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Anything you can do . . . I can do, too!

Fri, 11/30/2001 - 7:00pm
Roger Brown

Google factor: 367,000

It's an old axiom that consumers don't buy technology, they buy applications. It's also true that many emerging technologies gain favor because of applications that literally spring up out of nowhere, but are so compelling that they capture the public's fancy.

That's exactly what happened when Napster burst on the scene a couple years ago. This innovative service used a technology called "peer-to-peer" networking that allows every computer that's hooked into the network to act much like a server.

That meant that if you wanted to find and download a specific song, or view what was available from a certain artist, the software would show you what was available. To do that, it peered into all the computers that were currently tied the network. So, if John in San Francisco wanted to find an obscure song and Caroline in Milwaukee had it, John's computer contacted Caroline's and copied the song.

Pretty neat, huh? Consumers certainly thought so. When cable operators first began rolling out high-speed data modems to consumers, Napster enjoyed unbridled popularity and success. No longer encumbered by dial-up modem speeds, cable modem users could download songs in the blink of an eye. And Napster was happy to oblige.

Too bad it was illegal. Trading music on the Internet broke the royalty payment business model and threatened to commoditize the intellectual property of recording artists and their publishing houses. That was bad.

In the end, Napster was ordered to cease making copyrighted material available to the public, but it exposed a tremendous opportunity for peer-to-peer networking technology. Couple that architecture with the high-speed pipes provided by broadband service providers, and suddenly there's a market for shared audio, video and other multimedia.

Research from P2P analyst firm PeerToPeerCentral.com suggests that the Web content delivery services market should climb from about $404 million in 2001 to $3.1 billion in 2005–and peer-to-peer delivery companies could grab anywhere from 2 percent to 17 percent of that market.

While it's certainly too early to pick a sure winner, new companies like vTrails, ChainCast Networks, AllCast and Kontiki has sprouted up with "centrally mediated" P2P, which means the all-important digital rights management has been built in to the technology from the start. They join the big, established companies like Akamai and Digital Island in pursuit of the market.

An ARC Group analysis suggests that "Napster-like" downloading of digital video has already begun among early adopters who are taking advantage of compression technologies like DivX and file sharing protocols like those used by Gnutella. It will be up to movie studios to create a legitimate market before it becomes an organized group of outlaws that steal movies and other services.

In fact, many analysts suggest that's the motivation behind the movie studios banding together to support "Moviefly," a video on demand service aimed at Internet users.

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