Record labels give file sharing a try

San Jose Mercury News: Three major labels OK file-swapping trial run.

In another deal that signals the music industry's increasing willingness to co-opt rather than crush file-swapping technology, three major record labels have agreed to distribute songs through a new online service expected to debut early next year.

Sony BMG Music Entertainment, Universal Music Group and Warner Music Group are expected to announce today that they will distribute songs for purchase on a file-swapping network called Peer Impact. ...

You have to read farther down, however, to learn that the service will be laden with DRM:

One music-industry insider said Peer Impact would be a private network that would distribute songs cloaked in rights-management software. Songs would be sold two ways: through a traditional download store, or by letting purchasers obtain a digital key to unlock and buy a copy of the file directly from another user's computer. ...

Michael Gartenberg, research director of Jupiter Research in New York, expressed doubt that licensed file-sharing would appeal to current users of Kazaa and other networks.

He said Peer Impact fails to capture what fans of unlicensed file-sharing networks love about the experience: the availability of millions of files that allows rare, sometimes quirky musical discoveries. He acknowledged that part of the allure of file-sharing networks is that the music is free. But that's only part of the story, he said.

``Napster was far more than just being some peer-to-peer technology. The technology isn't that hard to do. It's having the depth content behind the peer-to-peer,'' said Gartenberg. ``At the end of the day, simply creating a music store and creating peer-to-peer technology for users to share protected files that have to be purchased isn't going to change the landscape dramatically.''

Absolutely right.