The Kazaa file-sharing network attracted tens of millions of fans -- and angered record labels and Hollywood studios -- by enabling users to copy songs, movies and other digital files from one another's computers for free.
Now, one of Kazaa's partners is trying a novel strategy to reduce piracy and win over the labels and studios: paying users to share files authorized for distribution.
The incentive program is being launched Wednesday by Altnet, which uses Kazaa's peer-to-peer network to distribute songs, games, movie clips and other files authorized by copyright owners. Unlike most of the material available through Kazaa, Altnet's files are protected by electronic locks that control how files are opened and used.
The "peer points" program offers $250,000 worth of prizes each month to people who transmit the most files to other Kazaa users. But the only files that earn points are the Altnet ones, not the pirated wares that dominate the network.
The move is a bid by Altnet, a unit of Woodland Hills-based Brilliant Digital Entertainment Inc., to attract more entertainment and software companies to its fledgling service.
The first reaction from the Recording Industry Assn. of America, however, was guarded.
"We think it's great when there are systems out there that respect an artist's choice over whether or not to distribute their music for free," said Matt Oppenheim, the RIAA's senior vice president of business and legal affairs. "While Altnet does it some of the time, the [Kazaa] system by and large doesn't do it, and that's a problem."
Altnet has been shunned by the major record companies and Hollywood studios because of its association with Kazaa, which the companies are suing for copyright infringement. Meanwhile, video game publishers, independent record labels and other copyright owners are using Altnet to deliver about 20 million files per month, making it the largest distributor of content protected by Microsoft Corp.'s anti-piracy technology, according to Altnet Chief Executive Kevin Bermeister.
In a peer-to-peer system like Kazaa, a user can act as both consumer and distributor. User Smith, for example, is a consumer when she downloads a copy of Madonna's "American Life" music video from another Kazaa user. And she's a distributor when she puts the video in a shared folder and another Kazaa user downloads it from her.
