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Supreme Court Ruling on Grokster to Spur Long-term
Growth of Legitimate P2P Services
The U.S. Supreme Court’s unanimous ruling on June 27, 2005, against
peer-to-peer (P2P) services such as Grokster provides a framework for
future growth of legitimate P2P services, according to research firm Parks
Associates.
In the case MGM Studios Inc. et al v. Grokster Ltd. et al, the Supreme
Court decided P2P networks such as Grokster and Streamcast Networks could
be held legally liable if they induce copyright infringement to support
their business operations.
“This ruling is favorable to the content industry in the near term but
neutral in the long run,” said
Harry Wang,
research analyst at Parks Associates and author of Parks Associates’
recently-released report
Digital
Rights: Content Ownership and Distribution. “P2P technologies have
been very adaptive in response to legal attacks, and this recent decision
will drive P2P networks to adjust their business models to avoid
lawsuits.”
Wang expects in
the near term the content industry will capitalize on this legal victory
and commit more resources against Grokster-like P2P Networks.
“Grokster is a second-generation P2P service built on the lessons
learned from the old Napster venture,”
Wang said.
“Although the court ruling by and large outlaws Grokster’s current
advertising-driven business model, P2P networks will experiment with new
models that are not solely based on advertising revenues, thereby closing
this new legal inroad for the content industry.”
One such business model could include collaboration between the content
industry and P2P providers. By leveraging the efficiency of P2P in content
distribution, content providers could create new streams of revenue while
at the same time providing a legal outlet for P2P services and
technologies.
“Adding digital rights management (DRM) control to P2P networks should
be the end goal for both sides,”
Wang said. “The
content industry has gained significant leverage against P2P operators
through this ruling, but there is also a golden opportunity to press for
more legal content distribution over P2P networks. Simply put, while
Grokster might not survive the Supreme Court’s ruling, P2P technologies
will persist. If both sides are to succeed in the post-Grokster era, they
should build a working relationship that will use their strengths to
realize truly efficient digital distribution of content.”
Digital
Rights: Content Ownership and Distribution provides an in-depth
look at the significant issues, technologies, and players in the digital
rights management (DRM) industry. It analyzes different stakeholders’
interests, reviews a variety of technologies, discusses current DRM-enabled
content distribution models, and provides insights to future DRM adoption
trends. Moreover, the report profiles key players in the DRM industry and
features consumer data from several recently completed primary studies
conducted by Parks Associates.
For additional information on
Digital
Rights: Content Ownership and Distribution, visit
http://www.parksassociates.com
or contact 972-490-1113 or
sales@parksassociates.com.
About Parks Associates: Parks Associates is an
internationally recognized market research and consulting company specializing
in emerging consumer technology products and services. Founded in 1986, Parks
Associates creates research capital for companies ranging from Fortune 500 to
small start-ups through market reports, primary studies, consumer research,
custom research, workshops, executive conferences, and annual service
subscriptions.
The company's expertise includes new media, digital
entertainment and gaming, home networks, Internet and television services,
digital health, mobile applications and services, consumer electronics, and home
control systems and security.
Each year, Parks Associates hosts executive thought
leadership conferences CONNECTIONS™, with support from the Consumer Electronics Association (CEA®), and CONNECTIONS™ Europe. In addition, Parks
Associates produces the online publication Industry Insights in
conjunction with the CONNECTIONS™ Conference series.
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