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The Guardian - UK
The Guardian - UK
Business
Mark Sweney

What's in store for music downloaders?

It would appear that the music industry is turning the tide in its battle against illegal downloading with the news today that the notorious filesharing site Kazaa has agreed to go legal and pay £53m ($100m) in damages to the major labels.

It is the latest of a number of high profile announcements by various industry bodies in recent weeks. Earlier this month the British Phonographic Institute, which represents the UK music industry, was granted permission to legally pursue allofmp3.com - touted as the "Russian Napster".

And two weeks ago the BPI went after what it sees as the "root" of the illegal download issue - the ISPs that filesharers have to have accounts with - calling on Tiscali and fellow internet service provider Cable & Wireless to suspend 59 UK web accounts to stamp out "industrial scale" illegal music filesharing.

Suffice to say Tiscali were not impressed, claiming they were in a way being scapegoated.

The UK arm of the Italian ISP had the month before hit out against the European music industry claiming record labels made it "virtually impossible" to promote legal online downloads after being forced to close its Juke Box service - despite gaining a license from the Italian-version of the BPI.

The death of Kazaa as an illegal service is notable - the $100m damages payout represents half of the entire value of the European legal download market in 2005, according to Jupiter Research.

However, some, such as Jupiter Research's Mark Mulligan, argue that it is a strategy that is perhaps "two years too late".

He argues that Kazaa is not the people's favourite it was several years ago, and, furthermore, the introduction of various filters to protect illegal downloading on the site could well see a mass migration making the site a has-been anyway.

Those that have migrated to the likes of iTunes are the law abiding easy sell. Filesharers are tougher nuts to crack.

Other popular sites such as Gnutella, Bit Torrent, and newcomers such as allofMP3.com are still around, at least for now.

Of course the granddaddy of all illegal-to-legal conversions was Napster. While the Shawn Fanning-created site once dominated headlines as a global threat to the music industry, these days it keeps a much more sedate profile as a legal service. Still, it is ranked 3rd most popular in the UK, with 8% marketshare according to XTN Data.

These days it is owned by a company called Roxio, and includes the failed Sony/Vivendi Universal joint venture Pressplay.

The rise-and-rise of iTunes - which may itself come under pressure if its proprietary technology is forced to be opened to competitors - hurried on the demise of Coca Cola's once bright-shining mycokemusic download service last month.

In the UK, iTunes has a 44% marketshare - the rest is fragmented with a couple of players in the low teens of percentage share and then a plethora that barely rate.

Still, brands such as Tesco, Woolworths and very late mover HMV, which launched a download service in conjunction with Microsoft shows that there is legal competition a-plenty out there.

And in May, Microsoft partnered with MTV to launch a download service called Urge that will be bundled with its next Windows software - perhaps offering the reach and penetration needed to peg back Apple.

Furthermore, with the seemingly inexorable rise of social networking sites such as MySpace - which have been used mainly as a promotional platform for the likes of Arctic Monkeys and Lily Allen - may pose a threat of sorts.

Rival, Bebo's recent announcement of a new section called Bebo Bands has added more spice to the battle of music online.

Perhaps the underlying question is whether it is possible for one brand to continue to dominate the legal music download market of the future - assuming the music industry ever wins its never ending hunt for illegal sites, that is?

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