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TheStreet Open House

Why File-Sharing Piracy Will Never Die

Think online file sharing is dead because the Supreme Court whacked Grokster? You need to talk to James.

James, a 25-year-old music fan and avowed Internet pirate who works as an electrician by day, spoke to TheStreet.com on condition his last name not be used. For him, this week's legal defeat for the peer-to-peer client Grokster has meant few sleepless nights.

"There are so many people working in the shadow Internet," he says. "I don't see the impact."

According to data compiled by BigChampagne, an online media tracking service, roughly 6 million people a month use peer-to-peer software over the Internet in the U.S. The number is conservative because it excludes wireless networks, instant messaging and email, and the increasingly popular protocol known as BitTorrent that splices files from different senders.

"What everyone forgets is that the Internet was designed to facilitate file transfers. It's completely agnostic," said Joe Fleischer, a BigChampagne co-founder. He says Monday's ruling amounts to a big "who cares" and warns that big media will end up looking foolish trumpeting a courtroom victory when illegal activity soars.

To be sure, Monday's Supreme Court's ruling deals a blow to users who want a dedicated application to exchange media content for free. Grokster and other outfits like it stand to be held liable if consumers illegally exchange songs and movies using their technology.

For James and his tech-savvy pals, however, the landscape on which they share music and video files is ever-changing. Increasingly, it encompasses territory such as online chat and instant messaging, in which assigning liability to a specific piece of software could be impossible.

"The analogy that comes to mind is fingers in a dam," one media consultant says. "They win a court victory, but the peer-to-peers will just find a new way to do it. You can't really win the fight against tech progress."

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