KaZaa Settles with Hollywood. Skype Founders Pay Too

By Richard Menta 7/28/06

After years of acrimonious court actions, file sharing service KaZaa has agreed to terms with the record industry. Sharman Networks, the corporate parent of KaZaa, has agreed to pay Hollywood over $100 million dollars in damages (ABC News claims $150 million, while the San Jose Mercury News quotes $115 million). In return, KaZaa will not be shut down, but will continue to operate as a licensed service that will sell copyrighted music, while filtering out unauthorized copies.

"Kazaa was an international engine of copyright theft which damaged the whole music sector and hampered our industry’s efforts to grow a legitimate digital business," said IFPI chairman John Kennedy. "It has paid a heavy price for its past activities."

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Reuters is also reporting that KaZaa creators and later Skype founders Niklas Zennstrom and Janus Friis will also pay out money to settle the lawsuit. Said a Sharman spokesperson, "They are one of the parties contributing to the settlement figure."

Once the number one file sharing application, KaZaa and the underlying FastTrack network have steadily lost it audience over the last few years. As Slyck Editor Thomas Mennecke pointed out "...since that time, Kazaa and the FastTrack network has degraded. The lack of meaningful updates to the protocol and the application has allowed other more sophisticated technologies to surpass this network. FastTrack's population has been cut in half in reaction to the RIAA's lawsuit campaign and because of the application's inherent inadequacies. What's left is a shell of a P2P network, and a remaining population that will likely not react well to filtered content. ".

Meanwhile, clones of the KaZaa application will continue as they are on the FastTrack network.

Other MP3 stories:
More iPod Killers for Summer 2006
DRM is Like Paying for Ice
Review: Neuros MPEG4 Video Recorder 2

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