December 03, 2004

Music Peer to Peer

Napster Creator Unveils Online Music Technology

By Sue Zeidler

LOS ANGELES (Reuters) - Shawn Fanning, once reviled by record labels as the creator of renegade song-swap service Napster (news - web sites), on Thursday launched a new service designed to turn the threat of still popular peer-to-peer services into an opportunity for music companies and artists.

The original Napster was eventually shut down in 2001 by copyright litigation and then sold to Roxio Inc, which re-launched it as a paid online service.

But despite the proliferation of commercial services like the new Napster, RealNetworks Inc's Rhapsody and even Apple Computer Inc's iTunes, Fanning said unauthorized file-sharing was as rampant as ever.

In launching the new platform, Snocap, Fanning and co-founders Jordan Mendelson and Ron Conway, said the company, also named Snocap, reached a deal for Vivendi Universal SA's Universal Music Group to license its catalog.

After registering music and copyright information in Snocap's database, labels and artists can manage online distribution through Snocap's copyright management system, which lets them set rules for each track on a global basis.

Fanning said Snocap, which received $10 million in funding, will expand the digital music market by giving authorized services the broad selection that makes peer-to-peer services popular.

By using audio fingerprinting technology to identify and track music, Snocap will give consumers authorized options on par with file-sharing services. By removing the threat of litigation, consumers will also be get better quality service and avoid things like the risk of litigation from the industry or downloading a computer virus, spoofed downloads or unwanted advertising, Fanning said.

Snocap, which provides back-end services, said said it was talking with various peer-to-peer services, online retailers and music labels.

Sharman Networks, the distributor of Kazaa, declined comment, while Michael Weiss (news - web sites), chief executive officer of Streamcast, distributor of Morpheus, said he was concerned the technology was not easily adaptable to Morpheus, a decentralized peer-to-peer software.

"My fear is that Snocap is coming up with solutions that are four years old. As far as we're concerned, we want to push the technology envelope," said Weiss.

A spokeswoman for Snocap said Weiss' fears were unfounded and that the application would without a doubt work on either a centralized or decentralized peer-to-peer architecture.

Fanning said Snocap was working with MashBoxx, a new peer-to-peer service expected to launch early next year. Industry sources said Sony BMG Music Entertainment was looking into using Snocap to populate MashBoxx.

After years of blaming peer-to-peer services for billions of dollars in lost sales, all the labels are now looking at various ways to legitimize these services.

EMI Group Plc (news - web sites) confirmed it had held talks with Snocap, while Warner Music Group was not immediately available. Sony BMG Music Entertainment declined comment.

In another example of the industry's new willingness to embrace peer-to-peer technology, Wurld Media Inc. last month licensed content from Universal, Sony BMG Music and Warner Music for a new service to be called Peer Impact.

Posted by Craig at December 3, 2004 02:38 PM