Market research company Multimedia Intelligence is estimating that ISPs are spending almost five billion dollars per year as a result of their users' file sharing habits. US ISPs spent almost 700 million dollars in operating expenses on P2P this year alone, according to the recently published study "P2P Networking: Content’s "Bad Boy" Becomes Tomorrow’s Distribution Channel".

US ISPs also spent around 4.1 billion dollars in "capital expenditures" in 2007 because of P2P, which is Wallstreet's way of saying that Comcast & Co. upgraded their networks to keep up with increased demand. A press release that found its way into my inbox just a few minutes ago quotes Multimedia Intelligence analyst Rick Sizemore with the following words:

"Since the majority of P2P traffic is unlicensed content, our research demonstrates that piracy costs are not only impacting content owners, but broadband providers as well."


As always, I'd advise to take these numbers with a grain of salt. First of all, the nature of capital expenditures is that they tend to pay off later on, meaning this is not actually money lost, but money that will for example lead to more people signing up for higher-speed broadband in the years to come.

Even more important is to remember that P2P is simply a technology that is used to satisfy a demand - in this case for digital entertainment. This demand would not simply go away if P2P didn't exist. Users would just find different ways to satisfy it - as they are increasingly doing with Flash video streams and one-click hosters.

Multimedia Intelligence previously estimated that the music traded on file sharing networks in 2007 was worth 69 billion dollars.

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