Kazaa to go legal, settles for US$100 million

Stan Beer
Thursday, 27 July 2006 20:56

Your IT - Home IT

Australian-based music file sharing site Kazaa will follow in the footsteps of Napster and become a legal download site. In the process, Kazaa will pay more than $100 million in an out of court settlement to the major recording companies.

With the advent of legal music download sites, such as iTunes, the illegal sites have one by one dropped by the wayside or moved to become legal accredited businesses.

Last year, the Federal Court of Australia delivered a guilty verdict to the operators of Kazaa, which was accused of breaching copyright law by encouraging users to share music.

As a result, Kazaa will pay $100 million to Universal Music, Sony BMG, EMI and Warner Music in a one-off settlement and will no longer allow users to swap music files.

The record companies and their artists have been quick to point their fingers at the illegal file sharing companies, accusing them of depriving everyone in the music supply chain of income.

However, the file sharing sites like the original Napster and Kazaa in fact proved the concept and the popularity of the music downloads market. Without them testing the market in the first place, sites like iTunes may never have come into being.

The movement of Kazaa into the legitimate music market is yet another demonstration that the recorded music industry has changed forever. Increasingly, consumers are no longer prepared to pay for entire compilations of songs from artists, many of which they may not like, just to get access to the tracks they want to hear.

In addition, music companies will find it increasingly difficult to rip-off artists and consumers, as the supply chain from recording studio to the consumer has been shortened considerably.

From the consumer perspective, downloads give them a far greater choice of listening medium at a much more reasonable price. {mosomment}