HITS Daily Double
"This [Snowcap] announcement shouldn’t affect the [Court’s] decision, but it might."
——anonymous source


Label Group is First to Announce Agreement with Shawn Fanning’s New Filtering System
Here we go again.

Universal Music Group has become the first of the major music congloms to ink a deal with Napster founder Shawn Fanning’s Snocap, Inc., which perhaps will clear the way to a legitimate peer-to-peer file-sharing system. Sony BMG’s Andrew Lack had reportedly been pursuing a deal with the company, which filters out illicit copies. Insiders say the other three majors won’t be far behind in licensing their catalogs, if Snocap proves an effective way of creating legitimate P2P sites.

Sources indicate ex-Grokster rabblerouser Wayne Rosso’s Mashboxx could serve as the first P2P site to employ the technology.

Insiders insist current popular sites such as KaZaA, Morpheus or Limewire, who have refused in the past to include filtering technology, will not be part of the experiment.

"It’s difficult for those sites with the most traffic to voluntarily level the playing field," said one industry source. "There’s a real transition problem that none of them have really figured out yet."

Several scenarios as to how Mashboxx would work include allowing users to download a low-quality copy of a licensed song for free, and then giving them access to a higher-quality version for a fee.

Meanwhile, the Supreme Court has yet to indicate whether or not it will hear the four-major label appeals to the Ninth Circuit Court’s recent decision exonerating Grokster and Streamcast from wrongdoing. Industry execs are hoping the case will be heard before the Court recesses in December.

"This [Snowcap] announcement shouldn’t affect the [Court’s] decision, but it might," said a source. "If there appears to be movement in the marketplace, it could encourage them not to hear the case. It’s all about good players and bad players."

As to whether P2P can be harnessed and monetized, an industry insider was succinct: "Ultimately, the consumer will make that decision."