From: Randy Saaf

Sent: Wednesday, April 11, 2007 9:24 p.m.
To: [various MediaDefender employees]
Subject: Fw: .edu filtering

Team Universal is curiouse [sic] if we have any historical data over the last 3 months that show whether .edu IP addresses on p2p have gone down. They want to see if their lawsuits are getting students to stop using p2p (take a moment to laugh to yourself). Let me know if anyone has any ideas.

When Saaf co-founded MediaDefender in 2000, Napster was at the height of its popularity. The file-sharing service was wildly popular on college campuses, where students used speedy broadband lines to amass huge music collections. The Recording Industry Association of America, the music-business trade group, considered Napster to be its No. 1 problem. Saaf thought he had a way to contain it. He invited Cary Sherman, then an R.I.A.A. executive and now its president, to drop by the startup's cramped Claremont, California, offices. As soon as Sherman walked in, he heard a yet-to-be-released Madonna track blaring from a set of speakers. "He was shocked," says Ron Paxson, one of the company's co-founders. "We showed him how we could block it from getting out onto the internet."

Over the next few years, the firm grew as downloading flourished and terrified entertainment execs turned to it for help. The content-wants-to-be-free chant of the internet generation began reverberating in the nightmares of music moguls—and then of executives further and further up the entertainment industry food chain. As broadband speeds increased and data storage got cheaper, it became easier and faster for anyone with a passing interest in pop culture to trade larger files like TV shows, movies, and software.

The technology for trading them also kept improving. When the record industry shut down Napster in 2001, a drove of oddly named services took its place: Ares, eDonkey, Grokster, Kazaa. In 2002, a lone programmer working at a table in his dining room invented BitTorrent, a technology that made file sharing even faster and more efficient. Within a few years of its creation, BitTorrent activity accounted for nearly 20 percent of all internet traffic. Between 2002 and 2006, the file-trading audience nearly doubled, with an average of more than 9 million people sharing files at any given time, according to BigChampagne, a company that monitors P2P traffic. The firm estimates that more than 1 billion songs are traded each month, a number that has more or less remained constant as the trading of feature films and TV shows has exploded.

Yet it has been difficult to quantify the damage supposedly wreaked by downloading. In mid-2007, economists Felix Oberholzer-Gee, from Harvard, and Koleman Strumpf, from the University of Kansas, published the results of their study analyzing the effect of file sharing on retail music sales in the U.S. They found no correlation between the two. "While downloads occur on a vast scale," they wrote, "most users are likely individuals who in the absence of file sharing would not have bought the music they downloaded." Another study published around the same time, however, found there was, in fact, a positive impact on retail sales, at least in Canada: University of London researchers Birgitte Andersen and Marion Frenz reported that the more people downloaded songs from P2P networks, the more CDs they bought. "Roughly half of all P2P tracks were downloaded because individuals wanted to hear songs before buying them or because they wanted to avoid purchasing the whole bundle of songs on the associated CDs, and roughly one-quarter were downloaded because they were not available for purchase."

Still, the entertainment industry believes it knows a bad guy when it sees one and has reacted to file sharing exactly as a character in one of its thrillers or shoot-'em-up games would: with a full-frontal, guns-a-blazing assault. For the past few years, the R.I.A.A. has employed MediaDefender's competitor, MediaSentry, to trace people uploading music so that the trade group can sue them. The R.I.A.A. and the M.P.A.A. have worked to get government on their side: In 2007, the organizations lobbied to water down a California bill designed to crack down on pretexting—the practice of using false pretenses to get personal information about someone. The M.P.A.A. argued that laws against pretexting would cripple its antipiracy efforts by imperiling "certain long-employed techniques to obtain information." In November, the groups lobbied the House of Representatives in support of a bill to make federal funding for universities partially contingent on how effectively they rid their campuses of file sharing.