Rapidshare - Piracy 2.0

Just at the time when the media industry began fighting back and
covered cyberpirates with lawsuits a new business model appeared at the stage.

Rapidshare, after a rocky start grows really rapid with sales surpassing 5 Million $ a month (own claims) the websites is one of the most popular sites on the whole net.

But where does this interest in filehosting services come from?
Why are so many people exchanging so much that the company needs 3.5 Petabyte capacity?

The answer is that the majority of rapidshares customers could be in fact cyberpirates that are changing their way to share their files.
Current lawsuits concentrate on a very specific group of softwarepirates using tools like EMule or BitTorrent.
These tools enable them to share media files on their computers with others.
In fact if one trys to download a movie of 700MB you could end up being "supplied" by 30 other users around the world.

For the user of these tools this practice grew increasingly dangerous. The music industry targeted large group of users that shared especially many files - suing them in fact not for downloading illegal material but for sharing it with others.

Although the sucess of such measures remains to be at least marginal considering the still massive international traffic it seems that the shock and awe policy has created a opportunity for Rapidshare.

For the pirates it is almost safe to download from Rapidshare since the effort to nail somebody down would be immense. Additionally it is very convenient since the download speed exceeds everything ever seen so far.

Acknowleding this new instrument the media industry is shifting their efforts towards attacking the content providers, the "release groups".
If these efforts bear any fruits seems to be doubtful.

In contrast, the trend that started in about 1999 and is continouing to this day is that media content transforms into a common good.

Conclusions:

- Likelihood of success of the media industry in fighting global piracy: 0-5%

The FED cuts

A interesting observation regarding the rate cut earlier this month:
Ben Bernanke himself made a clear statement that he will take immediate action once it becomes clear that output growth is threatened.

Bearing this in mind it definitely could be a sign of a weaker US economy ahead. Given the magnitude of the numbers involved the often citated "wealth effect" is likely to be the dominant factor behind US citizens cutting their consumption expenditures in the coming months.

Of course it is very interesting how fast this will happen. The stock market right now shows no signs of an imminent recession - being close to all time highs.
But to put it into a nutshell I strongly believe that the stock prices with P/E ratios that are based on historical record margins and an almost 17 years ongoing economical boom (with one small interruption) are not reflecting the true state of the US economy.

A rate cut will not change the underlying trends and problems that threaten to hamper future growth. And it certainly will not solve problems like weak peronal balance sheets that seem to become a mass phenomena.

Conclusions:

- Odds of a US recession in 2007/Q1 2008: 60%
- Odds of a US recession in 2008: 75-80%
- Another round of rate cuts: 90-99%

First post....

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Ideas and comments are of course always welcome.