In addition to the strained relations caused by Telstra joining peer-to-peer company Sharman Networks in opposing the Anton Pillar orders that allowed representatives of the music industry to search for and seize evidence relating to alleged copyright infringement last week, the record labels are also believed to be displeased over Telstra's decision to advertise its recently launched music download site on the Kazaa site.
"The music industry isn't pleased because they saw the ad that Telstra had on the Kazaa site," music industry analyst Phil Tripp told ZDNet Australia . "It's not exactly a good thing for a telco that's trying to legitimately deliver songs to consumers to be advertising at the house of the devil, so to speak."
"The record companies already are struggling with how to put their music across the Internet to consumers, or by other means [such as direct downloads by cable TV or satellite], and the problem is that people like Telstra want to use music to sell broadband," said Tripp. "Apple wants to use music to sell iPods. There's nobody really in the game that just wants to sell music for music's sake. They all have other agendas, even Destra. They have mp3.com.au, they have hosting services, they have music point services."
The record companies are dubious of companies that are only selling music to promote another product or service, according to Tripp. Michael Speck, managing director of Music Industry Piracy Investigations, was also wary of Telstra's motives in the music sector.
"It will be hard for Telstra to reconcile the conflict between its apparent support for its online music model and its apparent enthusiasm for file-sharing technologies like Kazaa," Speck told ZDNet Australia .
Tripp claimed that Telstra did not view Kazaa as a competitor to its online music business. "[It's] not a major competitor, it's a major reason for people sucking up download time on Telstra broadband," said Tripp. "It's the gas station that feeds the car."
"The only reason that telcos want to be in the music business is that they want to make sure the big, fat download pipe they've put together is used, and where they're charging consumers a large amount of money for every extra megabyte, of course they want to have consumers downloading video and audio," said Tripp. "They want to get people in the addictive habit of getting their music instantly."