File-sharing Networks Return with Legitimate Ways to Share Music -- and Make Money

After the U.S. Supreme Court declared in 2005 that Internet file-sharing sites Grokster and StreamCast had illegally aided their customers’ efforts to share pirated copies of copyrighted music and video files many commentators predicted the demise of businesses that depended on online file-sharing. But new start-ups say they have found ways to make peer-to-peer (often called P2P) file-sharing legal and perhaps profitable. Still their business plans need tweaking according to a paper published recently by Wharton professor Kartik Hosanagar and two University of Washington colleagues. One suggestion: The networks should sometimes be willing to pay more than they get for content.

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