New twist in Net copyright struggle

Napster vet's startup may hold key to breaking the logjam between content providers and users who demand that bits remain free

As one of the founding fathers behind Napster, Bill Bales knows as much as anyone about how quickly digitised music can spread across the Net. But for an encore act Bales, who left Napster in January, is now involved in shepherding a technology to market that he says will help reintroduce a degree of control over so-called viral networks.

The new venture, AppleSoup, will be announced Monday. Although the company does not plan to offer specifics about the AppleSoup technology until early September, Bales indicated that it would equip content owners with a way to regain a say in how their copyrighted materials get used on the Internet.

"The owners want to protect their content and obviously want to monetise it," he said.

Bales added that AppleSoup will create a layer of software that will allow content creators to establish rules about how their materials will get viewed. He refused to disclose details about how the technology would work.

Watching the explosion in the number of people using Napster and its variants to download music off the Internet, the content creation community is worried copyright protection might be rendered altogether useless by peer-to-peer networks which allow users to share files.

That's where Bales believes his new company has a ready made market of customers.

If it performs as promised, the new technology could be what copyright holders desire above all in this new world order: increased control over distribution.

"In order for content owners to be comfortable to have distribution of any of their assets, they have to have control -- and we're doing that," he said. "And that's completely unique."

At this point, AppleSoup remains more in the realm of promise and press releases than market-tested technology. But Bales hasn't made a career by selling snake oil. In addition to AppleSoup and Napster, Bales also helped found On24, the Internet-based video news site.

What's more, the idea has attracted interest from Hollywood. Former HBO chairman Frank Biondi is a five percent shareholder in the venture. Also on board is John Valenti, whose father Jack runs the Motion Picture Association of America. The younger Valenti founded Creative Planet, a B2B firm that works with the major studios.

Other investors include former 3COM chief executive Bill Krause, and Fred Gibbons, the founder and former chief executive of Software Publishing, as well as Brian Pinkerton, who wrote the WebCrawler Internet search engine.

AppleSoup will not be targeting the music industry, an area that has been the main battleground in the debate over the propriety of content swapping over peer-to-peer networks.

"There is all sorts of intellectual property out there," said Bales. "There's a lot of content out there that lots of people would want control of -- like the highlights from the 1965 World Series. We're talking the universe here."

The idea first occurred to Bales while at Napster when he was meeting with the head of a "major record label about how the two sides in this escalating conflict might coexist."

"Napster proved content is still king and the scary part for content owners is that in viral networks, it just takes one person to make files available," he said. "And that got me thinking."

But Napster scaled so rapidly, Bales explained, that there was no time to seriously address that question. Now he gets a second chance to take a crack at finding an answer.

"You learn from your mistakes and just learn from life," he said.

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