Napster's backers try AppleSoup

The backers of Napster are trying to do right by the film and TV industries since they have been accused of not doing so by the music industry.

          The backers of Napster are trying to do right by the film and TV industries since they have been accused of not doing so by the music industry. Their new company, AppleSoup, will launch in six to eight weeks with a copyright-friendly approach to peer-to-peer networks that has raised $2.5 million in seed funding from the likes of Waterview Advisors, of which former Universal, HBO and Viacom Inc. (VIA.B) chief Frank Biondi is a partner.

          Waterview's backing was secured in the hopes that Biondi's Hollywood connections would lead to industry partnerships with AppleSoup. Bill Bales, president and CEO of AppleSoup, says the idea of working together came out of conversations with angry record label executives.

          "Napster has been a very stressful place to work," says the company's former VP of business development. "At a meeting with one of the labels, [the executive] said, 'You should have met with us first before putting our stuff on the Net.' We said, 'We didn't put it on the Net, our users did.' " But the exchange led Bales to consider launching a peer-to-peer network that wouldn't incur the wrath of executives in other industries.

          AppleSoup's founders won't say how the network will work from a technological standpoint, but they say that it will have no set business model. The network will allow copyright holders to choose the model that best suits them, whether it is advertising-supported free distribution or pay-per-view.

          The motion picture industry is currently fending off piracy of its content online, fighting in a Manhattan court this week to win a case against the hacker Web site, which had been distributing software called DeCSS that descrambles DVDs.

          In addition to the legal route, the studios each have been making attempts to control the future of video distribution over the Internet, with varying degrees of commitment. Their efforts are reported to be disparate and proprietary, which is certain to lead to consumer confusion. A centralized approach such as AppleSoup could be just the solution, so long as the studios are satisfied that their business models are secure and protected.

          Gene Kan, a developer for Gnutella, a peer-to-peer network, says that while AppleSoup touts its copyright friendliness, "friendly does not mean safe."

          And just in time for a potential Napster shutdown – pending U.S. District Judge Marilyn Hall Patel's decision next week – AppleSoup could possibly sustain Napster-abandoned users looking for a new outlet. But AppleSoup's chairman and VP of engineering, Adrian Scott, insists that the new network will not impinge on Napster's terrain, as it won't support the transfer of MP3 files.

          "We will support anything digital," Scott says, "but music is not the focus."

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