Free Market using P2P - rooting our the very concept of piracy

July 2nd, 2005 by sameer | Posted in Ideas |

Problem
The problem with P2P software is that they allow people involved to share media illegally. Due to this the record labels etc are incurring losses.

Solution
We need to integrate the ability to associate the concept of “paid sharing“. Simply stated it means that you can configure your Kazaa, WinMX, eDonkey etc to charge a preset amount of money for allowing someone to download a particular file. This simple ability changes the whole dynamics of this problem.
The reason P2P is viewed as “dangerous” by the Record Labels is because of its inability for e-commerce. Due to this, every file shared using P2P is always illegal.
But if paid sharing is implmented an existing record label can also log into any P2P software and dish out new/old content while thier cash registers ring.

The consequences
There is only one problem in this solution. If Mr.X buys a song from Record Label (RL), then he would’ve to pay something, say $1 per song. Now Mr.X can either charge the same money for that song being downloaded off him, or he can sell it for lesser, say $0.5 / song. This might make his offer more compelling and Mr.Z might then buy the song from Mr.X and not RL.
Due to this, RL might lose on revenue as by each sale, they are actually creating a potential reseller.

The Solution
A possible solution to the above problem would be the “single sale full returns” approach. This approach says that the first sale itself should cover the complete cost price and all the profit that we ever intend to make. i.e. supposing a record company expects to make $10 million on a particular record, then they should sell the first master copy of the record for $10 million itself. As soon as their sale is made, their mouths are shut and they are happy and content with the “money they made”.
Now, Mr. X, who has bought this record for $10 million will be able to sell around 10 copies of the record for $2 million each, earning him a hefty profit. The Mr. Ys, who will buy it from him, will sell further 10 copies each for $1 million each and again make a good profit.
This chain will continue until finally the distribution becomes inexpensive or completely free.

endnote
The above solution, if implemented, will solve the issue of piracy completely. Once the whole P2P world starts using “shared payment” then it can actually become a great business to have a broadband connection and be connected to various P2P networks.
The possibilities are endless, P2P auctions, P2P sellers with good ‘karma’, Banned P2P sellers, Big P2P buyers. The prices can be dynamic, everything should be totally flexibe and unpredictable - that’s the only real solution to the problems we face.

Don’t try to close the gates, just open them wide and flow with the tide.