Peer-to-Peer Market Places: Technical Issues and Revenue Models

Abstract

Recently, Steve Jobs, in his public “Thoughts on Music”, pointed out the Digital Rights Management (DRM) systems that Apple has been imposed to adopt for protecting its music against piracy. This brings to a paradox: DRM-protected digital music is prevented from being played by devices of different producers. Conversely, DRM-free content, that uses “open” formats (e.g., MP3 for music and MPEG4 for movies), can be downloaded, distributed, copied and played on different devices. This is an implicit disincentive to legally buy copy-protected digital content, because DRM-free files are interoperable: in fact, 97% of the music filling iPods is unprotected and of obscure origins. Jobs’ conclusions are quite astonishing: abolishing DRMs entirely and selling music encoded in open licensable formats. However, there is no obvious reason for believing that piracy would decrease even if the Steve Jobs’ dream for a “DRM-free” world will finally occur. This implies that future legal market models have to consider serious, scalable, efficient, secure and reliable alternatives to DRM-based on-line (centralized) stores. The Peer-to-Peer paradigm provides a quite mature framework for this applicative domain, making digital content sharing applications a valid solution even for small vendors and emerging artists. In fact, small-medium parties of a market place could hardly afford production and maintenance costs that can be very high if distribution is provided by means of a resilient client-server architecture (e.g., iTunes, Yahoo!, Microsoft Media Shop). But, despite to their big potentials, Peer-to-Peer systems have became infamous through the file sharing applications that make easy for the users to access copy-protected files for free; in fact, it is very difficult to trace the peers’ activity, and identification of abuses cannot be fairly performed because of the absence of a central authority. Moreover, a business model is hard to find: it is questionable if other actors than the owner of an object should be involved in a transaction as a provider. The p2p distribution framework leads to technical advantages, but its economical benefits are not clear: the receiver of the bought object can become the distributor later on, but why should he/she provide properly the content if the owner wants to be reimbursed? The tutorial will cover other important services that a market place must include: reputation management, implementation of different preliminary transactions (e.g., bartering, bidding an offer, auctioning), and accounting in decentralized domain. Finally, social networking and self organized communities can be exploited in order to enforce epidemic phenomena and word of mouth marketing. No need to be said, the proper interoperability of incentive strategies, reputation and trust management, accounting solutions, and efficient networking (e.g., search and peer’s cooperation) techniques is critical.