P2P's Hit on Software, Video, and AOL

I've been particularly amazed at both the 1) ease and 2) variety of pirated copyrighted software packages on Kazaa (and the other peer-to-peer file sharing systems). It's as easy as typing in the application name and downloading whatever you wish. It's clear that the hit that the music industry is taking regarding album sales will soon transfer to software itself and then to video. The software piracy industry once had the need to go develop relations with the 3l1t3 HaX0rs out on IRC and learn how to use FTP. Today, anonymity is provided easily through a P2P file sharing app. Kazaa today is easy enough for even the most backward of 12-year-old kids.

Video will be the next hit after software. Fortunately, for the movie studios and distributors, the hardware (mostly disk space requirements) and bandwidth haven't caught up yet. But, it's coming quickly. People have mentioned to me that it'll be interesting to see how the likes of TiVo, etc. are able to capitalize on the allowing people to buy and download movies onto their set-top boxes. I think this will not take off, as P2P will hit it as well. Why pay $3 a movie when you can just download it yourself onto the PC and then copy it directly to your TiVo?

Perhaps this also signals an interesting development around the combination Pipe+Content companies that were created in the late 1990's. The foremost example here is AOL. Sadly, AOL is providing 1) content, for which margins will be decreasing greatly and 2) a pipe to the Internet, which is commoditizing. Perhaps it's time to sell AOL and perhaps this is the reason that Ted Turner is so pissed at Steve Case.