Picture the scene: the entertainment industry is engaged in a pitched battle with its consumers, who are using a new technology to make copies of the industry’s products.

Entertainment companies, seeing the new technology as a threat, are targeting consumers and technology businesses, first with publicity campaigns, then with legal action.

That scenario might sound familiar, but it was first enacted more than 20 years ago when the British Phonographic Industry (BPI), a trade association for large record labels, came out with the now-famous slogan, “Home taping is killing music”.

A similar battle arrived some six years ago with the rise of Napster, the first popular file-sharing computer program.

This – along with the almost simultaneous rise of the mp3 compression format – allowed PC users to first save their CDs to a computer and then share all the music over the internet, from where it could be freely downloaded by anyone else.

This presented the same problem for the recording industry as home taping. The difference was one of scale, however.

Napster allowed perfect copies to be made, without the background hiss of tapes, and without the degradation in quality that accompanies each successive copy of a tape.

The program also opened up file sharing to the whole world.

Napster was duly shut down by the US courts, but not before a chorus of imitators had popped up.

These were often riddled with viruses or spyware, or didn’t offer much in the way of shared music, but they were eagerly lapped up by the public all over the world.

The legal action continues today, as the industry on both sides of the Atlantic sues both the companies making file-sharing software and the users who share the music.

These programs are often referred to as peer-to-peer (P2P) software because usually they connect one computer to another to share files directly.

This doesn’t mean that P2P software is inherently illegal, though. Instant messaging tools such as MSN Instant Messenger, for example, use the same technology.

It’s worth noting that file sharing in itself is not illegal. If you share copies of photographs or music that you have created and willingly share with others, for example, there are no legal implications.

However, the majority of files being downloaded from most file-sharing services are not done legally.

It’s fair to say that file sharing represents a significant threat to the music industry and – with the advent of large hard disks and good video compression formats – to the film and television industries as well.

However, the industry has been accused of fiddling the figures to make the problem look worse than it is.

The organisation representing US record labels is the Recording Industry Association of America (RIAA), which puts out most of the figures on how file sharing affects sales of music.

Unsurprisingly, the RIAA’s statistics show that revenue is severely affected by P2P. Many people have claimed the figures are misleading and that other factors are to blame.