The MP3 Winners of 2002.

By Richard Menta 1/05/03

The first of a two part year in review, we run through the winners of 2002. As with last year's list it has been a year of controversy, but also one showing a clearer trend to the future. Despite several court victories by the record industry, file trading is up significantly and record sales are down. Madster and Napster are dead and gone, but KaZaa has more than replaced them.

The jury is still out on Ogg Vorbis, the Digital Millenium Copyright Act (DMCA) and fair use in general, but this coming year may become a watershed one for the formative direction that digital content distribution will take. Our 2002 Loser list will come next.

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1. KaZaa

Think what KaZaa has accomplished in the last year alone and there is no doubt it is 2002's big winner. Last January the service was sold by the Dutch creators of the FastTrack network to an Australian concern, a move some thought was portend to the end of the service. KaZaa at that point was the number two P2P service on the Net, but it was well behind leader Morpheus and like all of its bretheren it wasn't generating much income. All that was to change.

First Morpheus gets booted off the FastTrack network, an event KaZaa's new owners probably initiated to control that network. As Morpheus rushed to switch over to the less satisfying Gnutella network, FastTrack fans flocked to KaZaa, quickly propelling it to number one. Even bigger, by midyear KaZaa was profitable, a wholly unexpected turn of events. They achieved this by stuffing the app with adware, spyware, and most notoriously Brilliant Digital's Altnet, a distributed computing program covertly placed on users machines when KaZaa was downloaded.

There was some backlash from all this, but it did not stop the flow of users. briefly pulled KaZaa from its list because of all the spyware, an event that looked to be a severe problem for the service. It instead turned out to be a most minor setback and KaZaa continued to grow. Now back on, KaZaa is the most requested app on that site pulling 3,145,095 downloads this week alone. Number two this week is another P2P client, iMesh, with 440,877 downloads or a mere one seventh of what KaZaa pulls in.

As Aussie KaZaa grew, Dutch KaZaa - now just a shell of a company - folded, but not before winning a landmark Dutch case that declared P2P services were NOT liable for the trading of copyright material. Before the case could be appealed Dutch KaZaa evaporated leaving the Dutch ruling as a precedent. This precedent now sits in Aussie KaZaa's back pocket should they ever need it.

By the end of 2002 KaZaa claimed it had 140 million worldwide users, twice that of Napster at its peak. Served off of the island of Vanuatu - a semi-safe haven for world trade - KaZaa is also proving a challenge for the American entertainment industry to sue out of existence like they did with Napster and most recently Madster (formerly Aimster).

Protected, popular and profitable. Right now KaZaa is king. Will it last?

2. Apple iPod

The iPod appeared on store shelves just a few weeks before Christmas 2001 and became a runaway hit even though it was a Mac only device. This past summer Apple introduced a Windows version of the player and it zoomed on to become the number one MP3 portable on the market. Capturing 15% of total MP3 player sales despite an average $400 price tag, Apple is looking at 4 million units sold since the iPod's introduction. Even Dell is selling iPod's now, which alone says a lot.

3. Xolox

In the end of 2001 Xolox was dead. The creators of P2P Gnutella client pulled the plug because of litigation fears from the music industry. Fortunately for the group they were based in the Netherlands where a few months later a judge ruled that P2P services are NOT liable for the content that users trade. With that precedent Xolox came back to life, a precedent that for now makes Amsterdam a safe haven for budding P2P services - until the next lawsuit.

4. Lawrence Lessig

He eloquently spoke to the Supreme Court to reduce the stranglehold on decades old content, which was further exaserbated by the Sonny Bono Act. That doesn't mean he will win the case (a case that won't be resolved until sometime this year), but he already has succeeded in bringing national awareness to the abuses that content owners have exercised in controlling older media creations. The poster boy for fair use, Lessig may top this list next year

5. Digital Video Recorders

They have grown so popular that the entertainment industry wants to snuff them out. In these post-Napster days that is a sign of success. Their inclusion on this list also is reflective of the shift that includes all digital media in the tribulations of copyright and fair use.

6. Janis Ian

A voice from the artists point of view. Like Lessig she also challenged the entertainment industry status quo and was heard. Her article The Internet Debacle - An Alternative View garnered national attention and a rebuttal from Hillary Rosen herself. An artist previously remembered as a late 60's folkie, she now watched as millions read her viewpoints and then rediscovered her music.

7. Dmitry Skylarov

Acquitted of all charges for his part in creating an Adobe eBook reader that permitted the circumvention of Adobe's copyright protection technology, a technology that was part of a protection scheme Adobe once tried to use to take copyright control of content already in the public domain like Alice in Wonderland.

The reader is legal in Russia where it was created and sold from, but Adobe claimed it was a felony in this country under the flawed Digital Millenium Copyright Act (DMCA) and had Skylarov arrested. The first test of the DMCA in the courts it was a victory for fair-use advocates and Skylarov. The Russian citizen did spend time trapped in an American prison while politicians and lawyers played tug-o-war with him, so it was still a miserable year for the guy personally. It could have easily dragged on longer, though. He also could have been convicted, so we'll take it as an overall win.

8. KaZaa Lite

Great taste, none of the fat...or spyware or adware or trojan ware. Riding the coat tails of KaZaa's success, this is the best option for file traders who want to use the FastTrack network.

Honorable Mention - Archos Jukebox Multimedia

Kudos to Archos for not only creating the first MPEG-4 mediabox, but for doing such a good job of it.


The ultraslim iRiver SlimX MP3/CD player is available at Amazon

Other MP3 Stories:
The MP3 Losers of 2002
Shareaza Interview
Jon Johansen - v - Hollywood
Blubster: Reloaded


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