Study: Look out labels: file swapping growing

While a hush may have descended over renegade Napster Inc., its legion of file-swapping fans are more active than ever, downloading billions of free files in August from four leading peer-to-peer sharing systems, according to a report released this week by digital entertainment researcher Webnoize Inc.

Over three billion files were downloaded in August using Audiogalaxy Inc., iMesh.com Inc., FastTrack and Gnutella systems, Webnoize reported, exceeding the 2.79 billion files that were downloaded from Napster during its heyday last February.

The Netherlands-based FastTrack offers peer-to-peer downloads, supporting a variety of formats, via its software client called KaZaa. It also licenses its network technology and software to West Indies-based Grokster Ltd. and U.S.-based MusicCity Networks Inc., which offer the Grokster and Morpheus software clients, respectively.

FastTrack was the most popular swapping system, boasting 970 million downloads in August. Next in the downloading ranks came the Audiogalaxy system, with 910 million downloads, followed by that of iMesh.com with 640 million and finally file-sharing network Gnutella with 530 million.

"Despite the recording industry's success in shutting down Napster, consumers are keen on file sharing and it will continue to increase," said Webnoize analyst Matt Bailey.

Indeed, despite the demise of Napster free-for-all download days, and the copyright infringement concerns that surrounded it, free file sharing is more popular than ever, Webnoize reported. Peer-to-peer file sharing allows users to directly swap files on their hard drives through software programs offered by companies like FastTrack, without paying fees.

Most of the files shared in August were audio files, Webnoize said, yet there was an increase in video and software swapping throughout the month.

The researcher predicted that peer-to-peer swapping will continue to grow, given a boost by its most active users -- college students. As U.S. college students return to school this month, their cheap and convenient Internet access, unlimited bandwidth and communal environment, whereby tips and trends spread like wildfire, will only give a boost to file sharing, said Bailey.

Furthermore, the technology being used in these new file-sharing systems are better than what Napster had, Bailey said, making them more attractive to users. For instance, download time is reduced due to distributed downloading, which allows users to download different pieces of a file from different users, speeding up the download time, Bailey said.

This spells more bad news for the major record labels, as well as the motion picture industry, Bailey added. With the free file sharing on the rise, they will have an uphill battle keeping control over their copyright material.

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