How label-backed P2P was born

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attacking critics of Lack with all the overwrought rhetoric he typically reserved for record industry leaders.

They agreed that they would look for ways to work together, but initially found little practical room. Rosso left Grokster for Optisoft soon after. But it wasn't until a separate group of technologists began bringing swap-stopping technology to the labels' attention that their relationship started to show sparks.

Building the swap walls, brick by brick
The first company to try building a peer-to-peer network that filtered out record company's copyright products was the original Napster, under the strict orders of the federal courts. It didn't work well, and the company ultimately shut down its service. Its name and assets were sold to software company Roxio, which now uses the Napster name for its online music service.

But Napster founder Fanning learned from the experience. The day after the company declared bankruptcy, he and several of the original Napster figures began brainstorming. The result was Snocap, a new company aimed at providing a full infrastructure to turn unauthorized downloads on peer-to-peer networks into sales.

"(Napster founder Shawn Fanning) is, I think, the ultimate conversion. He has seen the way forward, and in that sense we are all grateful to him."

--Thomas Hesse, president, Sony BMG's Global Digital Business

In early 2003, they began meeting with the same top record executives who, barely months before, celebrated putting Napster out of business.

"I remember how Shawn came in, how he had obviously been converted to the legitimate version of the world," said Thomas Hesse, Sony BMG's president of Global Digital Business, who at that time was chief strategic officer at BMG Music. "He is, I think, the ultimate conversion. He has seen the way forward, and in that sense we are all grateful to him."

But through 2003, there was little Snocap technology to see, only plans and a rudimentary demonstration. BMG and other major labels signed what amounted to an endorsement of Fanning's idea to help him find funding, saying they would be interested in exploring his work but making no commitment to using it.

Fanning wasn't the only one thinking along these lines.

Another company called Audible Magic was already marketing audio "fingerprinting" technology that could identify songs as they were sent through ISP networks or were burned to disc in a manufacturing plant. In late 2003, founder Vance Ikezoye gave RIAA executives a demonstration of how this could be plugged into a piece of file-swapping software, stopping downloads in their tracks.

RIAA executives quickly set up meetings for Ikezoye on Capitol Hill to show Congress that peer-to-peer software could be modified to protect their copyrights. Other record label executives, including Lack, got their own demonstrations, and by March 2004 he was impressed enough that he could tell Rosso that he'd seen filtering technology work as advertised.

Ikezoye's technology led to one immediate contract with iMesh, a company that would ultimately be Mashboxx's most immediate rival.

The RIAA had sued the Israel-based iMesh file-swapping company in September 2003, and executives at that company quickly decided that a settlement was better than fighting an expensive lawsuit.

By late the following spring, iMesh executives were meeting in Sony's headquarters with lawyers and businesspeople from all the major labels, as well as Audible Magic. iMesh President Talmon Marco remembers the meetings were supposed to be under a veil of absolute secrecy, even within the labels themselves--or so he thought until stepping out of the elevator in Sony's headquarters one day to see huge hand-drawn signs announcing "iMesh settlement talks," with an arrow pointing them in the right direction.

iMesh announced that it had settled with the RIAA in July 2004. It wasn't public knowledge for at least another eight months that Audible Magic was trying to turn iMesh's unregulated swapping network into the kind of filtered download service that Lack and Rosso were also discussing.

Preaching the gospel of filters
When Rosso left Lack's office after that 2004 meeting, he still had no plans to launch his own company. The better way, both agreed, would be to persuade existing peer-to-peer companies to adopt filters.

Trouble was, most of the well-known file-swapping companies were adamantly and publicly opposed to filters, questioning whether they were even possible to use. Rosso himself had publicly dismissed the idea in the past, and the P2P United lobbying group that he belonged to had contested Audible Magic's claims on Capitol Hill.

But Rosso, like Fanning a new convert, started lobbying on behalf

[Matt Vog]

So much hype

Does Cnet have any monetary connection to Mashboxx, iMesh or Snocap? They get a heck of a lot of coverage for companies that have yet to show the world anything.
Other companies like Wurld Media's Peer Impact are live and delivering on the legal p2p promise, now. Have you ever done a story on how a tiny company in upstate NY was able to get licenses from all 4 majors and launch to the public well before any of the companies you continue to cover on an almost daily basis?

[Dream Weaver]

How a Con Artisit was Born

Wayne Rosso is a self promoter with no technology and one label SONY/BMG. Andy Lack not the sharpest tool in the shed. Who cares? Rosso was never the founder of anything. They have Borland SNOCapped. Get with it there are real P2P technologies to report on way ahead of these guys.

[PIUser]

Re: Hype

It does seem like a lot of hype! As was already mentioned, they have ONE record label signed. Where are the other 3 majors? Where are the indies? I signed up for the beta quite a while ago and have heard nothing about it.

And as Matt mentioned, where is the story about Peer Impact? Is it because the CEO of the company was never involved in the "illegal" side of file sharing to begin with? So because Mr. Rosso here is affiliated with the bad side of things, he gets more press when he "joins the light side"? Sounds strange to me. Peer Impact has been in beta for months already, and came out of beta at the beginning of August.

And yet there's no 3 page article about that. Just a 3 page article about the company who claims to be the first to sign a major label (by the time that press release went out, Peer Impact had all 4 majors and some indies). And a 3 page article about the man who called Peer Impact "P2P for pu**ies". That's a lot of marketing speak with very little to back it up, but somehow that warrants a story here....

Another Media Outlet Fooled

Just another story by just another news outlet that just doesn't get it. People use P2P's because they're free. The What's In It For Me Factor isn't even addressed here. Until someone comes out with an incentivized way that is legal for sharing music on the web, companies like SnoCap and Mashboxxx will be nothing more than pipe dreams. This isn't the 1990's. Prospective investors need more than a good song and dance routine to make an investment.

Shame on CNet for not covering all the legal P2P's that are out there, like Peer Impact and Weed Share amongst others.

[CNerd2025]

Legal P2P?!

Although I disagree with the user who says that P2P thrives only because people are greedy, I would not be in favor of this Sony BMG Mashboxx or whatever it is. The industry (at present) is the enemy. Will Sony offer its artists better contracts? Will Sony allow the artists to have creative control over their music? I can almost assure you that the answers to both of those is still 'no'. I think that if someone could come up with a system like Weed Share without DRM, it would be completely viable. But the RIAA/Big Four would never buy that. RIAA runs the show, it's a complete cartel. I am in favor of giving money to the people who actually did work, including engineers, mixers, and other technical people, as well as the artists themselves, and even the record producers (some people can just identify talent). Lately I have really researched this topic and found some indie rock bands that I really like, because they have albums with songs that are *all* worth listening to, not just fillers, and they author many albums that fit this description. Imagine that! Creativity! I think also that some people are simply good at doing things like remixes, and the way the industry has lobbied the government, intellectual propterty is treated as a sacred commidity, as if only a certain amount is allowed to go around. That's the wonderful thing about IP, it's supposed to be infinite! I'll end with a quote from US Supreme Court Justice Sandra Day O'Connor:

"The primary objective of copyright is not to reward the labor of authors, but [t]o promote the Progress of Science and useful Arts." "To this end, copyright assures authors the right to their original expression, but encourages others to build freely upon the ideas and information conveyed by a work. This result is neither unfair nor unfortunate. It is the means by which copyright advances the progress of science and art."

One final thing. This article purported that The US Supreme Court found networks like Grokster possibly liable for copyright damages. That is not the truth. The high Court determined that these networks are able to be sued by the industry, but that they can still use the defense they've always used, which is that they have *no* control, due to the P2P nature, and the fact that there are many legal ways to use it (Sony vs. Universal: Betamax).

[R. U. Sirius]

Crockster

This Russo guy should have named this vaporware "Crockster".

Good one liner

"Crockster" dang I luv it!

[PCCRomeo]

It doesn't matter....

People only use P2P because it is FREE. I hate P2P, but it's free. I personally prefer downloading from the music stores because it downloads A LOT quicker.

[Mendz]

P2P makes a lot of sense...

... but laws the controls gave P2P a negative image enough for many people to downplay the importance of P2P to the future of the Internet.

P2P is the ultimate communication and data exchange possibility using the web protocol. Yes, it needs to be controlled. And, yes, it needs to obey the laws. But P2P must never die.