Another look at the dilemma exemplified by Kazaa - licensed vs. unlicensed downloading, copyright holder's willingness to license - coming to the now almost universal conclusion (excluding most corporate copyright holders, of course) that the key to the digital entertainment future is for record labels (and to a lesser extent, movie studios) to provide high quality, secure, convenient access to all recorded material for a reasonable price - maybe a dime a song, with copy restrictions (DRM) making the downloads LESS valuable.

Two Guy Trio's singer, Evan Gamble, doesn't mind that bootleg copies of his band's "Shelby Sugarcane" are spreading on the Internet through the Kazaa file-sharing system.

A half-million fans have downloaded legal copies of the song through Kazaa, the Internet's leading bazaar. Illicit trading by a few million others is a minor nuisance.

More important is Kazaa's ability to let an emerging pop-rock band like his find an audience.

"Whether it's licensed or unlicensed, it's a fan," said Gamble, 21, a junior at the University of Texas. "We want people to hear the music, so they'll buy the album, so they will come to the show and request songs on the radio."

....Search for songs on Kazaa and you get the authorized files on Altnet marked with an orange icon, alongside the regular shares in blue. After downloading an Altnet item, another click gets a license and informs of payments due.

Altnet even developed a micro-payment system so you can enter a credit card number once and combine charges from future buys.

In the case of Two Guy Trio, a music video costs just 10 cents and songs are free for 90 days, after which fans are encouraged to buy the album. Without a license, the song or video won't play.

....The entertainment companies have set up their own subscription services like Movielink for movies, pressplay and MusicNet for music.

Although consumers have frowned on their limited selections and usage restrictions, those ventures blame file-sharing for the tepid response.

"They are illegal, illegitimate and free," said Michael Bebel, chief executive of pressplay. "It's making it difficult to convince people that they should even take the first step" of accepting a three-day free tryout.

Similar to prohibition?
But digital media analyst Phil Leigh at Raymond James & Associates sees an analogy with the end of prohibition, when drinkers returned to liquor stores and shunned bootleg booze.

"They knew they were getting merchandise of quality, they didn't have to worry and their conscience wouldn't have been bothered," he said. "You'll find the same things with online music."

Altnet, which charges artists to post their files, sells 500,000 licenses daily. For Sharman, which gets a cut, legal sharing offers its biggest revenue potential. The company won't reveal revenue figures.

Ultimately, Kazaa's future depends on whether U.S. courts accept its argument — demonstrated by Altnet — that it has significant legal uses, just like videocassette recorders and photocopiers. [AP]