e-commerceg1-c1 p2p
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Group 1Proudly present…
P2P NETWORKS ROCK,Music Industry Rolls.
Agenda
• P2P Definition
• Evolution of P2P
• Case Study Question and Answer
Agenda
• P2P Definition
• Evolution of P2P
• Case Study Question and Answer
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
Agenda
• P2P Definition
• Evolution of P2P
– Napster
– KaZaa
– Bittorrent
• Case Study Question and Answer
Napster
The first world champion of
free music downloads
History
• Founded in 1999 by • at age of 19 !!!
• Specialized exclusively in music in the form of MP3 files
• Presented a friendly user-interface
Shawn Fanning
Sean Parker
History
• In February 2001 the program hit global use by 26.4
million users
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?
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
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 andUnlimited On-Demand Streaming Music
Here and Now
What is Kazaa?
Kazaa is a peer-to-peer file sharing application using the FastTrack protocol and owned by Sharman Networks.
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.
Against the law suite
2001-Mar
2001-Jun
Kazaawas founded
Napsterwas ordered to shutdown
2001-Nov
Consumer Empowerment was suedby Dutch
2002-Mar
Court reversean earlier judgment
2002-OCt
Sharmanwas suein LA.
2003-Feb
RIAA filed lawsuit against 261 individuals
2004-Feb
Sharmanwas usedin Australia
2005-Sep
Court OrderTo filterCopyright content
Against the law suite
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
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)
Bittorrent Conponent
• Client : Tracker Client Program
• Server : Collect Torrent File & Tracker
– Close System
• Member / Ratio (Upload / Download)
– Open System
• Torrent File
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.”
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??
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
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
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.
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 interestedin 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
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)
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.
/*AninPurnasugandha*/
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/*BordynCheevatanakonkul*/
/*CharliePongsangangan*/
/*Porntip Wijitrattanachai*/
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/*Sedtha Jittiarunchai*/
The EndSee you again at Final Project