Peer-To-Peer Lending Sites Weather Credit Market Storms

Predictions

from the distributed-credit dept

Will all of the turmoil in conventional credit markets spur greater interest upstart peer-to-peer lending exchanges? It seems possible, since, in a way, sites like Prosper and Zopa are the antithesis of the highly impersonal, securitized industry that’s facing so many problems right now. From the outset, these P2P lending sites have emphasized diversification, manageable risks and direct relationships between lenders and and borrowers. Whereas traditional loan brokers are closing their doors left and right, these sites continue to do brisk business. Lenders aren’t seeing mass defaults, because the standards have been high since the beginning. Of course, the scale is different. You still can’t finance a house through one of these sites, but for other needs, they may work just fine. Between the lack of available credit to consumers and a desire to diversify investments on the part of individuals, this moment in the business cycle offers these sites an excellent chance to really prove their worth. Update: A number of commenters make some interesting points about default rates, suggesting that they may be higher than these sites would have you believe. Also, it’s pointed out that there are a number of users playing both sides of the game — borrowing at one rate only to lend out at a higher rate, which is not so different than traditional financial institutions.

Filed Under: credit, p2p

Are U.S. Educators On The Wrong Side Of The Copyright War?

Ramblings

from the sharing-information-is-a-good-thing... dept

Last month, the entertainment industry (with the help of Senator Harry Reid) slipped a nice little amendment into the Higher Education Reauthorization Act, which funds colleges and universities as well as students. The amendment would require universities block p2p file sharing or lose funding. A number of universities complained (reasonably) about the expense involved in doing so, but some are arguing that it’s about time that universities got away from just the cost argument and stood against this on principle. John points us to an argument for why universities should be fighting back against copyright maximalism, noting that, of all places, universities should recognize the benefits of a freer flow of information, and how trying to artificially limit information only leads to problems. The author notes that the high price of college textbooks should be example number one of how copyright can hinder the educational purpose of a university by artificially driving up the price. Of course, these days it seems like too many of the myths from the entertainment industry have been accepted as fact — so it seems unlikely that universities will stand up against dangerous copyright practices any time soon.

Filed Under: congress, copyright, p2p, piracy, politics, universities
Companies: congress

Skype Outage Highlights How Skype Is A Bit More Centralized Than Expected

(Mis)Uses of Technology

from the p2p-or-p2c2p dept

Lots of folks (including many of us here at Techdirt) have discovered that VoIP/IM service Skype is having a pretty massive outage right now, where most, if not all, Skype users simply cannot login. There are plenty of alternatives for people to use, but for those who are used to using Skype (or who use it as a phone replacement, as some do), it’s probably a bit of a nuisance. Still, this has to raise some questions. Part of the value of P2P networks was supposed to be their lack of a central point of failure. The idea was you couldn’t easily take down (or censor) a P2P network for that reason. With Skype, the fact is that it wasn’t completely a P2P app, as the authentication was still centralized. However, this may make some people wonder. After all, there were accusations in the past that Kazaa wasn’t really decentralized, and it was Kazaa’s founders who built Skype — and some have said that they simply reused Kazaa’s underlying code in building Skype. So, don’t be surprised to see some question how decentralized Skype really is after seeing a failure like this one.

Filed Under: outage, p2p, skype
Companies: skype

Limewire Becomes The Latest P2P Company To Try And Go Legit

(Mis)Uses of Technology

from the been-down-this-road-before dept

P2P company Limewire, one of the lucky recipients of an RIAA lawsuit following the Supreme Court’s Grokster decision, has announced that it’s going legit and trying to shed its image as a treasure trove of unauthorized content by opening a DRM-free music store. While it’s nice to see more companies become DRM-free music retailers, it’s hard to see Limewire succeeding where so many other P2P operators have failed. As Om Malik notes, plenty of them have gone down this path, and none of them have really seen any success. Their user bases simply shrug and move on to the next network — and there’s no sign that things will be any different for Limewire.

Filed Under: file sharing, music, music downloads, p2p
Companies: limewire

Mixing Business With Gov't Stupidity: General Clark Tells Congress Why It Should Regulate P2P (And Make Him Richer)

Say That Again

from the all-about-the-money dept

Remember the ridiculous story last month about how some clueless politicians were blaming the fact that some government employees were breaking rules and too stupid to understand how P2P software worked that P2P software needed to be regulated for the good of national security? It turns out that there’s even more to this story. Congress called in a “star witness,” in former presidential candidate General Wesley Clark, who took the position that P2P must be regulated: “If you saw the scope of the risk, I think you’d agree that it’s just totally unacceptable. The American people would be outraged if they were aware of what’s inadvertently shared by government agencies on P2P networks. They would demand solutions.” And what kind of solutions would those be? Apparently, the kind whereby the gov’t regulates P2P providers and requires they build in security. And what kind of security would that be? Why, perhaps the kind of security supplied by a company advised by the very same General Wesley Clark. We won’t even bother to name the company here, because it doesn’t need any additional free publicity, but its website is full of scary statements about how P2P software is threatening national security.

Filed Under: congress, file sharing, national security, p2p, wesley clark
Companies: tiversa

Psst, Universal Music, The World Is Global Now

Culture

from the learn-to-adapt dept

Is Universal Music really that out of touch with how the world works? It’s attacking online video sites that promote its music. It’s testing DRM-free music in a way that’s likely to fail and apparently wants to claim ownership of CDs it gave away. The company is also trying to push makers of music playing devices to pay Universal a cut for no good reason. The latest may be the best yet, however. Not realizing what a global world we have these days and the easy ability for products in one market to be shipped to another, Universal Music released a CD in Europe only, with a plan to release a US version months later. Yes, this was pretty common for years — but it’s ridiculous to do that these days, because people in the US will still hear about the CD and order it as an import. Now, here’s where Universal Music gets even more ridiculous: it’s threatening the stores that are selling the import. Again, it seems to think it owns something that it really does not own. And, as the link here points out, all this really does is push customers who actually want to buy the CD to go online and download the music from a file sharing site. That takes a special level of incompetence. First, you make a really bad business decision that doesn’t reflect the reality of the market, and then to cover it up, you threaten legal action and drive willing customers away to other sources. Nice work.

Filed Under: global, music, p2p
Companies: universal music

Politicians Blame P2P Software For Not Stopping Gov't Employee Stupidity

Legal Issues

from the no,-seriously dept

Would you elect as your Congressional representative someone who blamed automakers because a bad driver crashed a car through his or her own negligence? Would you elect as your Congressional representative someone who claimed that email was a threat to national security because it can (and has) been used by spies to transmit confidential data? Probably not. Why? Because that’s clearly misplaced blame. However, it appears that we have elected Congressional representatives who have made an almost identical argument and stick by it when it’s pointed out how ridiculous it is. A bunch of our representatives are pushing for laws against file sharing networks claiming that file sharing is a national security threat. Why? Because some idiot government employees, against gov’t regulations and policy, installed file sharing networks on their computers and then screwed up the installation to make confidential files available via P2P. Yes. Because government employees are stupid and disobeying rules, file sharing system providers must be punished. This is based on an equally poorly argued USPTO report from a few months ago that incorrectly blamed P2P networks for gov’t employees stupidity.

In the meantime, while this magical law is being written, (and we can’t wait to see the law that will somehow punish P2P software providers in a way that prevents gov’t employee stupidity), many Congresscritters teamed up to scold the head of file sharing software firm Limewire. Rep. Jim Cooper accused Limewire’s CEO of being naive (amusing, since Cooper doesn’t appear to understand what he’s talking about) and claiming that Limewire provided the “skeleton keys” to accessing material that harms national security. If that’s true, then it’s equally true that any internet provider is providing similar skeleton keys. And any search engine. Plus any computer maker. Or any telephone maker or service provider. They’re all about as equally guilty as any P2P provider. Yet why isn’t Cooper harassing any of their executives? Cooper goes on to demonstrate his complete ignorance of what’s going on by saying: “you seem to lack imagination about how your product can be deliberately misused by evildoers against this country.” That’s laughably wrong. The misuse isn’t by so-called “evildoers.” It’s by gov’t employees who are disobeying policy and stupidly revealing confidential documents by misusing the software. Rep. Darrell Issa then warned Limewire that it may find itself legally liable if someone were stupid enough to share their tax returns via Limewire. Does this mean if I were so stupid to post my tax returns to Blogspot that I could sue Google? Technically, that’s no different than Issa’s argument. This is yet another case where politicians want to regulate a technology they don’t understand.

Filed Under: congress, file sharing, national security, p2p

Law Would Tell Universities To Do The RIAA's Bidding, Or Lose Funding

Legal Issues

from the not-your-place dept

The RIAA has consistently complained that there should be laws forcing colleges and universities to stop students sharing unauthorized music on their computer networks, and its extensive lobbying efforts have seen legislators in the past to “drop the hammer” on schools that don’t comply to the RIAA’s wishes. That hammer came a step closer to being dropped, as reader Blake writes in to let us know: an amendment to the Higher Education Reauthorization Act, which funds colleges and universities and the students who attend them, was introduced this week, and it would cut funding from schools that didn’t install technology to try and block P2P file-sharing on their networks. It looks like the amendment got yanked following university complaints, but its introduction highlights the ridiculous amount of clout the RIAA carries in Washington (an amount it seeks to further increase). The RIAA’s attempts to abuse the legal system roll on, and now it’s attempting to pervert the legislative process and American higher education as well. It isn’t the job of colleges and universities to do the RIAA’s dirty work, and the government shouldn’t be forcing them to do it, either.

Filed Under: congress, p2p, piracy, politics
Companies: riaa

Record Label Begs Fans To Put Latest Tracks On Pirate Bay To Help Bandwidth Load

Culture

from the well-how-about-that dept

Paul Talbot writes "The independent record label Labrador Records has been giving away a 68 track free MP3 sampler to promote their summer material. However, they couldn’t cope with the demand. Rather than withdraw the downloads, they’ve chosen to use a mirror service and are actually asking people to put the content on thepiratebay.org." Yes, there are certainly more independent labels who are learning to embrace file sharing as a great promotional tool, but it’s nice to see one clearly finding value in using The Pirate Bay and asking more people to help out. It would certainly go against the RIAA’s claims that The Pirate Bay and similar services have no legitimate reason for being in business.

Filed Under: copyright, music, p2p, pirate bay, riaa
Companies: labrador records, pirate bay

Record Label Sells Sponsorship Of P2P Downloads

Bleeding Edge

from the change? dept

Nathan Wilhoft was the first of several people to submit the story about Sprint “sponsoring” the P2P download of 16 million copies of a song by the artist Plies. Sprint is paying a “substantial six-figure” sum to embed its logo in the song (apparently as the cover art), so that when users play the downloaded track on their computer or MP3 player, it will be displayed. It’s an interesting tactic, both in terms of an advertising strategy, but also on the part of the artist and record label. While the label is still focused on selling the music, this is another small step in investigating some alternative business models. What’s slightly odd, though, is that MediaDefender is in on the deal. It sounds like it’s the middleman here, hooking up the record label with advertisers, then also uploading the tracks onto the P2P networks. MediaDefender is best known for uploading spoof tracks to P2P networks on behalf of labels to thwart file-sharers — so perhaps they do know a thing or two about uploading. But that company’s involvement could also be taken as another sign that things are starting to change, and that the music industry realizes it needs to evolve to survive. But before getting too carried away, plenty of questions remain. Perhaps the biggest has to do with that 16 million downloads figure — after all, once a track’s onto P2P networks, how will the label control how many times its downloaded? Will users be allowed to actually upload and share the track on their own, with no fear of retribution from the label?

Filed Under: p2p, sponsorship
Companies: sprint