Wells is co-founder of CantaMetrix Inc., a tiny Bellevue, Wash., company that has attracted backing from investors including guitarist Eric Clapton. The company is developing a system for analyzing digital music files, creating a kind of fingerprint that could be used to distinguish between authorized and illegal copies distributed over the Web.
CantaMetrix is a new face in a big crowd -- the mob of startups developing technologies to control and monitor the distribution of music and other digital content. Many of these companies have languished while free services such as Napster have exploded and record labels have offered only small selections of recordings through paid download services.
But the alliance between Napster and media giant Bertelsmann that was announced Tuesday has set off speculation in technology circles about how the new service would "lock up" its music files so it could sell them through subscriptions. The deal has given new hope to the lock makers, copy-protection specialists that range from giants such as Microsoft Corp. and IBM Corp. to startups such as Liquid Audio Inc. and InterTrust Technologies Corp.
"We think it's great," said Gerry Kearby, a former audio engineer for the Grateful Dead who founded Liquid Audio (lqid) and has impatiently watched major record labels as they slowly embrace the Internet. "I would hope that by virtue of one of their own coming out and putting a stamp of legitimacy on Napster, that the rest of them would pull their heads out of the sand and get going."
People close to Napster and other industry executives expect the companies to develop ways to let non-subscribers pass around samples of music, or copies that can only be played a limited number of times, while reserving unrestricted files to people who pay. Napster also may begin using technology to screen songs swapped through its service to block those that aren't authorized by copyright holders, said Eric Scheirer, an analyst at Forrester Research Inc. in Cambridge, Mass.
Several underlying technologies are needed to add such restrictions. Encryption software can be used to wrap a music file in the equivalent of a secure box that can be opened or played only under certain conditions, such as by a user who pays a fee or listens to an advertisement first.
A technology called watermarking can add a special identifying code to song files that can't be erased or heard, but can be used to make it harder for marked files to be passed to multiple devices.
Another identifier, called the International Standard Recording Code, is being proposed as an addition to recordings to serve as a kind of digital license plate as music files are passed around the Internet.
Numerous companies are employing combinations of such tools for copyright protection. Some are working with major music labels to protect Web download services set up this year, but would love to shift to Napster or other services that use Napster's system of decentralized distribution among users' computers, known as peer-to-peer.
Peer-to-peer systems can expand rapidly, since the music files don't reside on one Web server. "We are extremely anxious and willing to work in the peer-to-peer market," said Dave Fester, a general manager of Microsoft's (msft) digital media group, whose file format has been widely adopted by music labels.
Liquid Audio in July announced a research and development deal with Napster. Kearby, the company's founder, wouldn't comment on the idea of working on the service involving Bertelsmann, but didn't rule out the possibility.
Shares of InterTrust Technologies, based in Sunnyvale, Calif., have plummeted from $99.75 in February to a low of $4.75 in early October. The stock has rebounded somewhat, jumping 25 percent the day of the Bertelsmann announcement and closing Wednesday at $10 on Nasdaq. People close to the situation say it has been negotiating with Napster, though Talal Shamoon, a senior vice president at InterTrust, declined to comment on that topic.
Some other companies are devising new ways to track the use of recordings. Closely held CantaMetrics and Tuneprint, of Cambridge, Mass., for example, are designing automated systems that listen to music and develop mathematical formulas to identify songs. These digital fingerprints could be combined with databases that store information about usage rights for them.
CantaMetrics, which originally developed its song-analysis technology to develop recommendations for consumers, has raised $5 million from an investor group that includes Norwegian venture capitalists and Clapton. Wells, its chief technology officer, said its technology could be used to analyze songs stored on Web sites and identify those that have been illegally copied or mislabeled, a problem on services such as Napster.
Unlike watermarks, the technology could be used with millions of existing recordings, not just those that have an identifier added to them.
The company has just begun to interest music companies in the idea, but some are clearly paying attention. "What's interesting about CantaMetrics is that they don't require you to go back and re-record legacy content," said Jim Griffin, chief executive of Cherry Lane Digital LLC, a unit of New York-based Cherry Lane Music Group. "That's critical."