USS Clueless Stardate 20010803.0648

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Stardate 20010803.0648 (On Screen): I'm not sure I believe that peer-to-peer (P2P) can ever be a viable business model. The difficulty is that there are fundamental contradictions in the goals which can't be resolved.

A bunch of refugees from Netscape have formed a new company called Kontiki and are working on a P2P system. They are not repeating the "new economy" mistake of punting the business model. So they've concentrated up-front on worrying about how it's going to make money, but I don't think they've thought deeply enough about it. Their answer is that it would be a cut-rate competitor for Akamai. Akamai is a hosting company which has server farms placed all over the US (and probably other places in the world) with high bandwidth net connections, which will host big files for other companies. The idea is to distribute bandwidth problems, but so far it hasn't been a commercial success. The alternative for companies who want to distribute large files (e.g. video files or large flash files) has been to host them on their own servers, but it's possible to really get hammered that way. Kontiki's answer is to use a P2P system to distribute the load, at minimal cost to the content provider. All well and good, except why would individuals want to let their computers (and more important, their bandwidth) be used for distribution this way?

The problems of a P2P network is that its end-users won't pay for it. They have become accustomed to using P2P for free. Also, if they're going to spend long periods on the system (hours per week, which is essential for it to work) then it's going to be because they can trade pretty much anything on it that they want (i.e. MP3's and porn). But if it's a commercial system then it's going to have to be paid for by corporations. Advertising is out; the revenues aren't high enough. Direct sponsorship by corporate content producers would come with the string that the system be designed to prevent data piracy. That means that from the point of view of the potential users the system would be crippled because it wouldn't permit them to trade what they want on it. So you can build a system which will be used heavily but which no-one will pay for, or a system which corporations will pay for but which no-one will use. But even if the users of a P2P system were willing to pay for it (obviating the need for corporate sponsors), they'll only use it if it permits unrestricted file sharing, and in that case the system will be sued out of existence.

Which is why the future of P2P is going to be freeware running a distributed model, so there are no central servers. That means no-one has to pay for the central servers, and there are no large targets to sue, so it means it can be designed to permit unrestricted content distribution, which will make it popular with the users. With such a system in place, even if inefficient, why would users ever want to adopt a commercial system with data restriction? The essence of successful P2P is copyright violation. (discuss)

Captured by MemoWeb from http://denbeste.nu/entries/00000423.shtml on 9/16/2004