On Campus, Legal Music Services

In an effort to curb rampant piracy among college students, the University of California and California State University systems on Monday announced a deal to offer legal music and movie download services to 600,000 students.

The agreement with Englewood, Colo.-based Cdigix Inc. is the largest since campuses across the country began searching two years ago for alternatives to the illegal peer-to-peer downloading that clogged their computer networks and put students in legal jeopardy.

Cdigix’s contract gives administrators at all 13 UC and 23 Cal State campuses the option of offering online music and movie services to students.

Both UC and Cal State also are negotiating with other providers -- such as Napster Inc., Sony Corp. and Mindawn -- in the hope of giving campuses a choice of services.

Individual campuses will decide whether to subsidize the services through student fees, as is done at some schools.

“We’re doing this because we do recognize that there is illegal file sharing of intellectual property,” said David Walker, director of advanced technology at the University of California, which represents 200,000 students.

“We felt we should do something to encourage legal services.”

More than 50 U.S. colleges and universities -- including Pennsylvania State University and University of North Carolina -- already have struck deals to offer legal music services to their students, according to the Recording Industry Assn. of America, the trade group for the major record companies.

Fast campus networks make universities hotbeds for illegal file sharing, said Eric Garland, chief executive of Los Angeles market research firm Big Champagne.

Measuring the extent of illegal downloading is difficult because students don’t want to admit to doing something illegal and because universities don’t spy on their students’ online behavior, Garland said.

But that hasn’t immunized schools from legal problems.

In 2000, rock band Metallica sued Yale University, the University of Southern California and Indiana University for failing to block the original Napster file-sharing service.

The band dropped its suit after the universities agreed to limit access to Napster on campus.

Napster has since been reborn under new corporate ownership as a legal music subscription service.

Lawsuits against schools are rare, because, as Internet service providers, they are generally protected against liability for their students’ actions online. Even so, schools must contend with thousands of copyright infringement notices from record labels and movie studios requesting that illegal copies of songs or films be taken off their computer networks.

Last year, for instance, each UC campus received 80 to 400 such notices.

Offering legal alternatives to file sharing is “a way for universities to try to get around this problem that they’ve inherited. They can point to these services and say they’re making an effort to make legitimate services available to their students,” said Mike McGuire, an analyst with Gartner Group Inc. “The challenge for them now is to make these legal alternatives compelling to students.”

Cal State’s campuses and UC’s campuses will now decide on their own whether to offer Cdigix services, and if so, whether to subsidize the company’s $3 monthly fee for the music service or the $5.99 monthly video programming fee.

Cdigix’s fees are well below the $10 a month charged by many music subscription services.

Cdigix co-founder and President Brett Goldberg said campus services were cheaper because record labels cut their fees as a way to wean students away from illegal file sharing.

“In the college market,” he said, “there’s an adjusted cost structure that has to do with the strategic relevance [to record labels] of the target audience.”