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Ezpeer is making sweet music -- and now it's legal

Ezpeer, the nation's second largest peer-to-peer (P2P) operator, announced yesterday that it had reached agreement with major record labels to distribute authorized music, making it the first legal P2P file-sharing operator in the greater China region.

The reconciliation between Ezpeer and copyright holders came as a surprise. The Shilin District Court ruled in June last year that Ezpeer was not guilty of infringing on intellectual property rights (IPR) by providing a for-fee platform for subscribers to swap files.

"When the verdict was announced a year ago, I called it the darkest day for the music industry," said Robin Lee (李瑞斌), secretary-general of the International Federation of the Phonographic Industry (IFPI) in Taiwan, which filed the lawsuit against Ezpeer.

"But now, I say today signals the dawn of new hope for the industry," Lee said at a press conference yesterday.

Ezpeer's larger rival Kuro, operated by Fashionow Taiwan Inc (飛行網), might also favor a concession, Lee said.

Kuro's top management, including its chairman, chief executive and president, were found guilty of violating IPR by the Taipei District Court in September last year. The trio were sentenced to two to three years in prison and fined NT$3 million (US$91,968) each.

One public relations official at Kuro told the Taipei Times that the firm was delighted to see Ezpeer's new business model, and "hopes to work toward that direction."

Both Lee and Kuro refused to comment on whether the two parties are in talks on a settlement.

Talking about the long-awaited cooperation, Lee said that P2P operators and record companies had differed greatly in defining P2P technology at the start, as P2P operators considered it a neutral tool while record firms deemed the tool a facility to infringe IPR.

However, as P2P operators encountered repeated setbacks internationally over the years, they gradually turned to partnerships with copyright holders.

This helped local operators realize that this was the right way to make their business sustainable, Lee said.

The new Ezpeer -- "Ezpeer+" -- will be opened for testing today and may be launched next month, said Alin Wu (吳怡霖), president of Darling Digital Technology.

As KKBOX and Yahoo-Kimo Inc (雅虎奇摩) have entered the legal online music market earlier and saw substantial business, Ezpeer+ hopes to expand on its current subscriber base of 300,000, Wu said, without giving a specific goal.

Ezpeer+ charges P2P users — including members of Ezpeer or other operators — a monthly fee of NT$99 for unlimited swap. Newcomers will have to pay a monthly fee of NT$149 to exchange music files and play on the computer. The company is also working in cooperation with Chunghwa Telecom Co (中華電信), whose Hinet users can log on to the Ezpeer site with their Hinet accounts.

Users who wish to download the files into their digital music players will need to pay NT$249 per month. The downloaded files are in WMA format only, Wu said.

To ensure the quality of the files, record companies will provide Ezpeer+ with their music files, which will be labeled as “golden files” for swapping, Wu said.

When the service is officially launched, there will be 500,000 golden files ready for exchange, he said.

Second-hand files that are circulating among users will be marked “player files,” Wu said.

Profits given to copyright holders — record labels, composers and the Music Copyright Intermediary Society of Chinese Taipei (中華音樂著作權仲介協會) — will be calculated by the number of times a song is played online, Wu said.

He refused to disclose the split percentage, citing confidentiality agreement.
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