What do you call an industry where the user base increases by over 50% per year? H-O-T. (Figure on left from Big Champagne).

Open legal issues have frozen the capital industry's participation in consumer P2P networks for several years. The last big deals were Hummer Winblad investing $15 million in Napster (May 2000) and Timberline Venture Partners' (an affiliate of Draper Fisher Jurvetson) continuing support of Streamcast.

While the recent Supreme Court P2P decision kept the legal door open for consumer P2P developers that may actively induce in copyright infringement, it essentially closed it for all other P2P applications, and certainly for efforts focused on legal content.

This is significant because up to this point only companies involved with closed P2P networks were safely out of the legal spotlight.

Now the entire ecology of companies involved with open P2P networks is cleared and are potential investment targets. These companies include network operators, client software developers, customer development houses, marketers, advertisers, ecommerce and other software platform providers, and progressive content publishers and distributors that can capitalize on this new channel. Add the new applications and services that will flourish.

The P2P industry will finally start to mature after stagnating for several years in a cesspool of litigation. Investment dollars will return. Including those of Hollywood.

Marc Freedman

RazorPop, developer of TrustyFiles, the leading multiple network P2P file sharing software

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