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Nov 25, 2002
The Darknet and the Future of Content Distribution
Impressive white paper by four Microsoft researchers titled "The Darknet and the Future of Content Distribution" (1 MB Word file, so be patient; via BoingBoing). It explores the history of small-world networks content sharing before the Internet (remember copying music from your friends onto tapes?), with the advent of the Internet (central servers), and with massive peer-to-peer systems like Napster or Kazaa, and it shows how we might actually come back to technologically-enhanced small-world networks due to expected inherent failure of global peer-to-peer systems. But it also shows how interconnection of those small-world networks will probably make sure everybody still has access to the most-wanted content for free. Coutermeasures by content owners like digital-rights management, watermarking and similar efforts have largely proven unsuccessful, and the paper forcefully argues they will continue to be.
The paper closes with a great business-related observation:
There is evidence that the darknet will continue to exist and provide low cost, high-quality service to a large group of consumers. This means that in many markets, the darknet will be a competitor to legal commerce. From the point of view of economic theory, this has profound implications for business strategy: for example, increased security (e.g. stronger DRM systems) may act as a disincentive to legal commerce. Consider an MP3 file sold on a web site: this costs money, but the purchased object is as useful as a version acquired from the darknet. However, a securely DRM-wrapped song is strictly less attractive: although the industry is striving for flexible licensing rules, customers will be restricted in their actions if the system is to provide meaningful security. This means that a vendor will probably make more money by selling unprotected objects than protected objects. In short, if you are competing with the darknet, you must compete on the darknet's own terms: that is convenience and low cost rather than additional security.
Posted by Stefan Smalla on Nov 25, 2002 at 9:46 | Permalink