Building the Tools to Legalize P2P Video-Sharing

noankmediaWould you be willing to pay your ISP five bucks a month to be allowed to download as much as you want from torrent sites and other file-sharing hubs? The idea of legalizing P2P through such a flat-rate licensing scheme has been getting more and more traction within the music industry in recent months. Noank Media CTO Devon Copley believes his company can be an essential part of such a flat-rate model.

Noank, which demonstrated some of its technology at the DCIA’s P2P Media Summit in Los Angeles this week, builds tools that help to measure what kind of files users consume in flat-rate licensing environments. However, there’s something particularly intriguing about Noank’s solution: It works for video as well. Even the most vocal proponents of legal P2P rarely dare to suggest that Hollywood’s movies should be paid for by an ISP fee, but Copley believes such a development is inevitable.

Faced with years of brutal sales declines, the music industry has started to embrace the idea of legalizing P2P file-sharing through an ISP fee. Warner Music hired music industry veteran Jim Griffin last year to create a licensing organization called Choruss that’s currently signing up campuses for flat-rate licensing field tests. The Isle of Man, a small tax haven located between the UK and Ireland, is working on its own flat-rate model. Canadian songwriters recently threw their support behind a flat-rate model, and most major labels seem to be at least open to discussions.

One of the early proponents of an ISP licence was Harvard professor Terry Fisher, who published a book about these kind of alternative compensation models in 2004. But Fisher didn’t just want to write about his ideas, which is why he founded Noank Media as a spin-off of Harvard’s Berkman Center in 2006.

Since then, Noank has been developing a registry for rights holders as well as a client-based reporting technology to track media use. The company did a first test of its technology with the Hong Kong-based ISP Cyberport last year that included both music and video content. Noank is also looking to be part of future music licensing field tests.

Noank’s software essentially counts each and every play on a user’s system, identifying files through both hashing and audio fingerprinting. The client can not only count how often a file is played, but also for how long. Let’s say a user starts watching a video, but decides to skip forward through a dialogue. Noank’s software would know which parts he watched, right down to the minute level. These media usage details are collected on a user’s machine and then periodically uploaded to Noank’s servers — unless the user decides to opt out.

Copley told me when I caught up with him after his keynote that the possibility to opt out is essential to Noank’s approach of data collection. “We had a fair amount of spirited internal debate about whether reporting ought to be voluntary,” he said. One of the main concerns was that voluntary reporting might lead to an undercount, particularly of long-tail content. But in the end, everyone agreed that the privacy of end users should come first. After all, a system like this one would really only work with users willing to participate.

Of course, Hollywood isn’t particularly excited about the prospect of legal file-sharing. “It will take a lot longer for the video industry to buy into it,” Copley admitted. “It may take the dire straits that the music industry is in right now before they are willing to abandon the retail model.”

However, he doesn’t doubt that this time will come, spurred by the increasing amount of bandwidth that users have available to swap files. Initiatives like Choruss may help as well, mused Copley: “If the music industry manages to prove the model and manages to see a resurgence in revenues, then maybe we will see other classes of content jumping on the bandwagon soon.”