November 8, 2004 4:00 AM PST
Music sharing that's free and legal
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listen for free. In the future, Mercora may charge subscription fees for some services, said Sampath, who became a noted name in the tech industry years ago by founding the antivirus company McAfee.
What happens if listeners download broadcast music? Technically, if the legally broadcast song is for personal use only, the listener does not violate copyright law. "It's like a tape recorder," Sampath said.
If the downloader tries to sell a track or transfer it to another person, it's illegal. In future, improvements in digital rights management technology should begin to curb the ability of listeners to do this. Mercora also inserts technology into its client software to try to control the practice.
Apple has wrestled with the problem as well, issuing a series of upgrades to its iTunes software designed to disable free downloads such as MyTunes. These programs enable users to make copies of music streamed using iTunes' playlist-sharing feature.
Legal or not, Mercora's service most likely will draw the scrutiny of the music industry. The Recording Industry Association of America has already raised concerns about a PC radio receiver marketed by XM Satellite Radio, which enabled consumers to download broadcasted songs onto a computer when used with a third-party software application. XM subsequently pulled the device.
The RIAA has also fought, albeit often unsuccessfully, against peer-to-peer sites where people download songs. An RIAA representative had no comment on the Mercora service.
While the potential popularity of Mercora could dent music sales, Sampath predicts that won't be the case. Not all 10 million tracks on its network are likely to stream at the same time. The ephemeral nature of radio makes it difficult to be sure that a particular song will be playing the moment a listener wants to hear it.
For now, the best Mercora listeners can do is tap into a genre or particular artist on demand. Over time, a larger network and improved search tools should let people pinpoint musical demands.
The concept for the music service owes its heritage, in part, to the dreary state of corporate-owned radio, Sampath said. Salsa and reggae account for 21 percent of record sales, for example--but good luck finding them on the radio.
"You can listen to Clear Channel in Santa Cruz, and it's the same Clear Channel in New York, and it's crap," he said.
Sampath had his own epiphany when he logged on to find music from one of his favorite acts, early-1970s medieval rockers Jethro Tull. He found eight broadcasters with Tull selections. (On the network, Sampath is living in the past. Seventy percent of Mercora's listener/broadcasters say they were born in 1979 or later.)
Legal sharing of personal playlists through radiolike features could set up a new long-term battleground between the record industry and consumers. But backers say they could also be used to create promotional opportunities for artists and record labels.
Networks promoted by Mercora or competitors like Live365 will likely become significant tastemakers for the music industry by providing a forum for public opinion, some music executives predict.
"Traditionally, radio generated 95 percent of new music sales, and digital radio is taking that same space," said Zack Zalon, president of Virgin Digital. "It takes six to eight listens for a song to become a hit in a consumer's ears."
CNET News.com's John Borland contributed to this report.
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