Independent Perspective News

By AMY HARMON

A growing group of online marketers have a new name for the millions of people who use Internet file-trading software to steal music: "customers."

The ranks of these marketers include independent bands with little to lose and established companies like Microsoft. What they have in common is that they are starting to view the masses of Internet pirates as a possible source of revenue. They have begun to experiment with promoting their wares on file-trading services, which are typically used to obtain unauthorized copies of music, movies or software.

Some entertainment industry officials condemn those marketing efforts as giving support to services that encourage the theft of other people's intellectual property. But the organizations promoting file-traders see it as a way to lure people away from piracy by providing them with authorized material to download — and, in some cases, asking them to pay for it.

"We're going to find that people labeled as hackers, thieves and pirates will convert and change patterns to pay for content," said Kevin Bermeister, chief executive of Altnet, which acts as an intermediary for KaZaA, the most popular file-trading software, and organizations that want to distribute legitimate materials.

Under the deal with Sharman Networks, KaZaA's distributor, Altnet's Software is automatically installed whenever someone installs KaZaA on a PC. Companies and artists seeking to market music, software or other material to KaZaA users pay Altnet to place their material at the top of the results of searches. AltNet shares the revenue with Sharman.

Users who type in "Dave Matthews Band," for instance, will get a list of the artist's tracks on the screen. By clicking on a blue icon, they can download the music free. But now, Dave Matthews fans are also likely to see, at the top of the list, gold icons offering alternative acoustic rock from the Jay Quinn Band of Dallas. That is because Mr. Quinn's manager, Cornerband, is paying Altnet to have his music appear in KaZaA listings when someone searches for music by Dave Matthews, Moby, Beck and David Gray, among others.

Cornerband, in turn, charges artists to distribute songs in a technology wrapper, supplied by Microsoft, that can prompt users to pay for a track or buy a CD when they try to play the music after a preset time period. Since about three million people are typically using KaZaA at any time, the audience that has been exposed to Mr. Quinn's music since the promotion began in September surpasses the number who have ever seen him play in local Dallas clubs.

For Cornerband, the KaZaA technology is attractive not just because of the large, interested audience using it, but because Cornerband does not incur the transmission expense of distributing music from its own Web site. With KaZaA's peer-to-peer system, users download music or other material from each other, rather than from a central site. The 29 entertainment companies that are suing KaZaA's distributor, Sharman, and other file-sharing companies, are more focused on what the mass audience is generally looking for: unauthorized copies of popular music and movies that they can get without paying. The mainstream entertainment companies take a dim view of those who are supporting the use of the technology, albeit for a legitimate use.

"At a time when the public is especially hungry for good corporate citizens," said Carey Sherman, a lawyer for the Recording Industry Association of America, "it's surprising that any legitimate interest would consider giving financial support to a pirate service like KaZaA that illegally traffics in the copyrighted works of others."

One executive at a major record company said that he and many colleagues would like to use a service like Altnet to distribute their material but that their lawyers would not allow it. Some entertainment industry lawyers fear that if Sharman can prove that KaZaA has legitimate uses, it will be harder to shut it down. Others, however, say that by displaying some material more prominently than others, Altnet's service helps to prove their point that KaZaA could block all copyright material from appearing in its search results. Sharman has maintained that it has no way to control what files users chose to use the KaZaA software.