A former McAfee CEO appears to have found a way around the legal minefield hindering anyone attempting to enter the music sharing market: by a licence to webcast content.
Mercora is a P2P - "person to person", is how it defines the term - network that allows users to share songs without actually downloading them. It's an approach the company dubs "P2P radio".
The software allows users to share and catalogue digital photos, and provides instant messaging functionality too. But it's focus is sharing music. Essentially, it streams the music files on a user's hard drive out onto the Net. Other Mercora users can tune in and listen.
The company's reckons it's safe to do so because it has acquired a non-interactive digital audio webcasting licence as mandated by the notorious Digital Millennium Copyright Act (DMCA). "This license pertains to the digital performance rights of sound recordings and the associated reporting and royalty payments to SoundExchange (the independent non-profit organization that represents over 500 record companies and associated labels)," Mercora says.
"We have also obtained all US (and in some cases international) musical composition performance rights through our licenses with ASCAP, BMI and SESAC."
The upshot, it believes, is that "you (the end user) do not have to worry about... the reporting and royalty payments that are due to these various organizations".
Next, the software "ensures that any webcasts you make satisfy various rules governing the statutory licence for non-interactive webcasting". That includes "conforming to the sound recording performance complement, minimum duration for looped programming, identification of song, artist, and album," etc.
This clearly involves a level of randomisation, since one of the company's rules is that users aren't allowed to tell anyone what they're webcasting, or respond to requests for specific songs to be webcast. It's that level of uncertainty in the programming that makes it possible to get away with all this using said "non-interactive" licence.
Mercora's terms and conditions also insist that users may only include songs they've ripped from CDs they own or have acquired by downloading from a legal site.
It all sounds feasible enough, but despite the company's insistence that what it (and its users) are doing its legitimate, it seems oddly unwilling to reveal who's behind it beyond mention of the "executive and technical team that previously was instrumental in building companies such as Netscape and McAfee.com". There's a contact-by-email form, but nothing more concrete.
Looking up mercora.com's domain ownership, we discovered the site is registered to one Srivats Sampath, who founded McAfee and was at one time the anti-virus company's president and CEO. He handled the company's 1999 IPO and its 2002 merger with Network Associates. Before McAfee, he was head of marketing at Netscape.
Sampath's service promises "no ad-ware, spy-ware, or other slimy gimmicks from us". Yet it's unclear where the money's coming from. We calculate Mercora will have paid at least $500 for a year's webcasting license, if it counts as a non-commercial webcaster. The fee rises if it becomes a "small" commercial webcaster or even a commercial organisation.
Where does the money come from? Not the users - the software is free and so, it seems, is using it. With no ads, the cash can't be coming from there.
However that question is answered, Mercora is at least a novel take on the P2P music world brought into being by the original Napster. We have always argued the benefit Napster - in its first incarnation - provided as a way of getting more music to the ears of more people: essentially a college radio for the 21st Century. Had the Recording Industry Ass. of America (RIAA) exhibited a more sensible, less knee-jerk reaction to the P2P phenomenon, it's possible Napster might have converted into something not unlike Mercora, funded like so much commercial radio, by advertising yet provided free to the listener.
But perhaps not. In any case, Mercora sounds like it is delivering that concept. Time will tell whether the litigious RIAA will allow it to continue, or what revenue streams will maintain it. ®
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