Digital Business Models for Peer-to-Peer Networks: Analysis and Economic Issues

Peer-to-peer (P2P) services allow users to share networked resources, notably bandwidth and content, from the edges of the network. These services have been popularized because of file sharing — particularly the sharing of unlicensed copyrighted files. Concerns about such P2P file sharing were highlighted by content owners’ recent lawsuits against individual users and P2P network operators. However, content owners are increasingly exploring the ability of peer-to-peer networks to accommodate legitimate content distribution and promotion. In this article we review the economic characteristics of P2P networks and outline the implications of these characteristics on efforts to counteract illegal piracy and on potential uses of P2P networks in a commercial media distribution strategy.