November 16, 2004 4:00 AM PST

Music rebels seek to tame P2P

After years of bitter battles between copyright holders and file-swapping services, the outlines of a partial truce are emerging that may soon see major record labels partner with peer-to-peer networks to create legal online music stores.

At the center of the detente is Napster creator Shawn Fanning, whose new company, Snocap, has spent the last year building technology designed to identify music on file-swapping networks and turn free song trades into purchases. The company plans to emerge from stealth mode by the end of the year and has already secured licenses to the song catalog of the Universal Music Group.

Fanning's technology is designed to work behind the scenes of other companies' services, rather than directly replacing either file-swapping networks like Kazaa or today's download stores such as Apple Computer's iTunes Music Store. But several companies are already planning to use the technology, which could allow peer-to-peer networks to become online stores that sell music legally, much like iTunes.

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What's new:
Former music rebels, including Napster's Shawn Fanning, are poised to unveil new technology designed to identify music on file-swapping networks and turn free song trades into purchases.

Bottom line:
After years of bitter battles between copyright holders and file-swapping services, a partial truce is emerging that may soon see major record labels partner with peer-to-peer networks to create legal online music stores.

More stories on music swapping

In order to get there, though, peer-to-peer companies would have to agree to keep unauthorized music out--something large networks that support millions of users might be loathe to do.

"There's nothing we'd like better than to see peer-to-peer (services) selling our music," said one top label executive, who spoke on condition of anonymity. "They just can't be allowing people to steal it at the same time."

Three years after the courts forced Napster to close its doors at the peak of its popularity, the company's founder is poised to rejoin the online music revolution on the side of the record labels.

Fanning's apparent conversion offers more than a hint of historical irony. As a young renegade, he was ordered by courts in 2000 to begin blocking trades of copyrighted songs on the original Napster service, which ultimately shut down a year later, after the company's filters proved unwieldy.

The Snocap system, which identifies songs in order to extract payment, carries at least the mark of that original court order--and might arguably be seen as its fruition.

Fanning's technology is just one element in a series of pieces that are rapidly falling into place to allow new kinds of peer-to-peer music distribution. Another change, possibly more significant, has come in the form of growing flexibility on the part of record label executives, who increasingly see how using peer-to-peer technology as a legitimate distribution system could offset its use for piracy.

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