?
• Kazaa is commonly used to exchange files
– MP3s
– Videos
– Applications
– Other documents
Difference
from Napster
• There is no single
list from single
server.
• It used Fast Track
Protocol.

11. Against the law suite
RIAA filed Court Order
Napster Court reverse lawsuit To filter
was ordered an earlier against 261 Copyright
to shutdown judgment individuals content
2001-Jun 2002-Mar 2003-Feb 2005-Sep
2001-Mar 2001-Nov 2002-OCt 2004-Feb
Kazaa Consumer Sharman Sharman
was founded Empowerment was sue was used
was sued in LA. in Australia
by Dutch
Against the law suite

12. Bittorrent
• Protocol
• Developed by Bram Hohen (2001) by Python
– it has been estimated that it accounts for
approximately 27-55% of all Internet traffic
(depending on geographical location) as of
February 2009

13. Bittorrent Concept
– Solve Problem about inequality speed of upload
and download & Server overloaded
– File Separation, Parallel Download.
• Idea from “MojoNation” : split a single file into pieces
– Motto : Give and ye shall received
• Seeder : Original Source, Upload Only.
• Leecher (Peer) : Sender(Upload) and
Receiver(Download)

14. Bittorrent Conponent
• Client : Tracker Client Program
• Server : Collect Torrent File & Tracker
– Close System
• Member / Ratio (Upload / Download)
– Open System
• Torrent File

15. Advantage / Limitation
• Advantage
– Higher Speed
– Enable to transfer bigger file
• Limitation
– Speed depends on No. of peers
– Problem with streaming file
Why They can’t sue Bittorrent?
• if it can be used for legal purposes.
BitTorrent passes that test, says Fred von
Lohmann, a lawyer at the Electronic Frontier
Foundation, because Linux groups and
videogame companies regularly use it to
shuttle software around the Net. "That puts
Bram in the same situation as Xerox and its
photocopiers.”

16. Agenda
•P2P Definition
•Evolution of P2P
•Case Study Question and Answer
Case Summary: P2P Networks Rock
• Court battle: MGM Studios, Inc. v. Grokster, Ltd.
– June 2005: The U.S. Supreme Court unanimously
concurred that Internet file-sharing services such as
Grokster, StreamCast, BitTorrent, and Kazaa could be
liable for inducing copyright infringement.
– Business model: Steal the music, gather a huge audience,
and monetize the audience by advertising
• Legal victory!!! but do not solve problems facing the
music industry…WHY??

17. Case Summary: P2P Networks Rock
• Downloading legal music
• Business growth 50% per year since 2006
• Not strong enough to compensate for the plunging CD
sales
• Not downloading entire albums
• Downloading illegal music:
• Using file-sharing P2P networks
• Younger people
• Falling CD sales revenues
Question from case

18. Question 1
• How can P2P file-sharing networks make
money if they do not sell music?
– Direct
• Sell movie online (e.g. www.cinemanow.com)
– Indirect
• Provide the download service for online game and earn
from Air Time
• Sell advertising on the sites
• Distributed Software for advertisement to peer PC
directly
Question 1
• How can P2P file-sharing networks make
money if they do not sell music?
– Indirect (cont.)
• Member fee for Bittorrent website.
• Bittorrent Broadcaster.
• Cohen get Donation by followers.
• Another Service like Colo

19. Question 2
• Into which category or categories of e-
commerce do P2P file-sharing networks fall?
Anything of file that the vendors would like to sell
such as;
– Books
– CDs/DVDs
– Application
– PC Game
Question 3
• What social issue are raised by P2P file-
sharing protocols and programs such as
BitTorrent?
– Pornographic Film/ Movie
– Piracy of Intellectual property
– Privacy/Cultural
– Change in Consumer Mind-Set & Behavior
– Change in business model/ business strategy
– e.g. U2: Free music and revenue comes from concert and
others.

20. Question 3
• Is the record industry justified in attempting
to shut them down? Why or why not?
– Yes:
• P2P file-sharing protocols/programs lead to loss in
revenue.
• For long term effect: Investors might not be interested
in this business.
• A disaster for artists (loss of income), consumers (loss
of platforms the music industry COULD develop), and
society (loss of jobs, artists).
• the proposed policy to disconnect file-sharers from the
Internet; however, this couldn’t be done since the
technology itself is legal
Question 3
• On the other hand, creativity and quality of work
might be improved to handle with the loss of income
crisis

21. Question 4
• Will the supreme court’s decision inhibit the
development of P2P technology or the internet
itself, as proponents of P2P services have
claimed?
Not prohibited
- The concept behind file-sharing is totally legal
- But a the same time sharing copyrighted material is
illegal
- Sharing file without the permission of the copyright
holder is against the law
Question 5
• Why do people older than 21 tend to use
legitimate downloading sites whereas
younger people tend to use illegal sites?
– Income/ Credit cards issue
– Ethics/ Legal issue
– Kid/Teen Convenience Lifestyle (Youtube and MP3
file sharing)

22. Question 6
• What difference would it make if the existing
music labels disappeared for lack of revenue?
– No big company – Deficit/ bankruptcy
– Business will change business process.
• Cross functional business
• Targeting revenue from Brand Identity, Souvenir,
Performance ticket rather than selling the CDs
– Long tail artist e.g. Increase in Indy artists
Question 6
• What legitimate function do the music labels
perform in the creation and distribution of
original music?
– Sample music/Teaser w/o protection as a part of
promotion tool and creating a “buzz” with no financial
cost
– Targeting revenue from Brand Identity, Souvenir,
Performance ticket rather than selling the CDs e.g.
U2: Free music and revenue comes from concert and
others.

23. /*Anin /*Porntip
Purnasugandha*/ Wijitrattanachai*/
/*Bordyn /*Sun
Cheevatanakonkul*/ Kunawattanakorn*/
/*Charlie /*Sedtha
Pongsangangan*/ Jittiarunchai*/
/*Kanokwan
Lorattanareaungkit*/
The End
See you again at Final Project