Fans of Croatian jazz, Polish hip-hop and other nonmainstream music from Central and Eastern Europe will soon be able to download songs from their favorite artists for a small fee through a Web site operated in Prague.

Tamizdat, a Prague- and New York City-based distributor of independent music labels from the former Eastern bloc, plans this month to enlarge its online CD store by selling downloads of some songs based on the model made popular by Apple's iTunes.

Like other music distributors, Tamizdat faces the thorny legal issue of consumers downloading and copying audio and video content from the Internet. This phenomenon is changing how the music industry works and is forcing media companies to reconsider the way they do business.

"This is changing business models radically because there is clearly a trend," said Matthew Gertner, chief technology officer at AllPeers, a company based in Prague and London that is developing software for sharing files in peer-to-peer networks. "It is going to be huge over the next 20 years."

"We plan to start selling MP3 downloads through iTunes and our Web site," said Marek Čulen, Tamizdat's Prague office director. "It looks like it will be a worldwide trend."

Tamizdat started in 1995 as an endeavor with a mission to promote independent bands from Eastern and Central Europe among West European and North American listeners.

The company opened its Prague office in 2000. Tamizdat managed to survive the burst of the dot-com bubble later that year and has steadily increased sales by targeting an elite group of customers.

Now, however, it's facing a new challenge plaguing any media company distributing audio or video production: uncontrolled and almost unregulated downloading and copying of content via the Internet.

"There is so much free music on the Internet that less people want to buy music," Čulen said.

Undefined rules

Rapidly developing technology that enables consumers to have easier access and wider possibilities for accessing video and audio content is creating controversy over what rights consumers have versus the rights of artists and media companies.

While media companies are campaigning for a strict ban on downloading and uploading free content, consumer organizations call for more flexible laws that would give consumers more rights over purchased content.

"It is necessary to find a good balance so that authors are rewarded for their work and consumers can use these resources without extreme restrictions," said Karel Pavlík, a member of the Consumer Protection Union, a Czech organization that recently joined a European Union campaign for protecting consumers' digital rights.

The campaign now includes 3,900 consumers in the EU, according to Pavlík. He said that in many cases, consumers who download music from the Internet don't have enough information about what rights and obligations they and the artists have. They are often restricted in their rights, for example, when they can only play music on a particular type of player, Pavlík added. Certain MP3 players only work with certain programs, for example, Apple's iTunes and the iPod.

Peer-to-peer networks

According to Czech law, it is legal to make one copy of anything that holds a legal copyright — a book, a song, artwork — for personal use, said Petra Zíkovská, director of the Czech division of the International Federation of Phonographic Industry.

The major headache for the music industry, however, comes from peer-to-peer networks that enable files to be shared more easily.

Zíkovská said that according to the law, uploading music on the Internet and making it accessible to the public requires an author's permission.

"This is a [violation] of the law that happens on the Internet quite often," she said. The organization, however, is facing major difficulties in identifying offenders due to the anonymity of the Internet, which makes it problematic to enforce regulations.

"Anonymity is a huge problem. I am a bit skeptical about law enforcement in the Internet environment," Zíkovská said.

Gertner says that if media companies are not willing to rethink their business models or their approach to digital rights they are facing the danger of being made redundant in the long term. Artists may eventually start realizing that it is more profitable for them to sell their productions directly to consumers without going through media companies, he said.

Not going away

Tamizdat is still figuring out the exact model for its music-download program. But the company acknowledges the fact that peer-to-peer servers and music downloading are here to stay.

"This is something the music industry, for better or for worse, is going to get used to, just like they got used to people making cassettes," Tamizdat co-founder Matthew Covey wrote in an e-mail. As in his company's earlier days, Covey finds himself counting on the niche market Tamizdat is tapping into to help the company stay afloat.