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The entertainment industry, with the Big Five record labels and major movie studios to the fore, is one of the wealthiest corporate sectors in the world. And yet it's in deep trouble, or so it says, the latest complaints emanating from Big Music spokesman Mitch Bainwol in a letter to the US Senate demanding that the Hollywood-inspired INDUCE Act on copyright infringement be adopted.
But if that's the case -- if there is indeed suffering and terrible hardship and huge financial losses -- why isn't industry representing its investors and the people who work for it to the best of its abilities using the burgeoning world of online digital distribution as its major recovery tool?
The Internet is awash with "plastic" corporate music sites selling the same tired "product" made and supplied by the Big Five, but none of them, including Apple's (Nasdaq: AAPL) much-vaunted iTunes, are even close to tapping the enormous potential offered by digital downloads.
More People Online
In fact, they're not tapping it at all.
Last month, 8,324,299 people were on peer-to-peer (P2P) networks at any given moment, with 1 billion files (at a conservative estimate) moving among computers around the world.
The figures come from Big Champagne CEO Eric Garland, who told me that in May, 9,279,585 were online at any one time, and in April, the figure was 9,473,785.
If the entertainment industry would get the message and use P2P for sales and marketing -- as Mike Robertson is doing with Linspire -- it would dramatically improve returns for its investors.
Wasted Money
Instead, it spends untold millions trying to defeat the undefeatable: downloading and file sharing.
Meanwhile, more and more people are logging on, and it won't be long before the Internet is the principal means of communication around the world.
With that in mind, if music, movies and software were sold and distributed inexpensively online, there would be very little physical product. There would be a massive drop, certainly, but it wouldn't be in sales 
.
Rather, you would see a significant reduction of overhead, distribution, manufacturing and legal costs; illicit CD/DVD operations would wither, and there would be a concomitant reduction in the pirate problem -- the real one, not the fake one involving ordinary people who share online.
The Statistics
Users online on peer-to-peer networks at a given moment:
June 2003: 6,818,050.Clearly, it's all happening online, as these Big Champagne Internet File Tracking figures prove without a shadow of doubt.
July 2003: 6,534,110.
August 2003: 6,294,525.
September 2003: 7,399,311.
October 2003: 8,759,051.
November 2003: 7,680,854.
December: 2003: 8,671,136.
January 2004: 8,767,241.
February 2004: 8,888,768.
March 2004: 9,453,940.
April 2004: 9,473,785.
May 2004: 9,279,585.
June 2004: 8,324,299.
Jon Newton, a TechNewsWorld columnist, founded and runs p2pnet.net, a daily peer-to-peer and digital media news site focused on issues surrounding file-sharing, the entertainment industry and distributed computing. p2pnet is based in Canada where sharing music online is legal.
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