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By Suzanna Kerridge, 29 October 2001 17:40

NEWS Napster has seriously damaged the credibility of file sharing services to the extent that peer-to-peer businesses will struggle to become financially viable. Since legal proceedings started against the music file swapping service in February, the number of active file swaps has decreased by nearly half. Mike Mulligan, analyst at Jupiter MMXI, said: "The whole Napster experience tainted file sharing, Now when corporates think about it they think of copyright infringement. But they also have the wider problem of turning it into a revenue generator." Richard Eckel, vice president at Groove Networks disagreed. "It's really a double edged sword. Napster educated a lot of people on what P2P actually meant, but then it also gave businesses a negative impression that it was to do with copyright infringement. P2P provides a great opportunity for small groups of people to collaborate on projects," he said. How businesses charge for file sharing services is a real stumbling block, Mulligan said.
A subscription model is the most sensible way to charge for P2P he claimed, as the micro payments model proved to be a damp squib. "The rental of software for those who can't afford the whole XP licence fee is definitely possible. But then you get to the stage where the line is blurred between what is subscription and what is P2P," he said.