Universal Licenses
Songs to Provider
Of Online Content
By ETHAN SMITH and SARAH MCBRIDE
Staff Reporters of THE WALL STREET JOURNAL
November 15, 2004; Page B4
Raising the prospect of paid peer-to-peer file-sharing services in the near future, Vivendi Universal SA's Universal Music Group has signed a deal to license its catalog of 150,000 songs to a company that plans to provide content to such services and to filter out illicit copies of songs.
The company, Snocap Inc., is a new venture founded by Shawn Fanning, who earlier gained notoriety as the inventer of Napster, the first peer-to-peer service on which users began exchanging free, illegal copies of songs five years ago.
An announcement is expected during the first week in December, and the first service using Snocap is likely to make its debut around the first of the year, although the plans aren't yet definite.
It is unclear exactly how a Snocap-powered peer-to-peer service would work, although people close to the deal say that one possibility is that the service would allow users to share a low-quality copy of a licensed song for free, and would grant them access to a higher-quality version only after they paid a fee.
Snocap could also provide shopping cart and search services. Essentially, the company would function similarly to the way MusicNet does for traditional online music stores. That company provides back-end services for a number of online music stores, including those of Time Warner Inc.'s AOL and Virgin Group Ltd.
Universal won't allow the licensed copies of its music to appear on any peer-to-peer service that doesn't use a technology like the one from Snocap to filter out illicit copies. That means that the technology is unlikely to make its debut on one of the major existing peer-to-peer networks, such as Kazaa, Morpheus or Limewire, which have been reluctant to filter their content.
Instead, content provided through Snocap is likely to appear on an entirely new service, such as one known as Mashboxx, or another like Israel-based iMesh.com Inc., which has promised to stop distributing illegitimate content.
The other three global music companies, Warner Music Group, EMI Group PLC, and Sony Corp. and Bertelsmann AG's Sony BMG Music Entertainment, all have expressed interest in finding ways to license legitimate copies of their offerings to peer-to-peer networks. So far, though, none has struck a deal like that reached by Universal.
