The World of Peer-to-Peer (P2P)/What is Peer-to-Peer (P2P)/Economics Perspective
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[edit] From a Economics Perspective
For a P2P system to be viable there must be a one to one share of work between peers, the goal should be a balance between consumption and production of resources and maintaining a singe class of participant on the network. Most P2P systems still have an hard time creating incentives for users to produce, most P2P system generate a pyramidal scheme as users interact within them this makes those systems depend on the network effect they create. The more users the system has, the more attractive it is (and the more value it has) as any system that depends on the network effect, it's success is based on compatibility and conformity issues.
In 2008, Michael Heller, an academic at Columbia University in New York, in an interview to technology law podcast OUT-LAW Radio ( Listen to: Are patents and copyrights making innovation impossible? OUT-LAW Radio, 28/08/2008 ) presented his theory, saying:
- "I discovered a paradox in the free market and it is this: usually private ownership creates wealth, but too much ownership has the opposite effect - it creates gridlock,". "When too many owners control a single resource – it can be a patent, a copyright, land – when too many people control a single resource, co-operation breaks down and wealth disappears. Everybody ends up losing.".
- "Imagine a drug developer walking into an auditorium and seeing 50 or 100 or several hundred patent owners, each with their essential patent on their lap, and the drug developer knows that unless he's able to negotiate successfully with every single one of those patent owners, his drug can't come to market,".
- "A standard, when it works, can solve the problem of gridlock. But to create the standard you need to get, in the context of a DVD, seven or eight hundred separate patents pooled together into a single patent pool; but there are many areas that we don't have because entrepreneurs can't get the pools together or can't get the standard negotiated.".
Heller has also published a book, The Gridlock Economy in it he expanded on his theory how too much ownership wrecks markets, stops innovation and costs lives.
[edit] Content for money
- The privatization of the production and distribution of Cultural goods.
P2P radically shifts the economics of distribution. Since most content is virtual, made only of information. This information can be any type of non material object that is made from ideas (text, multimedia, etc.). In this way content is also the myriad ways those ideas can be expressed. It may consist of music, movies, books or any one single aspect, or combination of each.
[edit] Music
In todays interconnected world the distribution channels are so diversified that creating artificial control schemes will only degrade the level of satisfaction of consumers without increasing product value but incrementing the costs to the sanctioned distributors. If costumers are faced with a product with DRM, unauthorized copies if made publicly available, will create a competing product without limitations, thus creating a better product with a better price tag. In fact the use of DRM promotes the creation of a parallel market (if one can call it that because most offerings are gratis), this results from the consumers wishes are not being satisfied by the primary offer.
[edit] Video
- Movies
- TV
Recently some television networks are rethinking their approach to audiences, this has resulted from the level acceptance and interest that DVD show collections were having and several online attempts to improve distribution. Since now anyone can easily illegally download their favorite shows, a problem similar to the fragmentation of the distribution channels as seen in the music recording industry with the rise of alternative delivery technologies will have a similar result if television industry fails adapt and fill the audiences expectations of quick and easy accessibility to new fresh content.
[edit] ISPs
ISPs have been shaping/throttling P2P traffic, especially the more popular networks for years, resulting on an ongoing cat and mouse game between ISPs and P2P developers. In the US the network neutrality discussion and recently the evidence of this actions by ISPs against P2P traffic has turned this matter into a political issue.
In November 2007, Vuze, creators of Azureus (a Bittorrent application), petitioned the FCC, resulting in a FCC hearing held in December 2007. One of the issues raised there, was the level of data available on BitTorrent throttling. This lead to a statement by the General Counsel at Vuze, Jay Monahan; “We created a simple software “plug-in” that works with your Vuze application to gather information about potential interference with your Internet traffic.”
This plugin has been gathering more hard data on the actions of ISPs, resulting in a growing list of ISPs that interfere with P2P protocols is maintained on the Azureus WIKI ( http://www.azureuswiki.com/index.php/Bad_ISPs ).
