Points traded for electronics, clothing, concert tickets

Altnet, which uses the controversial Kazaa file-sharing network to legally distribute music and other copyrighted material, will launch an incentive program designed to encourage much wider use of its system rather than illegal alternatives.

The Peer Points Manager program will keep track of what files a user uploads on Kazaa, rewarding users who let legal content be distributed using their computers and Internet connections.

Users will be rewarded points that can be traded in to buy some of that content or other prizes, such as consumer electronics, clothing and concert tickets, said Kevin Bermeister, CEO of Altnet and its parent company, Brilliant Digital Entertainment.

The points process gives Kazaa users reasons to switch to distributing only legal content, Bermeister said. And because the system uses a peer-to-peer network, it can be much cheaper than a music label or movie studio paying to store and transmit the same material from their own inhouse systems.

The approach is a novel one that could flip the economics of peer-to-peer systems in favor of the labels and studios that now regard them as a mortal threat to the bottom line. Kazaa is one of several file-sharing systems that have been sued by the RIAA and others over its use by pirates for rampant swapping of illegally copied songs.

“Altnet’s Peer Points Manager is a part of the digital content distribution solution which works to reward and educate users by providing them with incentives to share licensed content within a peer-to-peer environment,” said Bermeister.

If the Altnet approach takes hold, it also would provide some legal cover for Kazaa, whose defenders have argued that the network has substantial non-infringing uses, one of the protections from suits laid out in the Digital Millennium Copyright Act and subsequent court cases.

The Peer Points system has been in testing mode for most of the past year and has been used to distribute and sell not only music but also video content and adult material. It uses Microsoft’s digital-rights management software to protect files.

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